Ratio Analysis (from a 10K Report Provided) For (HBAN year ended 12/31/13)

10-K 1 d670111d10k.htm ANNUAL REPORT

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549

FORM 10-K

(Mark One)  Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the fiscal year ended December 31, 2013

or

 Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of

1934

Commission File Number 1-34073

Huntington Bancshares Incorporated (Exact name of registrant as specified in its charter)

Maryland 31-0724920 (State or other jurisdiction of

incorporation or organization) (I.R.S. Employer

Identification No.)

41 S. High Street, Columbus, Ohio 43287

(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code (614) 480-8300

Securities registered pursuant to Section 12(b) of the Act:

Title of class Name of exchange on which registered 8.50% Series A non-voting, perpetual convertible preferred stock NASDAQ

Common Stock—Par Value $0.01 per Share NASDAQ

Securities registered pursuant to Section 12(g) of the Act:

Title of class

Floating Rate Series B Non-Cumulative Perpetual Preferred Stock

Depositary Shares (each representing a 1/40th interest in a share of Floating Rate Series B Non-Cumulative

Perpetual Preferred Stock)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the

Securities Exchange Act.  Yes  No

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the

Act.  Yes  No

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 (or for such shorter period that the

registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90

days.  Yes  No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web

site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T

(§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required

to submit and post such files).  Yes  No

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not

contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information

statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-

accelerated filer, or a smaller reporting company. See definition of “large accelerated filer”, “accelerated filer”, and

“smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer  Accelerated filer  Non-accelerated filer  (Do not check if a smaller reporting company) Smaller reporting company 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the

Act)  Yes  No

The aggregate market value of voting and non-voting common equity held by non-affiliates of the registrant as of

June 30, 2013, determined by using a per share closing price of $7.87, as quoted by NASDAQ on that date, was

$6,352,754,308. As of January 31, 2014, there were 831,214,839 shares of common stock with a par value of $0.01

outstanding.

Documents Incorporated By Reference

Part III of this Form 10-K incorporates by reference certain information from the registrant’s definitive Proxy

Statement for the 2014 Annual Shareholders’ Meeting.

Table of Contents

HUNTINGTON BANCSHARES INCORPORATED INDEX

Part I.

Item 1. Business 5 Item 1A. Risk Factors 14 Item 1B. Unresolved Staff Comments 19 Item 2. Properties 19 Item 3. Legal Proceedings 19 Item 4. Mine Safety Disclosures 19

Part II.

Item 5. Market for Registrant’s Common Equity, Related Shareholder Matters and Issuer Purchases of

Equity Securities 20 Item 6. Selected Financial Data 22 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 24

Introduction 24

Executive Overview 24

Discussion of Results of Operations 28

Risk Management and Capital: 37

Credit Risk 38

Market Risk 52

Liquidity Risk 53

Operational Risk 60

Compliance Risk 61

Capital 61

Business Segment Discussion 63

Additional Disclosures 82 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 88 Item 8. Financial Statements and Supplementary Data 88 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 179 Item 9A. Controls and Procedures 179 Item 9B. Other Information 179

Part

III.

Item 10. Directors, Executive Officers and Corporate Governance 179 Item 11. Executive Compensation 179 Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder

Matters 180 Item 13. Certain Relationships and Related Transactions, and Director Independence 180 Item 14. Principal Accountant Fees and Services 180

Part IV.

Item 15. Exhibits and Financial Statement Schedules 181

Signatures 182

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Glossary of Acronyms and Terms

The following listing provides a comprehensive reference of common acronyms and terms used throughout

the document:

ABL Asset Based Lending ACL Allowance for Credit Losses AFCRE Automobile Finance and Commercial Real Estate AFS Available-for-Sale ALCO Asset-Liability Management Committee ALLL Allowance for Loan and Lease Losses ARM Adjustable Rate Mortgage ASC Accounting Standards Codification ASU Accounting Standards Update ATM Automated Teller Machine AULC Allowance for Unfunded Loan Commitments AVM Automated Valuation Methodology Basel III

Refers to the final rule issued by the FRB and OCC and published in the Federal Register on

October 11, 2013 BHC Bank Holding Companies C&I Commercial and Industrial CapPR Federal Reserve Board’s Capital Plan Review CCAR Comprehensive Capital Analysis and Review CDO Collateralized Debt Obligations CDs Certificate of Deposit CFPB Bureau of Consumer Financial Protection CMO Collateralized Mortgage Obligations CRE Commercial Real Estate Dodd-Frank

Act Dodd-Frank Wall Street Reform and Consumer Protection Act

EPS Earnings Per Share ERISA Employee Retirement Income Security Act EVE Economic Value of Equity Fannie Mae (see FNMA) FASB Financial Accounting Standards Board

FDIC Federal Deposit Insurance Corporation FDICIA Federal Deposit Insurance Corporation Improvement Act of 1991 FHA Federal Housing Administration FHFA Federal Housing Finance Agency FHLB Federal Home Loan Bank FHLMC Federal Home Loan Mortgage Corporation FICA Federal Insurance Contributions Act FICO Fair Isaac Corporation FNMA Federal National Mortgage Association FRB Federal Reserve Bank Freddie Mac (see FHLMC) FTE Fully-Taxable Equivalent FTP Funds Transfer Pricing GAAP Generally Accepted Accounting Principles in the United States of America HAMP Home Affordable Modification Program

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HARP Home Affordable Refinance Program HTM Held-to-Maturity IRC Internal Revenue Code of 1986, as amended IRS Internal Revenue Service ISE Interest Sensitive Earnings LCR Liquidity Coverage Ratio LIBOR London Interbank Offered Rate LGD Loss-Given-Default LTV Loan to Value MD&A Management’s Discussion and Analysis of Financial Condition and Results of Operations MSA Metropolitan Statistical Area MSR Mortgage Servicing Rights NALs Nonaccrual Loans NAV Net Asset Value NCO Net Charge-off NIM Net interest margin NCUA National Credit Union Administration

NPAs Nonperforming Assets NPR Notice of Proposed Rulemaking N.R.

Not relevant. Denominator of calculation is a gain in the current period compared with a loss in

the prior period, or vice-versa NSF / OD Nonsufficient Funds and Overdraft OCC Office of the Comptroller of the Currency OCI Other Comprehensive Income (Loss) OCR Optimal Customer Relationship OLEM Other Loans Especially Mentioned OREO Other Real Estate Owned OTTI Other-Than-Temporary Impairment PD Probability-Of-Default Plan Huntington Bancshares Retirement Plan Problem Loans

Includes nonaccrual loans and leases (Table 13), troubled debt restructured loans (Table 15), and

accruing loans and leases past due 90 days or more (Table 14) REIT Real Estate Investment Trust Reg E Regulation E, of the Electronic Fund Transfer Act ROC Risk Oversight Committee SAD Special Assets Division SBA Small Business Administration SEC Securities and Exchange Commission SERP Supplemental Executive Retirement Plan Sky Financial Sky Financial Group, Inc. SRIP Supplemental Retirement Income Plan TARP Troubled Asset Relief Program TARP Capital Series B Preferred Stock, repurchased in 2010 TCE Tangible Common Equity TDR Troubled Debt Restructured loan TLGP Temporary Liquidity Guarantee Program U.S. Treasury U.S. Department of the Treasury UCS Uniform Classification System UPB Unpaid Principal Balance USDA U.S. Department of Agriculture VA U.S. Department of Veteran Affairs VIE Variable Interest Entity WGH Wealth Advisors, Government Finance, and Home Lending

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Huntington Bancshares Incorporated

PART I

When we refer to “we,” “our,” and “us” in this report, we mean Huntington Bancshares Incorporated and our

consolidated subsidiaries, unless the context indicates that we refer only to the parent company, Huntington

Bancshares Incorporated. When we refer to the “Bank” in this report, we mean our only bank subsidiary, The

Huntington National Bank, and its subsidiaries.

Item 1: Business

We are a multi-state diversified regional bank holding company organized under Maryland law in 1966 and

headquartered in Columbus, Ohio. We have 11,964 average full-time equivalent employees. Through the Bank, we

have 148 years of serving the financial needs of our customers. We provide full-service commercial, small business,

consumer banking services, mortgage banking services, automobile financing, equipment leasing, investment

management, trust services, brokerage services, insurance programs, and other financial products and services. The

Bank, organized in 1866, is our only bank subsidiary. At December 31, 2013, the Bank had 16 wealth management

offices and 695 branches as follows:

• 403 branches in Ohio • 45 branches in Indiana

• 155 branches in Michigan • 30 branches in West Virginia

• 51 branches in

Pennsylvania • 11 branches in Kentucky

Select financial services and other activities are also conducted in various other states. International banking

services are available through the headquarters office in Columbus, Ohio, a limited purpose office located in the

Cayman Islands, and another located in Hong Kong. Our foreign banking activities, in total or with any individual

country, are not significant.

Our business segments are based on our internally-aligned segment leadership structure, which is how we

monitor results and assess performance. For each of our four business segments, we expect the combination of our

business model and exceptional service to provide a competitive advantage that supports revenue and earnings

growth. Our business model emphasizes the delivery of a complete set of banking products and services offered by

larger banks, but distinguished by local delivery and customer service.

A key strategic emphasis has been for our business segments to operate in cooperation to provide products and

services to our customers and to build stronger and more profitable relationships using our OCR sales and service

process. The objectives of OCR are to:

1. Provide a consultative sales approach to provide solutions that are specific to each customer.

2. Leverage each business segment in terms of its products and expertise to benefit customers.

3. Target prospects who may want to have multiple products and services as part of their relationship with us.

Following is a description of our four business segments and Treasury / Other function:

• Retail and Business Banking – This segment provides a wide array of financial products and services to consumer and small business customers including but not limited to checking accounts,

savings accounts, money market accounts, certificates of deposit, consumer loans, and small business

loans and leases. Other financial services available to consumer and small business customers include

investments, insurance services, interest rate risk protection products, foreign exchange hedging, and

treasury management services. We serve customers primarily through our network of traditional

branches in Ohio, Michigan, Pennsylvania, Indiana, West Virginia, and Kentucky. We also have

branches located in grocery stores in Ohio and Michigan. In addition to our extensive branch

network, customers can access Huntington through online banking, mobile banking, telephone

banking, and ATMs.

We established a “Fair Play” banking philosophy and built a reputation for meeting the

banking needs of consumers in a manner which makes them feel supported and appreciated. We

believe customers are recognizing this and other efforts as key differentiators and it is earning us

more customers and deeper relationships.

Business Banking is a dynamic and growing part of our business and we are committed to

being the bank of choice for small businesses in our markets. Business Banking is defined as

companies with revenues up to $25 million and consists of approximately 163,000 businesses.

We continue to develop products and services that are designed specifically to meet the needs of

small business. We continue to look for ways to help companies find solutions to their capital

needs.

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• Regional and Commercial Banking – This segment provides a wide array of products and services to the middle market and large corporate customers located primarily within our eleven regional

commercial banking markets. Products and services are delivered through a relationship banking

model and include commercial lending, as well as depository and liquidity management products.

Dedicated teams collaborate with our relationship bankers to deliver complex and customized

treasury management solutions, equipment leasing, international services, capital markets services

such as interest rate risk protection products, foreign exchange hedging and sales, trading of

securities, and employee benefit programs (insurance, 401(k)). The Commercial Banking team

specializes in serving a number of industry segments such as not-for-profit organizations, health-care

entities, and large publicly-traded companies.

• Automobile Finance and Commercial Real Estate – This segment provides lending and other banking products and services to customers outside of our normal retail and commercial banking

segments. Our products and services include financing for the purchase of automobiles by customers

at automotive dealerships, financing the acquisition of new and used vehicle inventory of automotive

dealerships, and financing for land, buildings, and other commercial real estate owned or constructed

by real estate developers, automobile dealerships, or other customers with real estate project

financing needs. Products and services are delivered through highly specialized relationship-focused

bankers and product partners. Huntington creates well-defined relationship plans which identify

needs where solutions are developed and customer commitments are obtained.

The Automotive Finance team services automobile dealerships, its owners, and consumers

buying automobiles through these dealerships. Huntington has provided new and used

automobile financing and dealer services throughout the Midwest since the early 1950s. This

consistency in the market and our focus on working with strong dealerships, has allowed us to

expand into selected markets outside of the Midwest and to actively deepen relationships while

building a strong reputation.

The Commercial Real Estate team serves real estate developers, REITs, and other

customers with lending needs that are secured by commercial properties. Most of our customers

are located within our footprint.

• Wealth Advisors, Government Finance, and Home Lending – This segment consists of our wealth management, government banking, and home lending businesses. In wealth management,

Huntington provides financial services to high net worth clients in our primary banking markets and

Florida. Huntington provides these services through a unified sales team, which consists of private

bankers, trust officers, and investment advisors. Aligned with the eleven regional commercial

banking markets, this coordinated service model delivers products and services directly and through

the other segment product partners. A fundamental point of differentiation is our commitment to be

in the market, working closely with clients and their other advisors to identify needs, offer solutions

and provide ongoing advice in an optimal client experience.

The Government Finance Group provides financial products and services to government

and other public sector entities in our primary banking markets. A locally based team of

relationship managers works with clients to meet their trust, lending, and treasury management

needs. Closely aligned, our Community Development group serves an important role as it

focuses on delivering on our commitment to the communities Huntington serves.

Home Lending originates and services consumer loans and mortgages for customers who

are generally located in our primary banking markets. Consumer and mortgage lending products

are primarily distributed through the Retail and Business Banking segment, as well as through

commissioned loan originators.

The segment also includes the related businesses of investment management, investment

servicing, custody, corporate trust, and retirement plan services. Huntington Asset Advisors

provides investment management services through a variety of internal and external channels,

including advising the Huntington Funds, our proprietary family of mutual funds and

Huntington Strategy Shares, our actively-managed exchange-traded funds. Huntington Asset

Services offers administrative and operational support to fund complexes, including fund

accounting, transfer agency, administration, and distribution services. Our retirement plan

services business offers fully bundled and third party distribution of a variety of qualified and

non-qualified plan solutions.

Treasury / Other function includes our insurance brokerage business, which specializes in commercial

property and casualty, employee benefits, personal lines, life and disability and specialty lines of insurance. We also

provide brokerage and agency services for residential and commercial title insurance and excess and surplus product

lines of insurance. As an agent and broker we do not assume underwriting risks; instead we provide our customers

with quality, noninvestment insurance contracts. The Treasury / Other function also includes technology and

operations, other unallocated assets, liabilities, revenue, and expense.

The financial results for each of these business segments are included in Note 25 of Notes to Consolidated

Financial Statements and are discussed in the Business Segment Discussion of our MD&A. We recently announced

a reorganization among our executive leadership team, which will become effective during the 2014 first quarter. As

a result, management is currently evaluating the business segment structure which will impact how we monitor

future results and assess performance.

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Competition

We compete with other banks and financial services companies such as savings and loans, credit unions, and

finance and trust companies, as well as mortgage banking companies, automobile and equipment financing

companies (including captive automobile finance companies), insurance companies, mutual funds, investment

advisors, and brokerage firms, both within and outside of our primary market areas. Internet companies are also

providing nontraditional, but increasingly strong, competition for our borrowers, depositors, and other customers.

We compete for loans primarily on the basis of a combination of value and service by building customer

relationships as a result of addressing our customers’ entire suite of banking needs, demonstrating expertise, and

providing convenience to our customers. We also consider the competitive pricing pressures in each of our markets.

We compete for deposits similarly on a basis of a combination of value and service and by providing

convenience through a banking network of branches and ATMs within our markets and our website at

www.huntington.com. We have also instituted customer friendly practices, such as our 24-Hour Grace® account

feature, which gives customers an additional business day to cover overdrafts to their consumer account without

being charged overdraft fees.

The table below shows our competitive ranking and market share based on deposits of FDIC-insured

institutions as of June 30, 2013, in the top 10 metropolitan statistical areas (MSA) in which we compete:

MSA Rank Deposits (in

millions) Market Share Columbus, OH 1 $ 14,436 28 % Detroit, MI 7 4,478 5 Cleveland, OH 4 4,261 8 Indianapolis, IN 4 2,859 8 Pittsburgh, PA 8 2,512 3 Cincinnati, OH 4 2,109 3 Youngstown, OH 1 2,082 23 Toledo, OH 2 2,045 22 Grand Rapids, MI 3 1,855 11 Canton, OH 2 1,494 25

Source: FDIC.gov, based on June 30, 2013 survey.

Many of our nonfinancial institution competitors have fewer regulatory constraints, broader geographic

service areas, greater capital, and, in some cases, lower cost structures. In addition, competition for quality

customers has intensified as a result of changes in regulation, advances in technology and product delivery systems,

consolidation among financial service providers, bank failures, and the conversion of certain former investment

banks to bank holding companies.

Regulatory Matters

We are subject to regulation by the SEC, the Federal Reserve, the OCC, the CFPB, and other federal and state

regulators.

Because we are a public company, we are subject to regulation by the SEC. The SEC has established five

categories of issuers for the purpose of filing periodic and annual reports. Under these regulations, we are considered

to be a large accelerated filer and, as such, must comply with SEC accelerated reporting requirements.

We are a bank holding company and are qualified as a financial holding company with the Federal Reserve.

We are subject to examination and supervision by the Federal Reserve pursuant to the Bank Holding Company Act.

We are required to file reports and other information regarding our business operations and the business operations

of our subsidiaries with the Federal Reserve.

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The Federal Reserve maintains a bank holding company rating system that emphasizes risk management,

introduces a framework for analyzing and rating financial factors, and provides a framework for assessing and rating

the potential impact of non-depository entities of a holding company on its subsidiary depository institution(s). The

ratings assigned to us, like those assigned to other financial institutions, are confidential and may not be disclosed,

except to the extent required by law.

The Federal Reserve utilizes an updated framework for the consolidated supervision of large financial

institutions, including bank holding companies with consolidated assets of $50 billion or more. The objectives of the

framework are to enhance the resilience of a firm, lower the probability of its failure, and reduce the impact on the

financial system in the event of an institution’s failure. With regard to resiliency, each firm is expected to ensure that

the consolidated organization and its core business lines can survive under a broad range of internal or external

stresses. This requires financial resilience by maintaining sufficient capital and liquidity, and operational resilience

by maintaining effective corporate governance, risk management, and recovery planning. With respect to lowering

the probability of failure, each firm is expected to ensure the sustainability of its critical operations and banking

offices under a broad range of internal or external stresses. This requires, among other things, effective resolution

planning that addresses the complexity and the interconnectivity of the firm’s operations.

The Bank, which is chartered by the OCC, is a national bank and our only bank subsidiary. It is subject to

examination and supervision by the OCC and also by the CFPB, which was established by the Dodd-Frank Act in

2010. Our nonbank subsidiaries are also subject to examination and supervision by the Federal Reserve or, in the

case of nonbank subsidiaries of the Bank, by the OCC. All subsidiaries are subject to examination and supervision

by the CFPB to the extent they offer any consumer financial products or services. Our subsidiaries are subject to

examination by other federal and state agencies, including, in the case of certain securities and investment

management activities, regulation by the SEC and the Financial Industry Regulatory Authority.

The Bank is subject to affiliate transaction restrictions under federal law, which limit certain transactions

generally involving the transfer of funds by a bank or its subsidiaries to its parent corporation or any nonbank

subsidiary of its parent corporation, whether in the form of loans, extensions of credit, investments, or asset

purchases, or otherwise undertaking certain obligations on behalf of such affiliates. See also the Volcker Rule

discussion below for additional affiliate transaction restrictions.

Legislative and regulatory reforms continue to have significant impacts throughout the financial services

industry.

The Dodd-Frank Act, enacted in 2010, is complex and broad in scope and several of its provisions are still

being implemented. The Dodd-Frank Act established the CFPB, which has extensive regulatory and enforcement

powers over consumer financial products and services, and the Financial Stability Oversight Council, which has

oversight authority for monitoring and regulating systemic risk. In addition, the Dodd-Frank Act altered the

authority and duties of the federal banking and securities regulatory agencies, implemented certain corporate

governance requirements for all public companies including financial institutions with regard to executive

compensation, proxy access by shareholders, and certain whistleblower provisions, and restricted certain proprietary

trading and hedge fund and private equity activities of banks and their affiliates. The Dodd-Frank Act also required

the issuance of numerous implementing regulations, many of which have not yet been issued. The regulations will

continue to take effect over several more years, continuing to make it difficult to anticipate the overall impact to us,

our customers, or the financial industry in general.

In mid-January 2013, the CFPB issued eight final regulations governing mainly consumer mortgage lending.

The first of these rules was issued on January 10, 2013, and included the ability to repay and qualified mortgage

rule. This rule imposes additional requirements on lenders, including rules designed to require lenders to ensure

borrowers’ ability to repay their mortgage and took effect January 10, 2014. The same day, the CFPB also finalized

a rule on escrow accounts for higher priced mortgage loans and a rule expanding the scope of the high-cost

mortgage provision in the Truth in Lending Act. On January 17, 2013, the CFPB issued its final rules implementing

provisions of the Dodd-Frank Act that relate to mortgage servicing, which took effect on January 10, 2014. On

January 18, 2013, the CFPB issued a final appraisal rule under the Equal Credit Opportunity Act and six agencies

including the CFPB, FRB, OCC, FDIC, NCUA, and FHFA issued an interagency rule on appraisals for higher-

priced mortgage loans. On November 20, 2013, the CFPB issued its final rule on integrated mortgage disclosures

under the Truth in Lending Act and the Real Estate Settlement Procedures Act, for which compliance is required by

August 1, 2015. We are evaluating these integrated mortgage disclosure rules to determine their impact on the Bank

and its affiliates.

During the 2013 first quarter, the CFPB provided guidance on fair lending practices to indirect automobile

lenders with recommendations to ensure compliance with fair lending laws.

Recently, banking regulatory agencies have increasingly used a general consumer protection statute to address

unethical or otherwise bad business practices that may not necessarily fall directly under the purview of a specific

banking or consumer finance law. Prior to the Dodd-Frank Act, there was little formal guidance to provide insight to

the parameters for compliance with the “unfair or deceptive acts or practices” (UDAP) law. However, the UDAP

provisions have been expanded under the Dodd-Frank Act to apply to “unfair, deceptive or abusive acts or

practices”, which has been delegated to the CFPB for supervision.

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Large bank holding companies and national banks are required to submit annual capital plans to the Federal

Reserve and OCC, respectively and conduct stress tests.

The Federal Reserve published final amendments to Regulation Y to require large bank holding companies to

submit capital plans to the Federal Reserve on an annual basis and to require such bank holding companies to obtain

approval from the Federal Reserve under certain circumstances before making a capital distribution. This rule

applies to us and all other bank holding companies with $50 billion or more of total consolidated assets.

A large bank holding company’s capital plan must include an assessment of the expected uses and sources of

capital over at least the next nine quarters, a description of all planned capital actions over the planning horizon, a

detailed description of the entity’s process for assessing capital adequacy, the entity’s capital policy, and a

discussion of any expected changes to the banking holding company’s business plan that are likely to have a

material impact on the firm’s capital adequacy or liquidity. The planning horizon for the most recent capital

planning and stress testing cycle encompasses the 2013 fourth quarter through the 2015 fourth quarter as was

submitted in our capital plan in January 2014. Rules to implement the Basel III capital reforms in the United States

were finalized in July 2013, and will be phased-in beginning in 2015 for us under the standardized approach. As

such, the most recent CCAR cycle, which began October 1, 2013, overlaps with the implementation of the Basel III

capital reforms based on the required nine quarter projection horizon. The interim final rules clarify that banking

organizations with $50 billion or more in total consolidated assets, including us, must incorporate the revised capital

framework into the capital planning projections and into the stress tests required under the Dodd-Frank Act. The rule

also clarifies that for the upcoming cycle, capital adequacy at large banking organizations, including us, would

continue to be assessed against a minimum 5 percent tier 1 common ratio as calculated by the Federal Reserve.

Capital plans for 2014 were required to be submitted by January 6, 2014. The Federal Reserve will either

object to a capital plan, in whole or in part, or provide a notice of non-objection no later than March 31, 2014, for

plans submitted by the January 6, 2014 submission date. If the Federal Reserve objects to a capital plan, the bank

holding company may not make any capital distributions other than those with respect to which the Federal Reserve

has indicated its non-objection. While we can give no assurances as to the outcome or specific interactions with the

regulators, based on the Capital Plan we submitted on January 5, 2014, we believe we have a strong capital position

and that our capital adequacy process is robust.

In addition to the CCAR submission, section 165 of the Dodd-Frank Act requires that national banks, like The

Huntington National Bank, conduct annual stress tests for submission in January 2014. The results of the stress tests

will provide the OCC with forward-looking information that will be used in bank supervision and will assist the

agency in assessing a company’s risk profile and capital adequacy. We submitted our stress test results to the OCC

on January 6, 2014.

The regulatory capital rules indicate that common stockholders’ equity should be the dominant element within

Tier 1 capital and that banking organizations should avoid overreliance on non-common equity elements. Under the

Dodd-Frank Act, the ratio of Tier 1 common equity to risk-weighted assets became significant as a measurement of

the predominance of common equity in Tier 1 capital and an indication of the quality of capital.

Final rules have been issued to implement the Volcker Rule.

On December 10, 2013, the Federal Reserve, the OCC, the FDIC, the CFTC and the SEC issued final rules to

implement the Volcker Rule contained in section 619 of the Dodd-Frank Act, generally to become effective on

July 21, 2015. The Volcker Rule prohibits an insured depository institution and its affiliates (referred to as “banking

entities”) from: (i) engaging in “proprietary trading” and (ii) investing in or sponsoring certain types of funds

(“covered funds”) subject to certain limited exceptions. These prohibitions impact the ability of U.S. banking

entities to provide investment management products and services that are competitive with nonbanking firms

generally and with non-U.S. banking organizations in overseas markets. The rule also effectively prohibits short-

term trading strategies by any U.S. banking entity if those strategies involve instruments other than those

specifically permitted for trading.

The final Volcker Rule regulations do provide certain exemptions allowing banking entities to continue

underwriting, market-making and hedging activities and trading certain government obligations, as well as various

exemptions and exclusions from the definition of “covered funds”. The level of required compliance activity

depends on the size of the banking entity and the extent of its trading. CEOs of larger banking entities, including

Huntington, will have to attest annually in writing that their organization has in place processes to establish,

maintain, enforce, review, test and modify compliance with the Volcker Rule regulations. Banking entities with

significant permitted trading operations will have to report certain quantitative information, beginning between

June 30, 2014 and December 31, 2016, depending on the size of the banking entity’s trading assets and liabilities.

On January 14, 2014, the five federal agencies approved an interim final rule to permit banking entities to

retain interests in certain collateralized debt obligations backed primarily by trust preferred securities from the

investment prohibitions of the Volcker Rule. Under the interim final rule, the agencies permit the retention of an

interest in or sponsorship of covered funds by banking entities if certain qualifications are met. In addition, the

agencies released a non-exclusive list of issuers that meet the requirements of

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the interim final rule. At December 31, 2013, we had investments in ten different pools of trust preferred securities.

Eight of our pools are included in the list of non-exclusive issuers. We have analyzed the other two pools that were

not included on the list and believe that we will continue to be able to own these investments under the final Volcker

Rule regulations.

The rules effecting debit card interchange fees under the Durbin Amendment, which became effective on

October 1, 2011, have negatively impacted our electronic banking income.

The Durbin Amendment, which was section 1075 of the Dodd-Frank Act, required the Federal Reserve to

establish a cap on the rate merchants pay banks for electronic clearing of debit transactions (i.e. the interchange

rate). The Federal Reserve issued final rules, effective October 1, 2011, for establishing standards, including a cap,

for debit card interchange fees and prohibiting network exclusivity arrangements and routing restrictions. The final

rule established standards for assessing whether debit card interchange fees received by debit card issuers were

reasonable and proportional to the costs incurred by issuers for electronic debit transactions. Under the final rule, the

maximum permissible interchange fee that an issuer may receive for an electronic debit transaction is the sum of 21

cents per transaction, a 1 cent fraud prevention adjustment, and 5 basis points multiplied by the value of the

transaction. As a result of implementing this lower debit card interchange fee structure, our electronic banking

income was negatively impacted by over $55 million in 2012 when compared to 2011.

On July 31, 2013, the Federal District Court in the District of Columbia issued a ruling in a lawsuit filed by a

merchant group challenging the validity of the Federal Reserve’s final rule under the Durbin Amendment. The Court

ruling vacated the provisions of the Federal Reserve’s final rule relating to standards for debit card interchange fees

and the provision dealing with network non-exclusivity, but stayed its action until further briefing on issues

identified by the Court. Eventually, the District Court’s Ruling was appealed to the Federal Circuit Court of Appeals

for the District of Columbia, where the case is currently pending. If the Court of Appeals rules in favor of the

merchants, the Federal Reserve will likely be required to provide even more stringent caps on debit interchange fees,

which could adversely impact all banks that issue debit cards, including us, and which could result in an industry-

wide retraction of debit card products and replacement with other card products not subject to the Durbin

Amendment. The Federal Reserve and a banking trade organization are submitting briefs arguing that the Court of

Appeals should overrule the District Court and uphold the Federal Reserve’s final rule under the Durbin

Amendment. Oral argument before the Court of Appeals was held on January 17, 2014, and an expedited ruling is

anticipated.

There are restrictions on our ability to pay dividends.

Dividends from the Bank to the parent company are the primary source of funds for payment of dividends to

our shareholders. However, there are statutory limits on the amount of dividends that the Bank can pay to the

holding company. Regulatory approval is required prior to the declaration of any dividends in an amount greater

than its undivided profits or if the total of all dividends declared in a calendar year would exceed the total of its net

income for the year combined with its retained net income for the two preceding years, less any required transfers to

surplus or common stock. As a result of the deficit position of its undivided profits, prior to December 31, 2013, the

Bank could not have declared and paid any cash dividends to the parent company without regulatory approval.

Since the first quarter of 2008, the Bank has made a capital reduction each quarter to enable payment of

periodic dividends to shareholders outside the Bank’s consolidated group on preferred and common stock of its

REIT and capital financing subsidiaries. We anticipate that those subsidiaries, and the Bank will be able to resume

normal dividend payments during the first half of 2014.

If, in the opinion of the applicable regulatory authority, a bank under its jurisdiction is engaged in, or is about

to engage in, an unsafe or unsound practice, such authority may require, after notice and hearing, that such bank

cease and desist from such practice. Depending on the financial condition of the Bank, the applicable regulatory

authority might deem us to be engaged in an unsafe or unsound practice if the Bank were to pay dividends. The

Federal Reserve and the OCC have issued policy statements that provide that insured banks and bank holding

companies should generally only pay dividends out of current operating earnings. Additionally, the Federal Reserve

may prohibit bank holding companies from making any capital distributions, including payment of preferred and

common dividends, if the Federal Reserve objects to the annual capital plan.

We are subject to the current capital requirements mandated by the Federal Reserve and final capital rules to

implement Basel III that were adopted in July 2013.

The Federal Reserve sets risk-based capital ratio and leverage ratio guidelines for bank holding companies.

Under the guidelines and related policies, bank holding companies must maintain capital sufficient to meet both a

risk-based asset ratio test and a leverage ratio test on a consolidated basis. The risk-based ratio is determined by

allocating assets and specified off-balance sheet commitments into four weighted categories, with higher weighting

assigned to categories perceived as representing greater risk. The risk-based ratio represents total capital divided by

total risk-weighted assets. The leverage ratio is core capital divided by total assets adjusted as specified in the

guidelines. The Bank is subject to substantially similar capital requirements.

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On July 2, 2013, the Federal Reserve voted to adopt final capital rules implementing Basel III requirements

for U.S. Banking organizations. The final rules establish an integrated regulatory capital framework and will

implement in the United States the Basel III regulatory capital reforms from the Basel Committee on Banking

Supervision and certain changes required by the Dodd-Frank Act. Under the final rule, minimum requirements will

increase for both the quantity and quality of capital held by banking organizations. Consistent with the international

Basel framework, the final rule includes a new minimum ratio of common equity tier 1 capital (Tier I Common) to

risk-weighted assets and a Tier 1 Common capital conservation buffer of 2.5% of risk-weighted assets that will

apply to all supervised financial institutions. The rule also raises the minimum ratio of tier 1 capital to risk-weighted

assets and includes a minimum leverage ratio of 4% for all banking organizations. These new minimum capital

ratios will become effective for us on January 1, 2015, and will be fully phased-in on January 1, 2019.

Following are the Basel III regulatory capital levels that we must satisfy to avoid limitations on capital

distributions and discretionary bonus payments during the applicable transition period, from January 1, 2015 until

January 1, 2019: Basel III Regulatory Capital Levels

January 1,

2015 January 1,

2016 January 1,

2017 January 1,

2018 January 1,

2019 Tier 1 Common 4.5 % 5.125 % 5.75 % 6.375 % 7.0 % Tier 1 risk-based capital ratio 6.0 % 6.625 % 7.25 % 7.875 % 8.5 % Total risk-based capital ratio 8.0 % 8.625 % 9.25 % 9.875 % 10.5 %

The final rule emphasizes Tier 1 Common capital, the most loss-absorbing form of capital, and implements

strict eligibility criteria for regulatory capital instruments. The final rule also improves the methodology for

calculating risk-weighted assets to enhance risk sensitivity. Banks and regulators use risk weighting to assign

different levels of risk to different classes of assets.

We have evaluated the impact of the Basel III final rule on our regulatory capital ratios and estimate a

reduction of approximately 60 basis points to our Basel I Tier I Common risk-based capital ratio based on our

June 30, 2013 balance sheet composition. The estimate is based on management’s current interpretation,

expectations, and understanding of the final U.S. Basel III rules. We anticipate that our capital ratios, on a Basel III

basis, will continue to exceed the well capitalized minimum capital requirements. We are evaluating options to

mitigate the capital impact of the final rule prior to its effective implementation date.

Based on our review of the Basel III final rule, it is likely that when Basel III becomes effective, the HPCI

Class C preferred securities will no longer constitute Tier 1 capital for us or the Bank. As such, we determined that a

“regulatory capital event” had occurred, based on an opinion of counsel rendered by a law firm experienced in such

matters, and the HPCI board of directors determined to redeem the outstanding Class C preferred securities. HPCI

redeemed all $50 million of the Class C preferred securities on December 31, 2013. The holders of such securities

received the redemption price of $25.00 per share.

Based on the final Basel III rule, banking organizations with more than $15 billion in total consolidated assets

are required to phase-out of additional tier 1 capital any non-qualifying capital instruments (such as trust preferred

securities and cumulative preferred shares) issued before September 12, 2010. We will begin the additional tier I

capital phase-out our trust preferred securities in 2015, but will be able to include these instruments in Tier II capital

as a non-advanced approaches institution.

Generally, under the currently applicable guidelines, a financial institution’s capital is divided into two tiers.

Institutions that must incorporate market risk exposure into their risk-based capital requirements may also have a

third tier of capital in the form of restricted short-term subordinated debt. These tiers are:

• Tier 1 risk-based capital, or core capital, which includes total equity plus qualifying capital securities and

minority interests, excluding unrealized gains and losses accumulated in other comprehensive income, and

nonqualifying intangible and servicing assets.

• Tier 2 risk-based capital, or supplementary capital, which includes, among other things, cumulative and

limited-life preferred stock, mandatory convertible securities, qualifying subordinated debt, and the ACL,

up to 1.25% of risk-weighted assets.

• Total risk-based capital is the sum of Tier 1 and Tier 2 risk-based capital.

The Federal Reserve and the other federal banking regulators require that all intangible assets (net of deferred

tax), except originated or purchased MSRs, nonmortgage servicing assets, and purchased credit card relationships

intangible assets, be deducted from Tier 1 capital. However, the total amount of these items included in capital

cannot exceed 100% of its Tier 1 capital.

Under the risk-based guidelines to remain adequately-capitalized, financial institutions are required to

maintain a total risk-based capital ratio of 8%, with 4% being Tier 1 risk-based capital. The appropriate regulatory

authority may set higher capital requirements when they believe an institution’s circumstances warrant.

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Under the leverage guidelines, financial institutions are required to maintain a Tier 1 leverage ratio of at least

3%. The minimum ratio is applicable only to financial institutions that meet certain specified criteria, including

excellent asset quality, high liquidity, low interest rate risk exposure, and the highest regulatory rating. Financial

institutions not meeting these criteria are required to maintain a minimum Tier 1 leverage ratio of 4%.

Failure to meet applicable capital guidelines could subject the financial institution to a variety of enforcement

remedies available to the federal regulatory authorities. These include limitations on the ability to pay dividends, the

issuance by the regulatory authority of a directive to increase capital, and the termination of deposit insurance by the

FDIC. In addition, the financial institution could be subject to the measures described below under Prompt

Corrective Action as applicable to under-capitalized institutions.

The risk-based capital standards of the Federal Reserve, the OCC, and the FDIC specify that evaluations by

the banking agencies of a bank’s capital adequacy will include an assessment of the exposure to declines in the

economic value of a bank’s capital due to changes in interest rates. These banking agencies issued a joint policy

statement on interest rate risk describing prudent methods for monitoring such risk that rely principally on internal

measures of exposure and active oversight of risk management activities by senior management.

FDICIA requires federal banking regulatory authorities to take Prompt Corrective Action with respect to

depository institutions that do not meet minimum capital requirements. For these purposes, FDICIA establishes five

capital tiers: well-capitalized, adequately-capitalized, under-capitalized, significantly under-capitalized, and

critically under-capitalized.

Throughout 2013, our regulatory capital ratios and those of the Bank were in excess of the levels established

for well-capitalized institutions. An institution is deemed to be well-capitalized if it has a total risk-based capital

ratio of 10% or greater, a Tier 1 risk-based capital ratio of 6% or greater, and a Tier 1 leverage ratio of 5% or greater

and is not subject to a regulatory order, agreement, or directive to meet and maintain a specific capital level for any

capital measure.

At December 31, 2013

(dollar amounts in billions) Well-capitalized minimums Actual Excess

Capital (1) Ratios:

Tier 1 leverage ratio Consolidated 5.00 % 10.67 % $ 3.2 Bank 5.00 9.97 2.8

Tier 1 risk-based capital ratio Consolidated 6.00 12.28 3.1 Bank 6.00 11.45 2.7

Total risk-based capital ratio Consolidated 10.00 14.57 2.3 Bank 10.00 13.14 1.6

(1) Amount greater than the well-capitalized minimum percentage.

FDICIA generally prohibits a depository institution from making any capital distribution, including payment

of a cash dividend or paying any management fee to its holding company, if the depository institution would become

under-capitalized after such payment. Under-capitalized institutions are also subject to growth limitations and are

required by the appropriate federal banking agency to submit a capital restoration plan. If any depository institution

subsidiary of a holding company is required to submit a capital restoration plan, the holding company would be

required to provide a limited guarantee regarding compliance with the plan as a condition of approval of such plan.

Depending upon the severity of the under capitalization, the under-capitalized institutions may be subject to a

number of requirements and restrictions, including orders to sell sufficient voting stock to become adequately-

capitalized, requirements to reduce total assets, cessation of receipt of deposits from correspondent banks, and

restrictions on making any payment of principal or interest on their subordinated debt. Critically under-capitalized

institutions are subject to appointment of a receiver or conservator within 90 days of becoming so classified.

Under FDICIA, a depository institution that is not well-capitalized is generally prohibited from accepting

brokered deposits and offering interest rates on deposits higher than the prevailing rate in its market. Since the Bank

is well-capitalized, the FDICIA brokered deposit rule did not adversely affect its ability to accept brokered deposits.

The Bank had $1.6 billion of such brokered deposits at December 31, 2013.

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As a bank holding company, we must act as a source of financial and managerial strength to the Bank and the

Bank is subject to affiliate transaction restrictions.

Under the Dodd-Frank Act, a bank holding company must act as a source of financial and managerial strength

to each of its subsidiary banks and must commit resources to support each such subsidiary bank. The Federal

Reserve may require a bank holding company to make capital injections into a troubled subsidiary bank. It may

charge the bank holding company with engaging in unsafe and unsound practices if the bank holding company fails

to commit resources to such a subsidiary bank or if it undertakes actions that the Federal Reserve believes might

jeopardize the bank holding company’s ability to commit resources to such subsidiary bank.

Any loans by a holding company to a subsidiary bank are subordinate in right of payment to deposits and to

certain other indebtedness of such subsidiary bank. In the event of a bank holding company’s bankruptcy, an

appointed bankruptcy trustee will assume any commitment by the holding company to a federal bank regulatory

agency to maintain the capital of a subsidiary bank. Moreover, the bankruptcy law provides that claims based on any

such commitment will be entitled to a priority of payment over the claims of the institution’s general unsecured

creditors, including the holders of its note obligations.

Federal law permits the OCC to order the pro-rata assessment of shareholders of a national bank whose capital

stock has become impaired, by losses or otherwise, to relieve a deficiency in such national bank’s capital stock. This

statute also provides for the enforcement of any such pro-rata assessment of shareholders of such national bank to

cover such impairment of capital stock by sale, to the extent necessary, of the capital stock owned by any assessed

shareholder failing to pay the assessment. As the sole shareholder of the Bank, we are subject to such provisions.

Moreover, the claims of a receiver of an insured depository institution for administrative expenses and the

claims of holders of deposit liabilities of such an institution are accorded priority over the claims of general

unsecured creditors of such an institution, including the holders of the institution’s note obligations, in the event of

liquidation or other resolution of such institution. Claims of a receiver for administrative expenses and claims of

holders of deposit liabilities of the Bank, including the FDIC as the insurer of such holders, would receive priority

over the holders of notes and other senior debt of the Bank in the event of liquidation or other resolution and over

our interests as sole shareholder of the Bank.

As a financial holding company, we are subject to additional laws and regulations.

In order to maintain its status as a financial holding company, a bank holding company’s depository

subsidiaries must all be both well-capitalized and well-managed, and must meet their Community Reinvestment Act

obligations.

Financial holding company powers relate to financial activities that are specified in the Bank Holding

Company Act or determined by the Federal Reserve, in coordination with the Secretary of the Treasury, to be

financial in nature, incidental to an activity that is financial in nature, or complementary to a financial activity,

provided that the complementary activity does not pose a safety and soundness risk. In addition, we are required by

the Bank Holding Company Act to obtain Federal Reserve approval prior to acquiring, directly or indirectly,

ownership or control of voting shares of any bank, if, after such acquisition, we would own or control more than 5%

of its voting stock. Furthermore, the Dodd-Frank Act added a new provision to the Bank Holding Company Act,

which requires bank holding companies with total consolidated assets equal to or greater than $50 billion to obtain

prior approval from the Federal Reserve to acquire a nondepository company having total consolidated assets of $10

billion or more.

We also must comply with anti-money laundering and customer privacy regulations, as well as corporate

governance, accounting, and reporting requirements.

The USA Patriot Act of 2001 and its related regulations require insured depository institutions, broker-dealers,

and certain other financial institutions to have policies, procedures, and controls to detect, prevent, and report money

laundering and terrorist financing. Federal banking regulators are required, when reviewing bank holding company

acquisition and bank merger applications, to take into account the effectiveness of the anti-money laundering

activities of the applicants.

Pursuant to Title V of the Gramm-Leach-Bliley Act, we, like all other financial institutions, are required to:

• provide notice to our customers regarding privacy policies and practices,

• inform our customers regarding the conditions under which their nonpublic personal information may be

disclosed to nonaffiliated third parties, and

• give our customers an option to prevent certain disclosure of such information to nonaffiliated third parties.

The Sarbanes-Oxley Act of 2002 imposed new or revised corporate governance, accounting, and reporting

requirements on us. In addition to a requirement that chief executive officers and chief financial officers certify

financial statements in writing, the statute imposed requirements affecting, among other matters, the composition

and activities of audit committees, disclosures relating to corporate insiders and insider transactions, code of ethics,

and the effectiveness of internal controls over financial reporting.

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Available Information

This information may be read and copied at the Public Reference Room of the SEC at 100 F Street, N.E.,

Washington, D.C. 20549. You can obtain information on the operation of the Public Reference Room by calling the

SEC at 1-800-SEC-0330. The SEC also maintains an Internet web site that contains reports, proxy statements, and

other information about issuers, like us, who file electronically with the SEC. The address of the site is

http://www.sec.gov. The reports and other information filed by us with the SEC are also available at our Internet web

site. The address of the site is http://www.huntington.com. Except as specifically incorporated by reference into this

Annual Report on Form 10-K, information on those web sites is not part of this report. You also should be able to

inspect reports, proxy statements, and other information about us at the offices of the NASDAQ National Market at

33 Whitehall Street, New York, New York.

Item 1A: Risk Factors

Risk Governance

We use a multi-faceted approach to risk governance. It begins with the board of directors defining our risk

appetite in aggregate as moderate-to-low. This does not preclude engagement in select higher risk activities. Rather,

the definition is intended to represent an average of where we want our overall risk to be managed.

Two board committees primarily oversee implementation of this desired risk profile: The Audit Committee

and the Risk Oversight Committee.

• The Audit Committee is principally involved with overseeing the integrity of financial statements,

providing oversight of the internal audit department, and selecting our external auditors. Our chief

auditor reports directly to the Audit Committee Chair.

• The Risk Oversight Committee supervises our risk management processes which primarily cover credit, market, liquidity, operational, compliance, legal, strategic, and reputational risks. It also

approves the charters of executive risk management committees, sets risk limits on certain risk

measures (e.g., economic value of equity), receives results of the risk self-assessment process, and

routinely engages management in review of key risks. Our credit review executive reports directly to

the Risk Oversight Committee.

Both committees are comprised of independent directors and routinely hold executive sessions with our key

officers engaged in accounting and risk management. On a periodic basis, the two committees meet in joint session

to cover matters relevant to both such as the construct and appropriateness of the ACL, which is reviewed quarterly.

All directors have access to information provided to each committee and all scheduled meetings are open to all

directors.

Further, through its Compensation Committee, the board of directors seeks to ensure its system of rewards is

risk-sensitive and aligns the interests of management, creditors, and shareholders. We utilize a variety of

compensation-related tools to induce appropriate behavior, including common stock ownership thresholds for the

chief executive officer and certain members of senior management, a requirement to hold until retirement a portion

of net shares received upon exercise of stock options or release of restricted stock awards (50% for executive

officers and 25% for other award recipients), equity deferrals, recoupment provisions, and the right to terminate

compensation plans at any time.

Management has introduced a number of steps to help ensure an aggregate moderate-to-low risk appetite is

maintained. Foremost is a quarterly self-assessment process, in which each business segment produces an analysis of

its risks and the strength of its risk controls. The segment analyses are combined with assessments by our risk

management organization of major risk sectors (e.g., credit, market, operational, reputational, compliance, etc.) to

produce an overall enterprise risk assessment. Outcomes of the process include a determination of the quality of the

overall control process, the direction of risk, and our position compared to the defined risk appetite.

Management also utilizes a wide series of metrics (key risk indicators) to monitor risk positions throughout

the Company. In general, a range for each metric is established which allows the company, in aggregate, to maintain

its moderate-to-low risk profile. Deviations from the range will indicate if the risk being measured is moving, which

may then necessitate corrective action.

We also have four other executive level committees to manage risk: ALCO, Credit Policy and Strategy, Risk

Management, and Capital Management. Each committee focuses on specific categories of risk and is supported by a

series of subcommittees that are tactical in nature. We believe this structure helps ensure appropriate elevation of

issues and overall communication of strategies.

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Huntington utilizes three levels of defense with regard to risk management: (1) business segments,

(2) corporate risk management, and (3) internal audit and credit review. To induce greater ownership of risk within

its business segments, segment risk officers have been embedded to identify and monitor risk, elevate and remediate

issues, establish controls, perform self-testing, and oversee the quarterly self-assessment process. Segment risk

officers report directly to the related segment manager with a dotted line to the Chief Risk Officer. Corporate Risk

Management establishes policies, sets operating limits, reviews new or modified products/processes, ensures

consistency and quality assurance within the segments, and produces the enterprise risk assessment. The Chief Risk

Officer has significant input into the design and outcome of incentive compensation plans as they apply to risk.

Internal Audit and Credit Review provide additional assurance that risk-related functions are operating as intended.

Risk Overview

We, like other financial companies, are subject to a number of risks that may adversely affect our financial

condition or results of operations, 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 of loss

due to loan and lease customers or other counterparties not being able to meet their financial obligations under

agreed upon terms, (2) market risk, which is the risk of loss due to changes in the market value of assets and

liabilities due to changes in market interest rates, foreign exchange rates, equity prices, and credit spreads,

(3) liquidity risk, which is (a) the risk of loss due to the possibility that funds may not be available to satisfy current

or future commitments based on external macro market issues, investor and customer perception of financial

strength, and events unrelated to us such as war, terrorism, or financial institution market specific issues, and (b) the

risk of loss based on our ability to satisfy current or future funding commitments due to the mix and maturity

structure of our balance sheet, amount of on-hand cash and unencumbered securities and the availability of

contingent sources of funding, (4) operational and legal risk, which is the risk of loss due to human error, inadequate

or failed internal systems and controls, violations of, or noncompliance with, laws, rules, regulations, prescribed

practices, or ethical standards, and external influences such as market conditions, fraudulent activities, disasters, and

security risks, and (5) compliance risk, which exposes us to money penalties, enforcement actions or other sanctions

as a result of nonconformance with laws, rules, and regulations that apply to the financial services industry.

We also expend considerable effort to contain risk which emanates from execution of our business strategies

and work relentlessly to protect the Company’s reputation. Strategic risk and reputational risk do not easily lend

themselves to traditional methods of measurement. Rather, we closely monitor them through processes such as new

product / initiative reviews, frequent financial performance reviews, employee and client surveys, monitoring

market intelligence, periodic discussions between management and our board, and other such efforts.

In addition to the other information included or incorporated by reference into this report, readers should

carefully consider that the following important factors, among others, could negatively impact our business, future

results of operations, and future cash flows materially.

Credit Risks:

1. Our ACL level may prove to be inappropriate or be negatively affected by credit risk exposures which

could materially adversely affect our net income and capital.

Our business depends on the creditworthiness of our customers. Our ACL of $710.8 million at December 31,

2013, represented Management’s estimate of probable losses inherent in our loan and lease portfolio as well as our

unfunded loan commitments and letters of credit. We periodically review our ACL for appropriateness. In doing so,

we consider economic conditions and trends, collateral values, and credit quality indicators, such as past charge-off

experience, levels of past due loans, and NPAs. There is no certainty that our ACL will be appropriate over time to

cover losses in the portfolio because of unanticipated adverse changes in the economy, market conditions, or events

adversely affecting specific customers, industries, or markets. If the credit quality of our customer base materially

decreases, if the risk profile of a market, industry, or group of customers changes materially, or if the ACL is not

appropriate, our net income and capital could be materially adversely affected which, in turn, could have a material

adverse effect on our financial condition and results of operations.

In addition, bank regulators periodically review our ACL and may require us to increase our provision for loan

and lease losses or loan charge-offs. Any increase in our ACL or loan charge-offs as required by these regulatory

authorities could have a material adverse effect on our financial condition and results of operations.

2. Weakness in economic conditions could materially adversely affect our business.

Our performance could be negatively affected to the extent there is deterioration in business and economic

conditions which have direct or indirect material adverse impacts on us, our customers, and our counterparties.

These conditions could result in one or more of the following:

• A decrease in the demand for loans and other products and services offered by us;

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• A decrease in customer savings generally and in the demand for savings and investment products offered

by us; and

• An increase in the number of customers and counterparties who become delinquent, file for protection

under bankruptcy laws, or default on their loans or other obligations to us.

An increase in the number of delinquencies, bankruptcies, or defaults could result in a higher level of NPAs,

NCOs, provision for credit losses, and valuation adjustments on loans held for sale. The markets we serve are

dependent on industrial and manufacturing businesses and thus are particularly vulnerable to adverse changes in

economic conditions affecting these sectors.

Market Risks:

1. Changes in interest rates could reduce our net interest income, reduce transactional income, and negatively

impact the value of our loans, securities, and other assets. This could have a material adverse impact on our

cash flows, financial condition, results of operations, and capital.

Our results of operations depend substantially on net interest income, which is the difference between interest

earned on interest earning assets (such as investments and loans) and interest paid on interest bearing liabilities (such

as deposits and borrowings). Interest rates are highly sensitive to many factors, including governmental monetary

policies and domestic and international economic and political conditions. Conditions such as inflation, deflation,

recession, unemployment, money supply, and other factors beyond our control may also affect interest rates. If our

interest earning assets mature or reprice faster than interest bearing liabilities in a declining interest rate

environment, net interest income could be materially adversely impacted. Likewise, if interest bearing liabilities

mature or reprice more quickly than interest earning assets in a rising interest rate environment, net interest income

could be adversely impacted.

Changes in interest rates can affect the value of loans, securities, assets under management, and other assets,

including mortgage and nonmortgage servicing rights. An increase in interest rates that adversely affects the ability

of borrowers to pay the principal or interest on loans and leases may lead to an increase in NPAs and a reduction of

income recognized, which could have a material adverse effect on our results of operations and cash flows. When

we place a loan on nonaccrual status, we reverse any accrued but unpaid interest receivable, which decreases interest

income. However, we continue to incur interest expense as a cost of funding NALs without any corresponding

interest income. In addition, transactional income, including trust income, brokerage income, and gain on sales of

loans can vary significantly from period-to-period based on a number of factors, including the interest rate

environment.

Rising interest rates reduce the value of our fixed-rate debt securities and cash flow hedging derivatives

portfolio. Any unrealized loss from these portfolios impacts OCI, shareholders’ equity, and the Tangible Common

Equity ratio. Any realized loss from these portfolios impacts regulatory capital ratios, notably Tier I and Total risk-

based capital ratios. In a rising interest rate environment, pension and other post-retirement obligations somewhat

mitigate negative OCI impacts from securities and financial instruments.

Certain investment securities, notably mortgage-backed securities, are very sensitive to rising and falling rates.

Generally, when rates rise, prepayments of principal and interest will decrease and the duration of mortgage-backed

securities will increase. Conversely, when rates fall, prepayments of principal and interest will increase and the

duration of mortgage-backed securities will decrease. In either case, interest rates have a significant impact on the

value of mortgage-backed securities investments.

Liquidity Risks:

1. If we lose access to capital markets, we may not be able to meet the cash flow requirements of our

depositors, creditors, and borrowers, or have the operating cash needed to fund corporate expansion and

other corporate activities.

Liquidity is the ability to meet cash flow needs on a timely basis at a reasonable cost. The Bank uses its

liquidity to extend credit and to repay liabilities as they become due or as demanded by customers. The board of

directors establishes liquidity policies and limits and Management establishes operating guidelines for liquidity.

Wholesale funding sources include securitization, federal funds purchased, securities sold under repurchase

agreements, non-core deposits, and medium- and long-term debt. The Bank is also a member of the Federal Home

Loan Bank of Cincinnati, which provides members access to funding through advances collateralized with

mortgage-related assets. We maintain a portfolio of highly-rated, marketable securities that is available as a source

of liquidity.

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Capital markets disruptions can directly impact the liquidity of the Bank and Corporation. The inability to

access capital markets funding sources as needed could adversely impact our financial condition, results of

operations, cash flows, and level of regulatory-qualifying capital. We may, from time-to-time, consider using our

existing liquidity position to opportunistically retire outstanding securities in privately negotiated or open market

transactions.

2. Due to the losses that the Bank incurred in 2008 and 2009, prior to December 31, 2013, the Bank and its

subsidiaries could not declare and pay dividends to the holding company, any subsidiary of the holding

company outside the Bank’s consolidated group, or any security holder outside the Bank’s consolidated

group, without regulatory approval. Also, the Bank may not pay a dividend in an amount greater than its

undivided profits.

Dividends from the Bank to the parent company are the primary source of funds for the payment of dividends

to our shareholders. Under applicable statutes and regulations, a national bank may not declare and pay dividends in

any year greater than its undivided profits or in excess of an amount equal to the sum of the total of the net income

of the bank for that year and the retained net income of the bank for the preceding two years, minus the sum of any

transfers required by the OCC and any transfers required to be made to a fund for the retirement of any preferred

stock, unless the OCC approves the declaration and payment of dividends in excess of such amount. The Bank’s

undivided profits were in a deficit position until December 2013. We anticipate that the Bank will declare dividends

to the holding company during the first half of 2014.

Operational and Legal Risks:

1. The resolution of significant pending litigation, if unfavorable, could have a material adverse effect on our

results of operations for a particular period.

We face legal risks in our businesses, and the volume of claims and amount of damages and penalties claimed

in litigation and regulatory proceedings against financial institutions remain high. Substantial legal liability against

us could have material adverse financial effects or cause significant reputational harm to us, which in turn could

seriously harm our business prospects. It is possible that the ultimate resolution of these matters, if unfavorable, may

be material to the results of operations for a particular reporting period.

Note 22 of the Notes to Consolidated Financial Statements updates the status of litigation concerning Cyberco

Holdings, Inc. Although the bank maintains litigation reserves related to this case, the ultimate resolution of the

matter, if unfavorable, may be material to our results of operations for a particular reporting period.

2. We face significant operational risks which could lead to expensive litigation and loss of confidence by our

customers, regulators, and capital markets.

We are exposed to many types of operational risks, including cyber-attack risk, the risk of fraud or theft by

employees or outsiders, unauthorized transactions by employees or outsiders, or operational errors by employees,

including clerical or record-keeping errors or those resulting from faulty or disabled computer or

telecommunications systems. These operational risks could lead to expensive litigation and loss of confidence by

our customers, regulators, and the capital markets.

Moreover, negative public opinion can result from our actual or alleged conduct in any number of activities,

including lending practices, corporate governance, and acquisitions and from actions taken by government

regulators and community organizations in response to those activities. Negative public opinion can adversely affect

our ability to attract and retain customers and can also expose us to litigation and regulatory action.

Relative to acquisitions, we cannot predict if, or when, we will be able to identify and attract acquisition

candidates or make acquisitions on favorable terms. We incur risks and challenges associated with the integration of

acquired institutions in a timely and efficient manner, and we cannot guarantee that we will be successful in

retaining existing customer relationships or achieving anticipated operating efficiencies.

Huntington is under continuous threat of loss due to cyber-attacks especially as we continue to expand

customer capabilities to utilize internet and other remote channels to transact business. The most significant cyber–

attack risks that we face are e-fraud, denial of service, and loss of sensitive customer data. Loss from e-fraud occurs

when cybercriminals breach and extract funds directly from customer or our accounts. Loss can occur as a result of

negative customer experience in the event of a successful denial of service attack that disrupts availability of our on-

line banking services. The attempts to breach sensitive customer data, such as account numbers and social security

numbers, could present significant reputational, legal and/or regulatory costs to us if successful. Our risk and

exposure to these matters remains heightened because of the evolving nature and complexity of these threats from

cybercriminals and hackers, our plans to continue to provide internet banking and mobile banking channels, and our

plans to develop additional remote connectivity solutions to serve our customers.

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3. Failure to maintain effective internal controls over financial reporting in the future could impair our

ability to accurately and timely report our financial results or prevent fraud, resulting in loss of investor

confidence and adversely affecting our business and stock price.

Effective internal controls over financial reporting are necessary to provide reliable financial reports and

prevent fraud. As a financial holding company, we are subject to regulation that focuses on effective internal

controls and procedures. Such controls and procedures are modified, supplemented, and changed from time-to-time

as necessitated by our growth and in reaction to external events and developments. Any failure to maintain, in the

future, an effective internal control environment could impact our ability to report our financial results on an

accurate and timely basis, which could result in regulatory actions, loss of investor confidence, and adversely impact

our business and stock price.

Compliance Risks:

1. Bank regulators and other regulations, including Basel III capital standards and CCAR, may require

higher capital levels, impacting our ability to pay common stock dividends or repurchase our common stock.

On July 2, 2013, the Federal Reserve voted to adopt final Basel III capital rules for U.S. Banking

organizations. The final rules establish an integrated regulatory capital framework and will implement in the United

States the Basel III regulatory capital reforms from the Basel Committee on Banking Supervision and certain

changes required by the Dodd-Frank Act. Under the final rule, minimum requirements will increase for both the

quantity and quality of capital held by banking organizations. As a Standardized Approach institution, the Basel III

minimum capital requirements will become effective for us on January 1, 2015, and will be fully phased-in on

January 1, 2019.

The Federal Reserve has issued guidelines for evaluating proposals by certain bank holding companies,

including us, to undertake capital actions, such as increasing dividend payments or repurchasing or redeeming stock.

This process is known as CCAR. CCAR includes a quantitative examination component in which BHC-specific data

is run through models developed by the Federal Reserve with the intention of estimating capital levels in a

hypothetical severely adverse economic scenario. Capital plans for 2014 were required to be submitted by January 6,

2014. The Federal Reserve will either object to a capital plan, in whole or in part, or provide a notice of non-

objection no later than March 31, 2014, for plans submitted by the January 6, 2014 submission date. We submitted

our capital plan to the Federal Reserve on January 5, 2014.

The Federal Reserve and OCC are expected to undertake these capital plan reviews on a regular basis in the

future. There can be no assurance that the Federal Reserve or OCC will respond favorably to our capital plan as part

of their future capital plan reviews, and the Federal Reserve, OCC, or other regulatory capital requirements may

limit or otherwise restrict how we utilize our capital, including common stock dividends and stock repurchases.

Although not currently anticipated, our regulators may require us to raise additional capital in the future. Issuing

additional common stock may dilute existing stockholders.

2. If our regulators deem it appropriate, they can take regulatory actions that could result in a material

adverse impact on our ability to compete for new business, constrain our ability to fund our liquidity needs or

pay dividends, and increase the cost of our services.

We are subject to the supervision and regulation of various state and Federal regulators, including the OCC,

Federal Reserve, FDIC, SEC, CFPB, Financial Industry Regulatory Authority, and various state regulatory agencies.

As such, we are subject to a wide variety of laws and regulations, many of which are discussed in the Regulatory

Matters section. As part of their supervisory process, which includes periodic examinations and continuous

monitoring, the regulators have the authority to impose restrictions or conditions on our activities and the manner in

which we manage the organization. Such actions could negatively impact us in a variety of ways, including

monetary fines, impacting our ability to pay dividends, precluding mergers or acquisitions, limiting our ability to

offer certain products or services, or imposing additional capital requirements.

With the development of the CFPB, our consumer products and services are subject to increasing regulatory

oversight and scrutiny with respect to compliance under consumer laws and regulations. We may face a greater

number or wider scope of investigations, enforcement actions and litigation in the future related to consumer

practices, thereby increasing costs associated with responding to or defending such actions. In addition, increased

regulatory inquiries and investigations, as well as any additional legislative or regulatory developments affecting our

consumer businesses, and any required changes to our business operations resulting from these developments, could

result in significant loss of revenue, limit the products or services we offer, require us to increase our prices and

therefore reduce demand for our products, impose additional compliance costs on us, cause harm to our reputation or

otherwise adversely affect our consumer businesses.

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3. Legislative and regulatory actions taken now or in the future that impact the financial industry may

materially adversely affect us by increasing our costs, adding complexity in doing business, impeding the

efficiency of our internal business processes, negatively impacting the recoverability of certain of our

recorded assets, requiring us to increase our regulatory capital, limiting our ability to pursue business

opportunities, and otherwise result in a material adverse impact on our financial condition, results of

operation, liquidity, or stock price.

The Dodd-Frank Act represents a comprehensive overhaul of the financial services industry within the United

States, establishes the CFPB, and requires the bureau and other federal agencies to implement many new and

significant rules and regulations. At this time, it is difficult to predict the extent to which the Dodd-Frank Act, or the

resulting rules and regulations in their entirety, will impact our business. Compliance with these new laws and

regulations will result in additional costs, which could be significant, and may have a material and adverse effect on

our results of operations. In addition, if we do not appropriately comply with current or future legislation and

regulations that apply to our consumer operations, we may be subject to fines, penalties or judgments, or material

regulatory restrictions on our businesses, which could adversely affect operations and, in turn, financial results.

Item 1B: Unresolved Staff Comments

None.

Item 2: Properties

Our headquarters, as well as the Bank’s, are located in the Huntington Center, a thirty-seven-story office

building located in Columbus, Ohio. Of the building’s total office space available, we lease approximately 28%. The

lease term expires in 2030, with six five-year renewal options for up to 30 years but with no purchase option. The

Bank has an indirect minority equity interest of 18.4% in the building.

Our other major properties consist of the following: Description Location Own Lease 13 story office building, located adjacent to the Huntington Center Columbus, Ohio 

12 story office building, located adjacent to the Huntington Center Columbus, Ohio  3 story office building - the Crosswoods building Columbus, Ohio



A portion of 200 Public Square Building Cleveland, Ohio

 12 story office building Youngstown, Ohio 

10 story office building Warren, Ohio

 10 story office building Toledo, Ohio 

A portion of the Grant Building Pittsburgh, PA

 18 story office building Charleston, West Virginia



3 story office building Holland, Michigan

 2 building office complex Troy, Michigan



Data processing and operations center (Easton) Columbus, Ohio  Data processing and operations center (Northland) Columbus, Ohio



Data processing and operations center (Parma) Cleveland, Ohio

 8 story office building Indianapolis, Indiana 

Item 3: Legal Proceedings

Information required by this item is set forth in Note 22 of the Notes to Consolidated Financial Statements and

incorporated into this Item by reference.

Item 4: Mine Safety Disclosures

Not applicable.

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PART II

Item 5: Market for Registrant’s Common Equity, Related Shareholder Matters and Issuer Purchases of

Equity Securities

The common stock of Huntington Bancshares Incorporated is traded on the NASDAQ Stock Market under the

symbol “HBAN”. The stock is listed as “HuntgBcshr” or “HuntBanc” in most newspapers. As of January 31, 2014,

we had 22,248 shareholders of record.

Information regarding the high and low sale prices of our common stock and cash dividends declared on such

shares, as required by this item, is set forth in Table 46 entitled Selected Quarterly Income Statement Data and

incorporated into this Item by reference. Information regarding restrictions on dividends, as required by this Item, is

set forth in Item 1 Business-Regulatory Matters and in Note 23 of the Notes to Consolidated Financial Statements

and incorporated into this Item by reference.

The following graph shows the changes, over the five-year period, in the value of $100 invested in (i) shares

of Huntington’s Common Stock; (ii) the Standard & Poor’s 500 Stock Index (the “S&P 500 Index”) and (iii) Keefe,

Bruyette & Woods Bank Index (the “KBW Bank Index”), for the period December 31, 2008, through December 31,

2013. The KBW Bank Index is a market capitalization-weighted bank stock index published by Keefe, Bruyette &

Woods. The index is composed of the largest banking companies and includes all money center banks and regional

banks, including Huntington. An investment of $100 on December 31, 2008, and the reinvestment of all dividends

are assumed. The plotted points represent the closing price on the last trading day of the fiscal year indicated.

The following table provides information regarding Huntington’s purchases of its Common Stock during the

three-month period ended December 31, 2013:

Period

Total Number

of Shares

Purchased

Average

Price Paid

Per Share

Total Number of Shares

Purchased as Part of

Publicly Announced

Plans or Programs (1)

Maximum Number of Shares (or

Approximate Dollar Value) that

May Yet Be Purchased Under

the Plans or Programs (2) October 1, 2013 to

October 31, 2013 — — 11,969,724 $ 135,845,179 November 1, 2013 to

November 30, 2013 — — 11,969,724 135,845,179 December 1, 2013 to

December 31, 2013 — — 11,969,724 135,845,179

Total — — 11,969,724 $ 135,845,179

(1) The reported shares were repurchased pursuant to Huntington’s publicly announced stock repurchase authorization, which became effective April 1, 2013.

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(2) The number shown represents, as of the end of each period, the maximum number of shares (approximate dollar value) of Common Stock that may yet be purchased under publicly announced stock repurchase authorizations.

The shares may be purchased, from time-to-time, depending on market conditions.

On March 14, 2013, Huntington Bancshares Incorporated announced that the Federal Reserve did not object to

Huntington’s proposed capital actions included in Huntington’s capital plan submitted to the Federal Reserve in

January 2013. These actions included the potential repurchase of up to $227 million of common stock and a

continuation of Huntington’s current common dividend through the first quarter of 2014. Huntington’s Board of

Directors authorized a share repurchase program consistent with Huntington’s capital plan. During the 2013 fourth

quarter, Huntington did not repurchase any shares. For the year ended December 31, 2013, Huntington purchased

16.7 million common shares at a weighted average price of $7.46 per share. For the year ended December 31, 2012,

Huntington purchased 23.3 million common shares at a weighted average price of $6.36 per share.

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Item 6: Selected Financial Data

Table 1—Selected Financial Data(1)

Year Ended December 31, (dollar amounts in thousands, except per share

amounts)

2013 2012 2011 2010 2009 Interest income

$ 1,860,637 $ 1,930,263 $ 1,970,226 $ 2,145,392 $ 2,238,142 Interest expense

156,029 219,739 341,056 526,587 813,855

Net interest income 1,704,608 1,710,524 1,629,170 1,618,805 1,424,287

Provision for credit losses 90,045 147,388 174,059 634,547 2,074,671

Net interest income after provision for

credit losses

1,614,563 1,563,136 1,455,111 984,258 (650,384 ) Noninterest income

997,995 1,097,857 980,623 1,041,858 1,005,644 Noninterest expense:

Goodwill impairment

— — — — 2,606,944 Other noninterest expense

1,758,003 1,835,876 1,728,500 1,673,805 1,426,499

Total noninterest expense 1,758,003 1,835,876 1,728,500 1,673,805 4,033,443

Income (loss) before income taxes

854,555 825,117 707,234 352,311 (3,678,18

3 ) Provision (benefit) for income taxes

215,814 184,095 164,621 39,964 (584,004 )

Net income (loss)

$ 638,741 $ 641,022 $ 542,613 $ 312,347 $ (3,094,17

9 )

Dividends on preferred shares 31,869 31,989 30,813 172,032 174,756

Net income (loss) applicable to common

shares

$ 606,872 $ 609,033 $ 511,800 $ 140,315 $ (3,268,93

5 )

Net income (loss) per common share—

basic

$ 0.73 $ 0.71 $ 0.59 $ 0.19 $ (6.14 ) Net income (loss) per common share—

diluted

0.72 0.71 0.59 0.19 (6.14 ) Cash dividends declared per common

share 0.19 0.16 0.10 0.04 0.04

Balance sheet highlights

Total assets (period end)

$ 59,476,34

4 $ 56,153,18

5 $ 54,450,65

2 $ 53,819,64

2 $ 51,554,66

5 Total long-term debt (period end)(2)

2,458,272 1,364,834 3,097,857 3,813,827 3,802,670 Total shareholders’ equity (period end)

6,099,323 5,790,211 5,418,100 4,980,542 5,336,002 Average long-term debt(2)

2,372,765 2,273,140 3,275,913 3,953,177 5,558,001

Average shareholders’ equity 5,914,914 5,671,455 5,237,541 5,482,502 5,787,401

Average total assets

56,299,31

3 55,673,59

9 53,750,05

4 52,574,23

1 52,440,26

8 Key ratios and statistics

Margin analysis—as a % of average

earnings assets

Interest income

(3)

3.66 % 3.85 %

4.09 %

4.55 %

4.88 % Interest expense

0.30 0.44 0.71 1.11 1.77

Net interest margin(3)

3.36 %

3.41 %

3.38 %

3.44 %

3.11 %

Return on average total assets

1.13 %

1.15 %

1.01 %

0.59 %

(5.90 )%

Return on average common

shareholders’ equity 11.0 11.5 10.5 3.7 (80.8 )

Return on average tangible common

shareholders’

equity(4), (8)

12.7 13.5 12.7 5.6 (22.4 ) Efficiency ratio(5)

62.9 63.4 63.7 60.4 55.4 Dividend payout ratio

26.0 22.5 16.9 21.1 N.R. Average shareholders’ equity to average

assets

10.51 10.19 9.74 10.43 11.04 Effective tax rate (benefit)

25.3 22.3 23.3 11.3 (15.9 ) Tier 1 common risk-based capital ratio

(period end)(8) 10.90 10.48 10.00 9.29 6.76

Tangible common equity to tangible

assets (period end) (6), (8)

8.83 8.76 8.30 7.56 5.92 Tangible equity to tangible assets

(period end)(7), (8)

9.49 9.46 9.02 8.24 9.24 Tier 1 leverage ratio (period end)

10.67 10.36 10.28 9.41 10.09 Tier 1 risk-based capital ratio (period

end)

12.28 12.02 12.11 11.55 12.15 Total risk-based capital ratio (period

end)

14.57 14.50 14.77 14.46 14.55 Other data

Full-time equivalent employees

(average)

11,964 11,494 11,398 11,038 10,384 Domestic banking offices (period end)

711 705 668 620 611

N.R.—Not relevant, as denominator of calculation is a loss in prior period compared with income in current period.

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(1) Comparisons for presented periods are impacted by a number of factors. Refer to the Significant Items for additional discussion regarding these key factors.

(2) Includes FHLB advances, subordinated notes, and other long-term debt. At December 31, 2013, FHLB

advances excludes $1.8 billion of advances that are short-term in nature. (3)

On an FTE basis assuming a 35% tax rate.

(4) Net income (loss) less expense excluding amortization of intangibles for the period divided by average tangible

shareholders’ equity. Average tangible shareholders’ equity equals average total shareholders’ equity less

average intangible assets and goodwill. Expense for amortization of intangibles and average intangible assets

are net of deferred tax liability, and calculated assuming a 35% tax rate. (5)

Noninterest expense less amortization of intangibles divided by the sum of FTE net interest income and noninterest income excluding securities gains.

(6) Tangible common equity (total common equity less goodwill and other intangible assets) divided by tangible

assets (total assets less goodwill and other intangible assets). Other intangible assets are net of deferred tax, and

calculated assuming a 35% tax rate. (7)

Tangible equity (total equity less goodwill and other intangible assets) divided by tangible assets (total assets less goodwill and other intangible assets). Other intangible assets are net of deferred tax, and calculated

assuming a 35% tax rate. (8)

Tier 1 common equity, tangible equity, tangible common equity, and tangible assets are non-GAAP financial measures. Additionally, any ratios utilizing these financial measures are also non-GAAP. These financial

measures have been included as they are considered to be critical metrics with which to analyze and evaluate

financial condition and capital strength. Other companies may calculate these financial measures differently.

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Item 7: Management’s Discussion and Analysis of Financial Condition and Results of Operations

INTRODUCTION

We are a multi-state diversified regional bank holding company organized under Maryland law in 1966 and

headquartered in Columbus, Ohio. Through the Bank, we have 148 years of servicing the financial needs of our

customers. Through our subsidiaries, we provide full-service commercial and consumer banking services, mortgage

banking services, automobile financing, equipment leasing, investment management, trust services, brokerage

services, insurance service programs, and other financial products and services. Our 695 branches are located in

Ohio, Michigan, Pennsylvania, Indiana, West Virginia, and Kentucky. Selected financial services and other

activities are also conducted in various other states. International banking services are available through the

headquarters office in Columbus, Ohio and a limited purpose office located in the Cayman Islands and another

limited purpose office located in Hong Kong. Our foreign banking activities, in total or with any individual country,

are not significant.

The following MD&A provides information we believe necessary for understanding our financial condition,

changes in financial condition, results of operations, and cash flows. The MD&A should be read in conjunction with

the Consolidated Financial Statements, Notes to Consolidated Financial Statements, and other information contained

in this report.

Our discussion is divided into key segments:

• Executive Overview – Provides a summary of our current financial performance, and business overview,

including our thoughts on the impact of the economy, legislative and regulatory initiatives, and recent

industry developments. This section also provides our outlook regarding our 2014 expectations.

• Discussion of Results of Operations—Reviews financial performance from a consolidated perspective. It also includes a Significant Items section that summarizes key issues helpful for understanding performance

trends. Key consolidated average balance sheet and income statement trends are also discussed in this

section.

• Risk Management and Capital - Discusses credit, market, liquidity, operational risks, and compliance including how these are managed, as well as performance trends. It also includes a discussion of liquidity

policies, how we obtain funding, 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.

• Business Segment Discussion—Provides an overview of financial performance for each of our major

business segments and provides additional discussion of trends underlying consolidated financial

performance.

• Results for the Fourth Quarter - Provides a discussion of results for the 2013 fourth quarter compared with the 2012 fourth quarter.

• Additional Disclosures - Provides comments on important matters including forward-looking statements,

critical accounting policies and use of significant estimates, recent accounting pronouncements and

developments, and acquisitions.

EXECUTIVE OVERVIEW

2013 Financial Performance Review

In 2013, we reported net income of $638.7 million, or $0.72 per common share, relatively unchanged from the

prior year. This resulted in a 1.13% return on average assets and a 12.7% return on average tangible common equity.

In addition, we grew our base of consumer and business customers while our efficiency ratio decreased to 62.9% in

2013 from 63.4% in 2012. Results from our strategic business investments and OCR sales approach continued in

2013. (Also, see Significant Items Influencing Financial Performance Comparisons within the Discussion of Results

of Operations.)

Fully-taxable equivalent net interest income was $1.7 billion in 2013, an increase of $1.0 million, or less than

1%, compared with 2012. This reflected the impact of 4% loan growth, offset by a 5 basis point decline in the net

interest margin to 3.36%, as well as a 7% reduction in other earning assets, the majority of which were loans held

for sale. The loan growth reflected an increase in average C&I loans due to continued growth within the middle

market healthcare vertical, equipment finance, and dealer floorplan loans. Also, our average automobile loans

increased, as the growth in originations remained strong and we kept these loans on our balance sheet instead of

selling them through securitizations. As expected, our CRE portfolio declined, reflecting continued runoff as

acceptable returns for new originations were balanced against internal concentration limits and increased

competition for projects sponsored by high quality developers. Average loans held-for-sale decreased, reflecting the

impact of automobile securitizations completed in 2012 and no such securitizations in 2013.

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Noninterest income was $1.0 billion in 2013, a 9% decrease compared with 2012. Mortgage banking income

was down $64.2 million due to a reduction in volume, lower gain on sale margin, and a higher percentage of

originations held on the balance sheet. In addition, gains on sale of loans were down $40.0 million due to no auto

securitizations in 2013. Service charges increased $9.6 million in 2013 despite a decrease of approximately $28

million due to a change that we made in February 2013 on posting order for our consumer transaction accounts.

Noninterest expense was $1.8 billion in 2013, a 4% decrease compared with 2012. The decrease was primarily

due to lower marketing, deposit and other insurance, professional services and other expense as we actively

managed the pace and size of investment. Other expense declined due to lower mortgage repurchase and warranty,

and OREO and foreclosure expenses. This was partially offset by franchise repositioning expense related significant

items included in net occupancy ($12.1 million), personnel costs ($6.7 million), equipment ($2.4 million), outside

data processing and other services ($1.4 million), and other expense ($1.0 million). The increase in personnel costs

primarily related to the increase in the number of average full-time equivalent employees was partially offset by a

significant item of $33.9 million from the pension curtailment gain.

Most credit quality related metrics in 2013 reflected continued improvement. NALs declined $85.6 million, or

21%, from 2012 to $322.1 million, or 0.75% of total loans and leases. NPAs declined $93.6 million, or 21%,

compared to a year-ago to $352.2 million, or 0.82% of total loans and leases, OREO, and other NPAs. The decreases

primarily reflected meaningful improvement in both CRE and C&I NALs. The provision for credit losses decreased

$57.3 million, or 39%, from 2012 due to the continued decline in classified, criticized, and nonaccrual loans and

included the implementation of enhancements to our ALLL model. NCOs decreased $153.8 million, or 45%, from

the prior year to $188.7 million. NCOs were an annualized 0.45% of average loans and leases in the current year

compared to 0.85% in 2012. Within the consumer portfolio, NCOs related to Chapter 7 bankruptcy loans amounted

to $22.8 million in 2013 and $34.6 million in 2012. The ACL as a percentage of total loans and leases decreased to

1.65% from 1.99% a year ago, while the ACL as a percentage of period-end total NALs increased to 221% from

199%.

The tangible common equity to tangible assets ratio at December 31, 2013, was 8.83%, up 7 basis points from

a year ago. Our Tier 1 common risk-based capital ratio at year end was 10.90%, up from 10.48% at the end of 2012.

The regulatory Tier 1 risk-based capital ratio at December 31, 2013, was 12.28%, up from 12.02% at December 31,

2012. The increase in the regulatory Tier 1 risk-based capital ratio reflected the increase in retained earnings,

partially offset by the redemption of $50 million of qualifying REIT preferred securities in the 2013 fourth quarter,

and growth in risk-weighted assets. All capital ratios were impacted by the repurchase of 17 million common shares

over the last four quarters, none of which were repurchased during the 2013 fourth quarter. We have the ability to

repurchase up to $136 million additional shares of common stock through the first quarter of 2014. We intend to

continue disciplined repurchase activity consistent with our annual capital plan, our capital return objectives, and

market conditions.

Business Overview

General

Our general business objectives are: (1) grow net interest income and fee income, (2) increase cross-sell and

share-of-wallet across all business segments, (3) improve efficiency ratio, (4) continue to strengthen risk

management, including sustained improvements in credit metrics, and (5) maintain strong capital and liquidity

positions.

In 2013, we grew our base of consumer and business customers, while achieving positive operating leverage.

Our performance in the second half of 2013 demonstrates strong business momentum, positioning us well for 2014.

Highlights of our financial strength in 2013 include a strong balance sheet, ongoing deposit growth and quality loan

growth in commercial and auto lending. Our deposit and lending growth is the result of focused execution and key

strategic investments made over the last four years. We have done all of this while decreasing expenses by 4 percent,

year over year, as the result of disciplined expense management.

We continue to face strong competition from other banks and financial service firms in our markets. To

address these challenges, the cornerstone of our strategy has been to invest in the franchise in order to grow our

market share and share-of-wallet. In this regard, our OCR methodology continued to deliver success in 2013.

Consumer checking account households grew by 96 thousand households, or 8%, over the last year. Commercial

relationships grew at a rate of 6% and have increased by 9 thousand commercial customers since 2012. Our “Fair

Play” philosophy, combined with continued OCR success, positively impacted results in 2013.

Economy

The environment in 2013 was different than we thought it would be when we started the year, as the

economic, interest rate, and political environments were more challenging. Currently, we are seeing good

momentum going into 2014, as customers seem to have a slightly better mindset as the political environment seems

to be less of an issue and the general economic outlook is more positive as evidenced by the following:

• Although slower than the national growth rate of 1.74%, aggregate employment growth in our footprint

states remained positive at 0.89% over the 12 month period ended October 2013.

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• According to the Philadelphia FRB Coincident Economic Activity Index, Michigan, Indiana, and Ohio

outperformed the nation in the economic recovery to date and prospects for growth over the next six

months appear positive.

• Industrial vacancy rates have shown declining trends in our large footprint MSAs.

• Consistent with long-term trends, housing prices have been rising broadly across our footprint over 2013

and have tended to be more stable than the national average.

Legislative and Regulatory

A comprehensive discussion of legislative and regulatory matters affecting us can be found in the Regulatory

Matters section included in Item 1 of this Form 10-K.

2014 Expectations

Net interest income is expected to moderately increase. We anticipate an increase in earning assets as total

loans moderately grow and investment securities remain near current levels. However, those benefits to net interest

income are expected to be mostly offset by continued downward pressure on NIM. While we are maintaining a

disciplined approach to loan pricing, asset yields remain under pressure but the continued opportunity of deposit

repricing remains, albeit closer to current levels.

The C&I portfolio is expected to grow consistent with the anticipated increase in customer activity. Our C&I

loan pipeline remains robust with much of this reflecting the positive impact from our investments in specialized

commercial verticals, automotive dealer relationships, focused OCR sales process, and continued support of middle

market and small business lending. Automobile loan originations remain strong, and we currently do not anticipate

any automobile securitizations in the near future. Residential mortgages, home equity, and CRE loan balances are

expected to increase modestly.

We anticipate the increase in total loans will modestly outpace growth in total deposits. This reflects our

continued focus on the overall cost of funds, through the issuance of long-term debt, as well as the continued shift

towards low- and no-cost demand deposits and money market deposit accounts.

Noninterest income, excluding the impact of any net MSR activity, is expected to be slightly lower than recent

levels, due to the anticipated decline in mortgage banking revenues and the continued refinement of products under

our Fair Play philosophy.

Noninterest expense, excluding the net $10 million of benefit from Significant Items we experienced in 2013,

is expected to remain around current levels. We are committed to delivering positive operating leverage for the 2014

full year.

NPAs are expected to show continued improvement. This year, NCOs represented the mid-point of our

expected normalized range of 35 to 55 basis points. The level of provision for credit losses was below our long-term

expectation, and we continue to expect moderate quarterly volatility.

The effective tax rate for 2014 is expected to be in the range of 25% to 28%, primarily reflecting the impacts

of tax-exempt income, tax-advantaged investments, and general business credits.

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Table 2—Selected Annual Income Statements (1)

Year Ended December 31,

Change from 2012 Change from 2011 (dollar amounts in thousands, except per share

amounts)

2013

Amount Percen

t 2012 Amount Percen

t 2011

Interest income

$ 1,860,63

7

$ (69,62

6 )

(4 )%

$ 1,930,26

3 $ (39,963 )

(2 )

% $ 1,970,22

6 Interest expense

156,029

(63,71

0 )

(29 ) 219,739 (121,31

7 )

(36 ) 341,056

Net interest income

1,704,60

8

(5,916 )

— 1,710,52

4 81,354 5 1,629,17

0 Provision for credit losses

90,045

(57,34

3 )

(39 ) 147,388 (26,671 )

(15 ) 174,059

Net interest income after

provision for credit losses

1,614,56

3

51,427 3 1,563,13

6 108,025 7 1,455,11

1

Service charges on deposit

accounts

271,802

9,623 4 262,179 18,672 8 243,507 Mortgage banking income

126,855

(64,23

7 )

(34 ) 191,092 107,684 129 83,408 Trust services

123,007

1,110 1 121,897 2,515 2 119,382 Electronic banking

92,591

10,301 13 82,290 (29,407 )

(26 ) 111,697 Insurance income

69,264

(2,055 )

(3 ) 71,319 1,849 3 69,470 Brokerage income

69,189

(3,037 )

(4 ) 72,226 (8,141 )

(10 ) 80,367 Bank owned life insurance

income

56,419

377 1 56,042 (6,294 )

(10 ) 62,336 Capital markets fees

45,220

(2,940 )

(6 ) 48,160 11,620 32 36,540 Gain on sale of loans

18,171

(40,01

1 )

(69 ) 58,182 26,238 82 31,944 Securities gains (losses)

418

(4,351

)

(91 ) 4,769 8,450 N.R

. (3,681 )

Other income

125,059

(4,642 )

(4 ) 129,701 (15,952 )

(11 ) 145,653

Total noninterest income

997,995

(99,86

2 )

(9 ) 1,097,85

7 117,234 12 980,623

Personnel costs

1,001,63

7

13,444 1 988,193 95,659 11 892,534 Outside data processing and other

services

199,547

9,292 5 190,255 1,081 1 189,174 Net occupancy

125,344 14,184 13 111,160 2,031 2 109,129

Equipment 106,793

3,846 4 102,947 10,403 11 92,544 Marketing

51,185

(13,07

8 )

(20 ) 64,263 (1,297 )

(2 ) 65,560 Deposit and other insurance

expense

50,161

(18,16

9 )

(27 ) 68,330 (9,362 )

(12 ) 77,692 Amortization of intangibles

41,364

(5,185 )

(11 ) 46,549 (6,769 )

(13 ) 53,318 Professional services

40,587

(25,17

1 )

(38 ) 65,758 (2,858 )

(4 ) 68,616 Gain on early extinguishment of

debt —

798 N.R (798

)

8,899 (92 ) (9,697 )

Other expense

141,385

(57,83

4 )

(29 ) 199,219 9,589 5 189,630

Total noninterest expense

1,758,00

3

(77,87

3 )

(4 ) 1,835,87

6 107,376 6 1,728,50

0

Income before income taxes 854,555

29,438 4 825,117 117,883 17 707,234 Provision for income taxes

215,814

31,719 17 184,095 19,474 12 164,621

Net income

$ 638,741

$ (2,281 )

— % $ 641,022 $ 98,409 18 % $ 542,613

Dividends on preferred shares

31,869

(120 )

— 31,989 1,176 4 30,813

Net income applicable to common

shares

$ 606,872

$ (2,161 )

— % $ 609,033 $ 97,233 19 % $ 511,800

Average common shares—basic

834,205

(23,75

7 )

(3 )%

857,962 (5,729 )

(1 )

% 863,691 Average common shares—diluted(2)

843,974

(19,42

8 )

(2 ) 863,402 (4,222 )

— 867,624 Per common share:

Net income—basic

$ 0.73

$ 0.02 3 % $ 0.71 $ 0.12 20 % $ 0.59 Net income—diluted

0.72 0.01 1 0.71 0.12 20 0.59

Cash dividends declared 0.19

0.03 19 0.16 0.06 60 0.10 Revenue—FTE

Net interest income

$ 1,704,60

8

$ (5,916 )

— % $ 1,710,52

4 $ 81,354 5 % $ 1,629,17

0 FTE adjustment

27,340

6,934 34 20,406 5,490 37 14,916

Net interest income(3)

1,731,94

8

1,018 — 1,730,93

0 86,844 5 1,644,08

6 Noninterest income

997,995

(99,86

2 )

(9 ) 1,097,85

7 117,234 12 980,623

Total revenue(3)

$ 2,729,94

3

$ (98,84

4 )

(3 )%

$ 2,828,78

7 $ 204,078 8 % $ 2,624,70

9

N.R. — Not relevant, as denominator of calculation is a loss in prior period compared with income in current period. (1)

Comparisons for presented periods are impacted by a number of factors. Refer to “Significant Items”. (2)

Net income excluding expense for amortization of intangibles for the period divided by average tangible common shareholders’ equity. Average tangible common shareholders’ equity equals average total common

shareholders’ equity less average intangible assets and goodwill. Expense for amortization of intangibles and

average intangible assets are net of deferred tax liability, and calculated assuming a 35% tax rate. (3)

On a fully-taxable equivalent (FTE) basis assuming a 35% tax rate.

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Table of Contents

DISCUSSION OF RESULTS OF OPERATIONS

This section provides a review of financial performance from a consolidated perspective. It also includes a

Significant Items section that summarizes key issues important for a complete understanding of performance trends.

Key consolidated balance sheet and income statement trends are discussed. All earnings per share data is reported on

a diluted basis. For additional insight on financial performance, please read this section in conjunction with the

Business Segment Discussion.

Significant Items

Definition of Significant Items

From time-to-time, revenue, expenses, or taxes, are impacted by items judged by us to be outside of ordinary

banking activities and / or by items that, while they may be associated with ordinary banking activities, are so

unusually large that their outsized impact is believed by us at that time to be infrequent or short-term in nature. We

refer to such items as Significant Items. Most often, these Significant Items result from factors originating outside

the company; e.g., regulatory actions / assessments, windfall gains, changes in accounting principles, one-time tax

assessments / refunds, litigation actions, etc. In other cases they may result from our decisions associated with

significant corporate actions out of the ordinary course of business; e.g., merger / restructuring charges,

recapitalization actions, goodwill impairment, etc.

Even though certain revenue and expense items are naturally subject to more volatility than others due to

changes in market and economic environment conditions, as a general rule volatility alone does not define a

Significant Item. For example, changes in the provision for credit losses, gains / losses from investment activities,

asset valuation writedowns, etc., reflect ordinary banking activities and are, therefore, typically excluded from

consideration as a Significant Item.

We believe the disclosure of Significant Items provides a better understanding of our performance and trends

to ascertain which of such items, if any, to include or exclude from an analysis of our performance; i.e., within the

context of determining how that performance differed from expectations, as well as how, if at all, to adjust estimates

of future performance accordingly. To this end, we adopted a practice of listing Significant Items in our external

disclosure documents; e.g., earnings press releases, investor presentations, Forms 10-Q and 10-K.

Significant Items for any particular period are not intended to be a complete list of items that may materially

impact current or future period performance.

Significant Items Influencing Financial Performance Comparisons

Earnings comparisons among the three years ended December 31, 2013, 2012, and 2011 were impacted by a

number of Significant Items summarized below.

1. Pension Curtailment Gain. During the 2013 third quarter, a $33.9 million pension curtailment gain was

recorded in personnel costs. This resulted in a positive impact of $0.03 per common share for 2013.

2. Franchise Repositioning Related Expense. During 2013, $23.5 million of franchise repositioning related

expense was recorded. This resulted in a negative impact of $0.02 per common share for 2013.

3. State deferred tax asset valuation allowance adjustment. During 2012, a valuation allowance of $21.3 million (net of tax) was released for the portion of the deferred tax asset and state net operating loss

carryforwards expected to be realized. This resulted in a positive impact of $0.02 per common share for

2012. Additional information can be found in the Provision for Income Taxes section within this MD&A.

4. Bargain Purchase Gain. During 2012, an $11.2 million bargain purchase gain associated with the FDIC-

assisted Fidelity Bank acquisition was recorded in noninterest income. This resulted in a positive impact of

$0.01 per common share for 2012.

5. Litigation Reserve. $23.5 million and $17.0 million of additions to litigation reserves were recorded as

other noninterest expense in 2012 and 2011, respectively. This resulted in a negative impact of $0.02 per

common share in 2012 and $0.01 per common share in 2011.

6. Visa®. Prior to the Visa® IPO occurring in March 2008, Visa® was owned by its member banks, which included the Bank. As a result of this ownership, we received Class B shares of Visa® stock at the time of

the Visa® IPO. In 2009, we sold these Visa® stock shares, resulting in a $31.4 million pretax gain ($.04 per

common share). This amount was recorded to noninterest income. In 2011, a $6.4 million derivative loss

due to an increase in the liability associated with the sale of these shares was recorded to noninterest

income.

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Table of Contents

7. Early Extinguishment of Debt. The positive impact relating to the early extinguishment of debt on our

reported results was $9.7 million ($0.01 per common share) in 2011.

The following table reflects the earnings impact of the above-mentioned Significant Items for periods affected

by this Results of Operations discussion:

Table 3—Significant Items Influencing Earnings Performance Comparison (1) 2013 2012 2011 (dollar amounts in thousands, except per share amounts) After-tax EPS After-tax EPS After-tax EPS Net income —GAAP $ 638,741

$ 641,022

$ 542,613

Earnings per share, after-tax 0.72

0.71

0.59

Significant items—favorable (unfavorable) impact: Earnings (2) EPS (3)(4) Earnings (2) EPS (3)(4) Earnings (2) EPS (3)(4) Pension curtailment gain $ 33,926 $ 0.03 $ — $ — $ — $ — Franchise repositioning related expense (23,461 ) (0.02 ) — — — — State deferred tax asset valuation allowance

adjustment(4) — — 21,251 0.02 — — Bargain purchase gain — — 11,217 0.01 — — Litigation reserves addition — — (23,500 ) (0.02 ) (17,028 ) (0.01 ) Visa®-related derivative loss — — — — (6,385 ) — Gain on early extinguishment of debt — — — — 9,697 0.01

(1)See Significant Items Influencing Financial Performance discussion. (2) Pretax unless otherwise noted. (3)Based upon the annual average outstanding diluted common shares. (4)After-tax.

Net Interest Income / Average Balance Sheet

Our primary source of revenue is net interest income, which is the difference between interest income from

earning assets (primarily loans, securities, and direct financing leases), and interest expense of funding sources

(primarily interest-bearing deposits and borrowings). Earning asset balances and related funding sources, as well as

changes in the levels of interest rates, impact net interest income. The difference between the average yield on

earning assets and the average rate paid for interest-bearing liabilities is the net interest spread. Noninterest-bearing

sources of funds, such as demand deposits and shareholders’ equity, also support earning assets. The impact of the

noninterest-bearing sources of funds, often referred to as “free” funds, is captured in the net interest margin, which is

calculated as net interest income divided by average earning assets. Both the net interest margin and net interest

spread are presented on a fully-taxable equivalent basis, which means that tax-free interest income has been adjusted

to a pretax equivalent income, assuming a 35% tax rate.

29

Table of Contents

The following table shows changes in fully-taxable equivalent interest income, interest expense, and net

interest income due to volume and rate variances for major categories of earning assets and interest-bearing

liabilities:

Table 4—Change in Net Interest Income Due to Changes in Average Volume and Interest Rates(1)

2013 2012

Increase (Decrease) From

Previous Year Due To Increase (Decrease) From

Previous Year Due To Fully-taxable equivalent basis

(2) (dollar amounts in millions) Volume

Yield/ Rate Total Volume

Yield/ Rate Total

Loans and direct financing leases $ 66.1 $ (108.7 ) $ (42.6 ) $ 58.6 $ (105.6 ) $ (47.0 )

Investment securities (3.7 ) 2.0 (1.7 ) 1.9 (2.1 ) (0.2 ) Other earning assets (16.8 ) (1.7 ) (18.5 ) 24.2 (11.5 ) 12.7

Total interest income from earning assets 45.6 (108.4 ) (62.8 ) 84.7 (119.2 ) (34.5 )

Deposits 1.0 (46.9 ) (45.9 ) (3.0 ) (94.8 ) (97.8 ) Short-term borrowings (0.7 ) (0.6 ) (1.3 ) (1.2 ) (0.3 ) (1.5 ) Federal Home Loan Bank advances 0.8 (0.5 ) 0.3 0.8 (0.8 ) — Subordinated notes and other long-term debt,

including capital securities (8.3 ) (8.6 ) (16.9 ) (32.0 ) 10.0 (22.0 )

Total interest expense of interest-bearing liabilities (7.2 ) (56.6 ) (63.8 ) (35.4 ) (85.9 ) (121.3 )

Net interest income $ 52.8 $ (51.8 ) $ 1.0 $ 120.1 $ (33.3 ) $ 86.8

(1)

The change in interest rates due to both rate and volume has been allocated between the factors in proportion to the relationship of the absolute dollar amounts of the change in each

(2) Calculated assuming a 35% tax rate.

30

Table of Contents

Table 5—Consolidated Average Balance Sheet and Net Interest Margin Analysis Average Balances Fully-taxable equivalent basis (1) Change from 2012 Change from 2011 (dollar amounts in millions) 2013 Amount Percent 2012 Amount Percent 2011 Assets

Interest-bearing deposits in banks $ 70 $ (25 ) (26 )% $ 95 $ (38 ) (29 )% $ 133

Federal funds sold and securities

purchased under resale agreement — — — — (5 ) (100 ) 5 Loans held for sale 521 (566 ) (52 ) 1,087 799 277 288 Available-for-sale and other securities:

Taxable 6,383 (1,515 ) (19 ) 7,898 (473 ) (6 ) 8,371

Tax-exempt 563 136 32 427 (1 ) — 428

Total available-for-sale and other

securities 6,946 (1,379 ) (17 ) 8,325 (474 ) (5 ) 8,799 Trading account securities 80 13 19 67 (40 ) (37 ) 107 Held-to-maturity securities—taxable 2,155 1,230 133 925 550 147 375

Total securities 9,181 (136 ) (1 ) 9,317 36 — 9,281

Loans and leases: (3)

Commercial:

Commercial and

industrial 17,174 1,230 8 15,944 2,347 17 13,597 Commercial real estate:

Construction 580 (2 ) — 582 (10 ) (2 ) 592

Commercial 4,449 (749 ) (14 ) 5,198 (415 ) (7 ) 5,613

Commercial real estate 5,029 (751 ) (13 ) 5,780 (425 ) (7 ) 6,205

Total commercial 22,203 479 2 21,724 1,922 10 19,802

Consumer:

Automobile loans and

leases 5,679 1,153 25 4,526 (1,351 ) (23 ) 5,877 Home equity 8,310 (5 ) — 8,315 375 5 7,940 Residential mortgage 5,198 8 — 5,190 473 10 4,717 Other consumer 436 (19 ) (4 ) 455 (76 ) (14 ) 531

Total consumer 19,623 1,137 6 18,486 (579 ) (3 ) 19,065

Total loans and leases 41,826 1,616 4 40,210 1,343 3 38,867 Allowance for loan and lease losses (725 ) 151 (17 ) (876 ) 233 (21 ) (1,109 )

Net loans and leases 41,101 1,767 4 39,334 1,576 4 37,758

Total earning assets 51,598 889 2 50,709 2,135 4 48,574

Cash and due from banks 908 (182 ) (17 ) 1,090 (346 ) (24 ) 1,436 Intangible assets 557 (43 ) (7 ) 600 (45 ) (7 ) 645 All other assets 3,961 (190 ) (5 ) 4,151 (53 ) (1 ) 4,204

Total assets $ 56,299 $ 625 1 % $ 55,674 $ 1,924 4 % $ 53,750

Liabilities and Shareholders’ Equity

Deposits:

Demand deposits—

noninterest-bearing $ 12,871 $ 671 6 % $ 12,200 $ 3,547 41 % $ 8,653 Demand deposits—interest-

bearing 5,855 44 1 5,811 294 5 5,517

Total demand deposits 18,726 715 4 18,011 3,841 27 14,170 Money market deposits 15,675 1,774 13 13,901 579 4 13,322 Savings and other domestic

deposits 5,029 96 2 4,933 198 4 4,735 Core certificates of deposit 4,549 (1,672 ) (27 ) 6,221 (1,481 ) (19 ) 7,702

Total core deposits 43,979 913 2 43,066 3,137 8 39,929 Other domestic time deposits of

$250,000 or more 306 (20 ) (6 ) 326 (139 ) (30 ) 465 Brokered time deposits and

negotiable CDs 1,606 16 1 1,590 168 12 1,422 Deposits in foreign offices 346 (26 ) (7 ) 372 (17 ) (4 ) 389

Total deposits 46,237 883 2 45,354 3,149 7 42,205 Short-term borrowings 700 (610 ) (47 ) 1,310 (745 ) (36 ) 2,055 Federal Home Loan Bank advances 711 413 139 298 187 168 111 Subordinated notes and other long-term

debt 1,662 (314 ) (16 ) 1,976 (1,189 ) (38 ) 3,165

Total interest-bearing liabilities 36,439 (299 ) (1 ) 36,738 (2,145 ) (6 ) 38,883

All other liabilities 1,074 9 1 1,065 89 9 976 Shareholders’ equity 5,915 244 4 5,671 433 8 5,238

Total liabilities and shareholders’ equity $ 56,299 $ 625 1 % $ 55,674 $ 1,924 4 % $ 53,750

Continued

31

Table of Contents

Table 6—Consolidated Average Balance Sheet and Net Interest Margin Analysis (Continued) Fully-taxable equivalent basis (1) Interest Income / Expense Average Rate (2) (dollar amounts in millions) 2013 2012 2011 2013 2012 2011 Assets

Interest-bearing deposits in banks $ 0.1 $ 0.2 $ 0.1 0.15 % 0.21 % 0.11 % Federal funds sold and securities purchased under

resale agreement — — — — 0.29 0.09 Loans held for sale 18.9 36.8 12.3 3.63 3.38 4.27 Available-for-sale and other securities:

Taxable 148.6 184.3 208.0 2.33 2.33 2.48 Tax-exempt 25.7 17.7 18.3 4.56 4.14 4.28

Total available-for-sale and other securities 174.2 202.0 226.3 2.51 2.43 2.57 Trading account securities 0.4 0.9 1.5 0.44 1.27 1.37 Held-to-maturity securities—taxable 50.2 24.1 11.2 2.33 2.60 2.99

Total securities 224.8 226.9 239.0 2.45 2.43 2.57

Loans and leases: (3)

Commercial:

Commercial and industrial 643.7 639.5 585.6 3.75 4.01 4.31 Commercial real estate:

Construction 23.4 22.9 23.0 4.04 3.93 3.88 Commercial 182.6 208.6 222.7 4.11 4.01 3.97

Commercial real estate 206.1 231.5 245.7 4.10 4.00 3.96

Total commercial 849.8 871.0 831.3 3.83 4.01 4.20

Consumer:

Automobile loans and leases 221.5 214.1 293.2 3.90 4.73 4.99

Home equity 345.4 355.9 355.0 4.16 4.28 4.47 Residential mortgage 199.6 212.7 213.6 3.84 4.10 4.53 Other consumer 27.9 33.3 40.6 6.41 7.31 7.63

Total consumer 794.4 815.9 902.4 4.05 4.41 4.73

Total loans and leases 1,644.2 1,686.8 1,733.7 3.93 4.19 4.46

Total earning assets $ 1,888.0 $ 1,950.7 $ 1,985.1 3.66 % 3.85 % 4.09 %

Liabilities and Shareholders’ Equity Deposits:

Demand deposits—noninterest-bearing $ — $ — $ — — % — % — %

Demand deposits—interest-bearing 2.5 3.6 5.1 0.04 0.06 0.09

Total demand deposits 2.5 3.6 5.1 0.01 0.02 0.04 Money market deposits 38.8 40.2 54.3 0.25 0.29 0.41 Savings and other domestic deposits 13.3 18.9 32.7 0.26 0.38 0.69 Core certificates of deposit 50.5 85.0 150.0 1.11 1.37 1.95

Total core deposits 105.2 147.7 242.2 0.34 0.48 0.77 Other domestic time deposits of $250,000 or

more 1.4 2.1 4.5 0.47 0.66 0.97 Brokered time deposits and negotiable CDs 9.1 11.7 12.5 0.57 0.74 0.88 Deposits in foreign offices 0.5 0.7 0.9 0.15 0.18 0.23

Total deposits 116.2 162.2 260.1 0.35 0.49 0.78 Short-term borrowings 0.7 2.0 3.5 0.10 0.16 0.17 Federal Home Loan Bank advances 1.1 0.8 0.8 0.15 0.28 0.74 Subordinated notes and other long-term debt 38.0 54.7 76.7 2.29 2.77 2.42

Total interest-bearing liabilities 156.0 219.7 341.1 0.43 0.60 0.88

Net interest income $ 1,731.9 $ 1,730.9 $ 1,644.1

Net interest rate spread

3.23 3.25 3.21 Impact of noninterest-bearing funds on

margin

0.13 0.16 0.18

Net interest margin

3.36 % 3.41 % 3.38 %

(1)

FTE yields are calculated assuming a 35% tax rate. (2)

Loan and lease and deposit average rates include impact of applicable derivatives, non-deferrable fees, and amortized fees.

(3) For purposes of this analysis, nonaccrual loans are reflected in the average balances of loans.

32

Table of Contents

2013 vs. 2012

Fully-taxable equivalent net interest income for 2013 increased $1.0 million, or less than 1%, from 2012. This

reflected the impact of 4% loan growth, a 5 basis point decrease in the NIM to 3.36%, as well as a 7% reduction in

other earnings assets, the majority of which were loans held for sale. The primary items impacting the decrease in

the NIM were:

• 19 basis point negative impact from the mix and yield of earning assets primarily reflecting a

decrease in consumer loan yields.

• 3 basis point decrease in the benefit to the margin of non-interest bearing funds, reflecting lower interest rates on total interest bearing liabilities from the prior year.

Partially offset by:

• 14 basis point positive impact from the mix and yield of deposits reflecting the strategic focus on

changing the funding sources from higher rate time deposits to no-cost demand deposits and low-cost

money market deposits.

• 3 basis point positive impact from noncore funding primarily reflecting lower debt costs.

Average earning assets increased $0.9 billion, or 2%, from the prior year, driven by:

• $1.2 billion, or 8%, increase in average C&I loans and leases. This reflected the continued growth

within the middle market healthcare vertical, equipment finance, and dealer floorplan.

• $1.2 billion, or 25%, increase in average on balance sheet automobile loans, as the growth in

originations, while below industry levels, remained strong and our investments in the Northeast and

upper Midwest continued to grow as planned.

Partially offset by:

• $0.8 billion, or 13%, decrease in average CRE loans, as acceptable returns for new originations were

balanced against internal concentration limits and increased competition for projects sponsored by

high quality developers.

• $0.6 billion, or 52%, decrease in loans held-for-sale reflecting the impact of automobile loan

securitizations completed in 2012.

While there was minimal impact on the full-year average balance sheet, $1.9 billion of net investment

securities were purchased during the 2013 fourth quarter. Our investment securities portfolio is evaluated under

established asset/liability management objectives. Additionally, $0.6 billion of direct purchase municipal

instruments were reclassified on December 31, 2013 from C&I loans to available-for-sale securities.

Average noninterest bearing deposits increased $0.7 billion, or 6%, while average interest-bearing liabilities

decreased $0.3 billion, or 1%, from 2012, primarily reflecting:

• $1.7 billion, or 27%, decrease in average core certificates of deposit due to the strategic focus on

changing the funding sources to no-cost demand deposits and low-cost money market deposits.

• $0.6 billion, or 47%, decrease in short-term borrowings due to a focused effort to reduce

collateralized deposits.

Partially offset by:

• $1.8 billion, or 13%, increase in money market deposits reflecting the strategic focus on customer

growth and increased share of wallet among both consumer and commercial customers.

While there was minimal impact on the full-year average balance sheet, average subordinated notes and other

long-term debt reflect the issuance of $0.5 billion and $0.8 billion of long-term debt in the 2013 fourth quarter and

the 2013 third quarter, respectively.

33

Table of Contents

2012 vs. 2011

Fully-taxable equivalent net interest income for 2012 increased $86.8 million, or 5%, from 2011. This

reflected the favorable impact of a $2.1 billion, or 4%, increase in average earning assets, partially offset by a 3

basis point decline in the net interest margin.

The increase in average earning assets reflected:

• $1.9 billion, or 10%, increase in average commercial loans and leases.

• $0.8 billion, or 277% increase in average loans held for sale.

Partially offset by:

• $0.6 billion, or 3% decrease in average consumer loans including a $1.4 billion, or 23%, decrease in

automobile loans, reflecting $2.5 billion of automobile loans sold throughout the year.

The 3 basis point increase in the FTE net interest margin reflected:

• The positive impact of a 29 basis point decline in total deposit costs.

Partially offset by:

• 24 basis point declines in the yield on earnings assets and a 2 basis point decrease related to non-

deposit funding and other items.

The $3.1 billion, or 8%, increase in average total core deposits from the prior year reflected:

• $3.8 billion, or 27%, increase in total demand deposits.

• $0.6 billion, or 4%, increase in money market deposits.

Partially offset by:

• $1.5 billion, or 19%, decrease in core certificates of deposits.

Provision for Credit Losses

(This section should be read in conjunction with the Credit Risk section.)

The provision for credit losses is the expense necessary to maintain the ALLL and the AULC at levels

appropriate to absorb our estimate of inherent credit losses in the loan and lease portfolio and the portfolio of

unfunded loan commitments and letters-of-credit.

The provision for credit losses in 2013 was $90.0 million, down $57.3 million, or 39%, from 2012, reflecting

a $153.8 million, or 45%, decrease in NCOs. The provision for credit losses in 2013 was $98.6 million less than

total NCOs. In addition, as a result of a review of the existing consumer portfolios, 2013 also includes $22.8 million

of Chapter 7 bankruptcy-related losses that were not identified in the 2012 third quarter implementation of the

OCC’s regulatory guidance. (see Credit Quality discussion)

Noninterest Income

(This section should be read in conjunction with Significant Items 4 and 6.)

The following table reflects noninterest income for the past three years:

Table 7—Noninterest Income Twelve Months Ended December 31, Change from 2012 Change from 2011 (dollar amounts in thousands) 2013 Amount Percent 2012 Amount Percent 2011 Service charges on deposit accounts $ 271,802 $ 9,623 4 % $ 262,179 $ 18,672 8 % $ 243,507 Mortgage banking income 126,855 (64,237 ) (34 ) 191,092 107,684 129 83,408

Trust services 123,007 1,110 1 121,897 2,515 2 119,382 Electronic banking 92,591 10,301 13 82,290 (29,407 ) (26 ) 111,697 Insurance income 69,264 (2,055 ) (3 ) 71,319 1,849 3 69,470 Brokerage income 69,189 (3,037 ) (4 ) 72,226 (8,141 ) (10 ) 80,367 Bank owned life insurance income 56,419 377 1 56,042 (6,294 ) (10 ) 62,336 Capital markets fees 45,220 (2,940 ) (6 ) 48,160 11,620 32 36,540 Gain on sale of loans 18,171 (40,011 ) (69 ) 58,182 26,238 82 31,944 Securities gains (losses) 418 (4,351 ) (91 ) 4,769 8,450 N.R. (3,681 ) Other income 125,059 (4,642 ) (4 ) 129,701 (15,952 ) (11 ) 145,653

Total noninterest income $ 997,995 $ (99,862 ) (9 )% $ 1,097,857 $ 117,234 12 % $ 980,623

N.R.—Not relevant, as denominator of calculation is a loss in prior period compared with income in current period.

34

Table of Contents

2013 vs. 2012

Noninterest income decreased $99.9 million, or 9%, from the prior year, primarily reflecting:

• $64.2 million, or 34%, decrease in mortgage banking income primarily driven by 9% reduction in volume,

lower gain on sale margin, and a higher percentage of originations held on the balance sheet.

• $40.0 million, or 69%, decrease in gain on sale of loans as no auto loan securitizations occurred in 2013

compared to $2.3 billion of auto loan securitizations in 2012.

• $4.6 million, or 4%, decrease in other income as the prior year included an $11.2 million bargain purchase

gain associated with the FDIC-assisted Fidelity Bank acquisition partially offset by an increase in fees

associated with commercial loan activity.

• $4.4 million, or 91%, decrease in securities gains as the prior year had certain securities designated as

available-for-sale that were sold and the proceeds from those sales were reinvested into the held-to-

maturity portfolio.

Partially offset by:

• $10.3 million, or 13%, increase in electronic banking income due to continued consumer household

growth.

• $9.6 million, or 4%, increase in service charges on deposit accounts reflecting 8% consumer household and 6% commercial relationship growth and changing customer usage patterns. This more than offset the

approximately $28.0 million negative impact of the February 2013 implementation of a new posting order

for consumer transaction accounts.

2012 vs. 2011

Noninterest income increased $117.2 million, or 12%, from the prior year, primarily reflecting:

• $107.7 million, or 129%, increase in mortgage banking income. This primarily reflected a $78.6 million increase in origination and secondary marketing income. Additionally, we recorded a $14.3 million net

trading gain related to MSR hedging in 2012 compared to a net trading loss related to MSR hedging of

$11.9 million in 2011.

• $26.2 million, or 82%, increase in gain on sale of loans.

• $18.7 million, or 8%, increase in service charges on deposits, due to continued strong customer growth.

• $11.6 million, or 32%, increase in capital market fees primarily reflecting strong customer demand for

derivatives and other risk management products.

Partially offset by:

• $29.4 million, or 26%, decrease in electronic banking income related to implementing the lower debit card

interchange fee structure mandated in the Durbin Amendment of the Dodd-Frank Act.

• $16.0 million, or 11%, decrease in other income, primarily related to a decrease in automobile operating

lease income and partially offset by the bargain purchase gain from the Fidelity Bank acquisition.

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Noninterest Expense

(This section should be read in conjunction with Significant Items 1, 2, 5, and 7.)

The following table reflects noninterest expense for the past three years:

Table 8—Noninterest Expense Twelve Months Ended December 31, Change from 2012 Change from 2011 (dollar amounts in thousands) 2013 Amount Percent 2012 Amount Percent 2011

Personnel costs $ 1,001,637 $ 13,444 1 % $ 988,193$ 95,659 11 % $ 892,534 Outside data processing

and other services 199,547 9,292 5 190,255 1,081 1 189,174 Net occupancy 125,344 14,184 13 111,160 2,031 2 109,129 Equipment 106,793 3,846 4 102,947 10,403 11 92,544 Marketing 51,185 (13,078 ) (20 ) 64,263 (1,297 ) (2 ) 65,560 Deposit and other

insurance expense 50,161 (18,169 ) (27 ) 68,330 (9,362 ) (12 ) 77,692 Amortization of

intangibles 41,364 (5,185 ) (11 ) 46,549 (6,769 ) (13 ) 53,318 Professional services 40,587 (25,171 ) (38 ) 65,758 (2,858 ) (4 ) 68,616 Gain on early

extinguishment of debt — 798 (100 ) (798 ) 8,899 (92 ) (9,697 ) Other expense 141,385 (57,834 ) (29 ) 199,219 9,589 5 189,630

Total noninterest expense $ 1,758,003 $ (77,873 ) (4 )% $ 1,835,876 $ 107,376 6 % $ 1,728,500

Number of employees (average

full-time equivalent) 11,964 470 4 % 11,494 96 1 % 11,398

2013 vs. 2012

Noninterest expense decreased $77.9 million, or 4%, from 2012, and primarily reflected:

• $57.8 million, or 29%, decline in other expense, reflecting a reduction in litigation expense, mortgage

repurchases and warranty expense, OREO and foreclosure costs, and reduction in operating lease expense.

• $25.2 million, or 38%, decrease in professional services, reflecting a decrease in outside consultant

expenses and legal services, primarily collections.

• $18.2 million, or 27%, decrease in deposit and other insurance expense due to lower insurance premiums.

• $13.1 million, or 20%, decrease in marketing, primarily reflecting lower levels of advertising, and reduced

promotional offers.

• $5.2 million, or 11%, decrease due to the continued amortization of core deposit intangibles.

Partially offset by:

• $14.2 million, or 13%, increase in net occupancy expense, reflecting $12.1 million of franchise

repositioning expense related to branch consolidation and facilities optimization.

• $13.4 million, or 1%, increase in personnel costs, primarily reflecting the $38.8 million increase in salaries due to a 4% increase in the number of average full-time equivalent employees as employee count increased

mainly in technology and consumer areas and $6.7 million of franchise repositioning expense related to

branch consolidation and severance expenses. This was partially offset by the $33.9 million one-time, non-

cash gain related to the pension curtailment.

• $9.3 million, or 5%, increase in outside data processing as we continue to invest in technology supporting

our products, services, and our Continuous Improvement initiatives.

• $3.9 million, or 4%, increase in equipment, including $2.4 million of branch consolidation and facilities

optimization related expenses.

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2012 vs. 2011

Noninterest expense increased $107.4 million, or 6%, from 2011 and primarily reflected:

• $95.7 million, or 11%, increase in personnel costs, primarily reflecting an increase in bonuses,

commissions, and full-time equivalent employees, as well as increased salaries and benefits.

• $10.4 million, or 11%, increase in equipment, primarily reflecting the impact of depreciation from our in- store branch expansions and other technology investments.

• $9.3 million, or 5%, increase in other expense primarily reflecting higher litigation reserves, increased

sponsorships and public relations expense, and an increase in the provision for mortgage representations

and warranties.

Partially offset by:

• $9.4 million, or 12%, decline in deposit and other insurance expense.

Provision for Income Taxes

(This section should be read in conjunction with Significant Item 3, and Note 17 of the Notes to Consolidated

Financial Statements.)

2013 versus 2012

The provision for income taxes was $215.8 million for 2013 compared with a provision for income taxes of

$184.1 million in 2012. Both years included the benefits from tax-exempt income, tax-advantaged investments, and

general business credits. In 2013, a $6.0 million reduction in the 2013 provision for state income taxes, net of

federal, was recorded for the portion of state deferred tax assets and state net operating loss carryforwards that are

more likely than not to be realized, compared to a $21.3 million reduction in 2012. At December 31, 2013, we had a

net federal and state deferred tax asset of $137.6 million. Based on both positive and negative evidence and our level

of forecasted future taxable income, we determined no impairment existed to the net federal and state deferred tax

asset at December 31, 2013. For regulatory capital purposes, there was no disallowed net deferred tax asset at

December 31, 2013 and December 31, 2012.

We file income tax returns with the IRS and various state, city, and foreign jurisdictions. Federal income tax

audits have been completed for tax years through 2009. In the first quarter of 2013, the IRS began an examination of

our 2010 and 2011 consolidated federal income tax returns. We have appealed certain proposed adjustments

resulting from the IRS examination of our 2006, 2007, 2008, 2009, and 2010 tax returns. We believe the tax

positions taken related to such proposed adjustments are correct and supported by applicable statutes, regulations,

and judicial authority, and intend to vigorously defend them. It is possible the ultimate resolution of the proposed

adjustments, if unfavorable, may be material to the results of operations in the period it occurs. Nevertheless,

although no assurances can be given, we believe the resolution of these examinations will not, individually or in the

aggregate, have a material adverse impact on our consolidated financial position. Various state and other

jurisdictions remain open to examination, including Kentucky, Indiana, Michigan, Pennsylvania, West Virginia and

Illinois.

On September 13, 2013, the IRS released final tangible property regulations under Sections 162(a) and 263(a)

of the IRC and proposed regulations under Section 168 of the IRC. These regulations generally apply to taxable

years beginning on or after January 1, 2014 and will affect all taxpayers that acquire, produce, or improve tangible

property. Based upon preliminary analysis, we do not expect that the adoption of these regulations will have a

material impact on the Company’s Consolidated Financial Statements.

2012 versus 2011

The provision for income taxes was $184.1 million for 2012 compared with a provision of $164.6 million in

2011. Both years included the benefits from tax-exempt income, tax-advantaged investments, and general business

credits. In 2012, a $21.3 million reduction in the 2012 provision for state income taxes, net of federal, was recorded

for the portion of state deferred tax assets and state net operating loss carryforwards that are more likely than not to

be realized.

RISK MANAGEMENT AND CAPITAL

A comprehensive discussion of risk management and capital matters affecting us can be found in the Risk

Governance section included in Item 1A and the Regulatory Matters section of Item 1 of this Form 10-K.

Some of the more significant processes used to manage and control credit, market, liquidity, operational, and

compliance risks are described in the following paragraphs.

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Credit Risk

Credit risk is the risk of financial loss if a counterparty is not able to meet the agreed upon terms of the

financial obligation. The majority of our credit risk is associated with lending activities, as the acceptance and

management of credit risk is central to profitable lending. We also have credit risk associated with our AFS and

HTM securities portfolio (see Note 4 and Note 5 of the Notes to Consolidated Financial Statements). We engage

with other financial counterparties for a variety of purposes including investing, asset and liability management,

mortgage banking, and trading activities. While there is credit risk associated with derivative activity, we believe

this exposure is minimal.

We continue to focus on the identification, monitoring, and managing of our credit risk. In addition to the

traditional credit risk mitigation strategies of credit policies and processes, market risk management activities, and

portfolio diversification, we use additional quantitative measurement capabilities utilizing external data sources,

enhanced use of modeling technology, and internal stress testing processes. Our portfolio management resources

demonstrate our commitment to maintaining an aggregate moderate-to-low risk profile. In our efforts to continue to

identify risk mitigation techniques, we have focused on product design features, origination policies, and treatment

strategies for delinquent or stressed borrowers.

The maximum level of credit exposure to individual credit borrowers is limited by policy guidelines based on

the perceived risk of each borrower or related group of borrowers. All authority to grant commitments is delegated

through the independent credit administration function and is closely monitored and regularly updated.

Concentration risk is managed through limits on loan type, geography, industry, and loan quality factors. We focus

predominantly on extending credit to retail and commercial customers with existing or expandable relationships

within our primary banking markets, although we will consider lending opportunities outside our primary markets if

we believe the associated risks are acceptable and aligned with strategic initiatives. Although we offer a broad set of

products, we continue to develop new lending products and opportunities. Each of these new products and

opportunities goes through a rigorous development and approval process prior to implementation to ensure our

overall objective of maintaining an aggregate moderate-to-low risk portfolio profile.

The checks and balances in the credit process and the independence of the credit administration and risk

management functions are designed to appropriately assess and sanction the level of credit risk being accepted,

facilitate the early recognition of credit problems when they occur, and to provide for effective problem asset

management and resolution. For example, we do not extend additional credit to delinquent borrowers except in

certain circumstances that substantially improve our overall repayment or collateral coverage position. To that end,

we continue to expand resources in our risk management areas.

Although credit quality improved significantly in 2013, there remained a degree of economic stress that

continued to negatively impact us and the financial services industry as a whole. We continued to experience higher

than historical levels of delinquencies and NCOs in our residential secured Consumer loan portfolios. The

performance metrics associated with the residential mortgage, and home equity portfolios continued to be the most

significantly impacted portfolios as real estate prices remain lower than pre-2008 levels, and the unemployment rate

remains high.

Loan and Lease Credit Exposure Mix

At December 31, 2013, our loans and leases totaled $43.1 billion, representing a $2.4 billion, or 6%, increase

compared to $40.7 billion at December 31, 2012. The majority of the portfolio growth occurred in the Automobile

portfolio, with C&I and Residential showing modest growth. Huntington remained committed to the high quality

origination strategy in the automobile portfolio. The CRE portfolio declined as a result of continued runoff as

acceptable returns for new originations were balanced against internal concentration limits and increased

competition for projects sponsored by high quality developers.

Total commercial loans were $22.4 billion at December 31, 2013, and represented 52% of our total loan and

lease credit exposure. Our commercial loan portfolio is diversified along product type, customer size, and geography

within our footprint, and is comprised of the following (see Commercial Credit discussion):

C&I – C&I loans and leases are made to commercial customers for use in normal business operations to

finance working capital needs, equipment purchases, or other projects. The majority of these borrowers are

customers doing business within our geographic regions. C&I loans and leases are generally underwritten

individually and secured with the assets of the company and/or the personal guarantee of the business owners. The

financing of owner occupied facilities is considered a C&I loan even though there is improved real estate as

collateral. This treatment is a result of the credit decision process, which focuses on cash flow from operations of the

business to repay the debt. The operation, sale, rental, or refinancing of the real estate is not considered the primary

repayment source for these types of loans. As we have expanded our C&I portfolio, we have developed a series of

“verticals” to ensure that new products or lending types are embedded within a structured, centralized Commercial

Lending area with designated experienced credit officers.

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CRE – CRE loans consist of loans to developers and REITs supporting income-producing or for-sale

commercial real estate properties. We mitigate our risk on these loans by requiring collateral values that exceed the

loan amount and underwriting the loan with projected cash flow in excess of the debt service requirement. These

loans are made to finance properties such as apartment buildings, office and industrial buildings, and retail shopping

centers, and are repaid through cash flows related to the operation, sale, or refinance of the property.

Construction CRE – Construction CRE loans are loans to developers, companies, or individuals used for the

construction of a commercial or residential property for which repayment will be generated by the sale or permanent

financing of the property. Our construction CRE portfolio primarily consists of retail, multi family, office, and

warehouse project types. Generally, these loans are for construction projects that have been presold or preleased, or

have secured permanent financing, as well as loans to real estate companies with significant equity invested in each

project. These loans are underwritten and managed by a specialized real estate lending group that actively monitors

the construction phase and manages the loan disbursements according to the predetermined construction schedule.

Total consumer loans and leases were $20.7 billion at December 31, 2013, and represented 48% of our total

loan and lease credit exposure. The consumer portfolio is comprised primarily of automobile, home equity loans and

lines-of-credit, and residential mortgages (see Consumer Credit discussion).

Automobile – Automobile loans are primarily comprised of loans made through automotive dealerships and

include exposure in selected states outside of our primary banking markets. The exposure outside of our primary

banking markets represents 19% of the total exposure, with no individual state representing more than 5%.

Applications are underwritten utilizing an automated underwriting system that applies consistent policies and

processes across the portfolio.

Home equity – Home equity lending includes both home equity loans and lines-of-credit. This type of lending,

which is secured by a first-lien or junior-lien on the borrower’s residence, allows customers to borrow against the

equity in their home or refinance existing mortgage debt. Products include closed-end loans which are generally

fixed-rate with principal and interest payments, and variable-rate, interest-only lines-of-credit which do not require

payment of principal during the 10-year revolving period. The home equity line of credit product converts to a 20

year amortizing structure at the end of the revolving period. Applications are underwritten centrally in conjunction

with an automated underwriting system. The home equity underwriting criteria is based on minimum credit scores,

debt-to-income ratios, and LTV ratios, with current collateral valuations.

Residential mortgage – Residential mortgage loans represent loans to consumers for the purchase or refinance

of a residence. These loans are generally financed over a 15-year to 30-year term, and in most cases, are extended to

borrowers to finance their primary residence. Applications are underwritten centrally using consistent credit policies

and processes. All residential mortgage loan decisions utilize a full appraisal for collateral valuation. Huntington has

not originated residential mortgages that allow negative amortization or allow the borrower multiple payment

options.

Other consumer loans/leases – Primarily consists of consumer loans not secured by real estate, including

personal unsecured loans. We introduced a consumer credit card product during 2013, utilizing a centralized

underwriting system and focusing on existing Huntington customers.

The table below provides the composition of our total loan and lease portfolio:

Table 9—Loan and Lease Portfolio Composition At December 31, (dollar amounts in millions) 2013 2012 2011 2010 2009 Commercial:(1)

Commercial and

industrial $ 17,594 41 % $ 16,971 42 % $ 14,699 38 % $ 13,063 34 % $ 12,888 35 % Commercial real

estate:

Construction 557 1 648 2 580 1 650 2 1,469 4

Commercial 4,293 10 4,751 12 5,246 13 6,001 16 6,220 17

Total commercial real

estate 4,850 11 5,399 14 5,826 14 6,651 18 7,689 21

Total commercial 22,444 52 22,370 56 20,525 52 19,714 52 20,577 56

Consumer:

Automobile

(2) 6,639 15 4,634 11 4,458 11 5,614 15 3,390 9 Home equity 8,336 19 8,335 20 8,215 21 7,713 20 7,563 21 Residential mortgage 5,321 12 4,970 12 5,228 13 4,500 12 4,510 12 Other consumer 380 2 419 1 498 3 566 1 751 2

Total consumer 20,676 48 18,358 44 18,399 48 18,393 48 16,214 44

Total loans and leases $ 43,120 100 % $ 40,728 100 % $ 38,924 100 % $ 38,107 100 % $ 36,791 100 %

(1) As defined by regulatory guidance, there were no commercial loans outstanding that would be considered a concentration of lending to a particular industry or group of industries.

(2) 2011 included a decrease of $1.3 billion resulting from the transfer of automobile loans to loans held for a sale reflecting an automobile securitization transaction completed in 2012. 2010 included an increase of $0.5 billion

resulting from the adoption of a new accounting standard to consolidate a previously off-balance sheet

automobile loan securitization transaction.

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As shown in the table above, our loan portfolio is diversified by consumer and commercial credit. We manage

the credit exposure via a corporate level credit concentration policy. The policy designates specific loan types,

collateral types, and loan structures to be formally tracked and assigned limits as a percentage of capital. C&I

lending by segment, specific limits for CRE primary project types, loans secured by residential real estate, shared

national credit exposure, unsecured lending, and designated high risk loan definitions represent examples of

specifically tracked components of our concentration management process. Our concentration management process

is approved by our board level Risk Oversight Committee and is one of the strategies utilized to ensure a high

quality, well diversified portfolio that is consistent with our overall objective of maintaining an aggregate moderate-

to-low risk profile.

The table below provides our total loan and lease portfolio segregated by the primary type of collateral

securing the loan or lease:

Table 10—Total Loan and Lease Portfolio by Collateral Type At December 31, (dollar amounts in millions) 2013 2012 2011 2010 2009 Secured loans:

Real estate—

commercial $ 8,622 20 % $ 9,128 22 % $ 9,557 25 % $ 10,389 27 % $ 11,286 31 % Real estate—

consumer 13,657 32 13,305 33 13,444 35 12,214 32 12,176 33 Vehicles 8,989 21 6,659 16 6,021 15 7,134 19 4,600 13 Receivables/Inventory 5,534 13 5,178 13 4,450 11 3,763 10 3,582 10 Machinery/Equipment 2,738 6 2,749 7 1,994 5 1,766 5 1,772 5 Securities/Deposits 786 2 826 2 800 2 734 2 1,145 3 Other 1,016 2 1,090 3 1,018 3 990 2 1,124 2

Total secured loans and

leases 41,342 96 38,935 96 37,284 96 36,990 97 35,685 97 Unsecured loans and leases 1,778 4 1,793 4 1,640 4 1,117 3 1,106 3

Total loans and leases $ 43,120 100 % $ 40,728 100 % $ 38,924 100 % $ 38,107 100 % $ 36,791 100 %

Commercial Credit

The primary factors considered in commercial credit approvals are the financial strength of the borrower,

assessment of the borrower’s management capabilities, cash flows from operations, industry sector trends, type and

sufficiency of collateral, type of exposure, transaction structure, and the general economic outlook. While these are

the primary factors considered, there are a number of other factors that may be considered in the decision process.

We utilize a centralized preview and senior loan approval committee, led by our chief credit officer. The risk rating

(see next paragraph) and complexity of the credit determines the threshold for approval of the senior loan committee

with a minimum credit exposure of $10.0 million. For loans not requiring senior loan committee approval, with the

exception of small business loans, credit officers who understand each local region and are experienced in the

industries and loan structures of the requested credit exposure are involved in all loan decisions and have the

primary credit authority. For small business loans, we utilize a centralized loan approval process for standard

products and structures. In this centralized decision environment, certain individuals who understand each local

region may make credit-extension decisions to preserve our commitment to the communities we operate in. In

addition to disciplined and consistent judgmental factors, a sophisticated credit scoring process is used as a primary

evaluation tool in the determination of approving a loan within the centralized loan approval process.

In commercial lending, on-going credit management is dependent on the type and nature of the loan. We

monitor all significant exposures on an on-going basis. All commercial credit extensions are assigned internal risk

ratings reflecting the borrower’s PD and LGD. This two-dimensional rating methodology provides granularity in the

portfolio management process. The PD is rated and applied at the borrower level. The LGD is rated and applied

based on the specific type of credit extension and the quality and lien position associated with the underlying

collateral. The internal risk ratings are assessed at origination and updated at each periodic

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monitoring event. There is also extensive macro portfolio management analysis on an on-going basis. We

continually review and adjust our risk-rating criteria based on actual experience, which provides us with the current

risk level in the portfolio and is the basis for determining an appropriate allowance for credit losses (ACL) amount

for the commercial portfolio. A centralized portfolio management team monitors and reports on the performance of

the entire commercial portfolio, including small business loans, to provide consistent oversight.

In addition to the initial credit analysis conducted during the approval process, our Credit Review group

performs testing to provide an independent review and assessment of the quality and / or risk of new loan

originations. This group is part of our Risk Management area, and conducts portfolio reviews on a risk-based cycle

to evaluate individual loans, validate risk ratings, as well as test the consistency of credit processes.

Our standardized loan grading system considers many components that directly correlate to loan quality and

likelihood of repayment, one of which is guarantor support. On an annual basis, or more frequently if warranted, we

consider, among other things, the guarantor’s reputation and creditworthiness, along with various key financial

metrics such as liquidity and net worth, assuming such information is available. Our assessment of the guarantor’s

credit strength, or lack thereof, is reflected in our risk ratings for such loans, which is directly tied to, and an integral

component of, our ACL methodology. When a loan goes to impaired status, viable guarantor support is considered

in the determination of a credit loss.

If our assessment of the guarantor’s credit strength yields an inherent capacity to perform, we will seek

repayment from the guarantor as part of the collection process and have done so successfully. However, we do not

formally track the repayment success from guarantors.

Substantially all loans categorized as Classified (see Note 3 of Notes to Consolidated Financial Statements)

are managed by our Special Assets Department (SAD). The SAD group is a specialized group of credit professionals

that handle the day-to-day management of workouts, commercial recoveries, and problem loan sales. Its

responsibilities include developing and implementing action plans, assessing risk ratings, and determining the

appropriateness of the allowance, the accrual status, and the ultimate collectability of the Classified loan portfolio.

C&I PORTFOLIO

The C&I portfolio is comprised of loans to businesses where the source of repayment is associated with the

on-going operations of the business. Generally, the loans are secured with the financing of the borrower’s assets,

such as equipment, accounts receivable, and/or inventory. In many cases, the loans are secured by real estate,

although the operation, sale, or refinancing of the real estate is not a primary source of repayment for the loan. For

loans secured by real estate, appropriate appraisals are obtained at origination and updated on an as needed basis in

compliance with regulatory requirements.

There were no commercial loan segments considered an industry or geographic concentration of lending.

Currently, higher-risk segments of the C&I portfolio include loans to borrowers supporting the home building

industry, contractors, and leveraged lending. We manage the risks inherent in this portfolio through origination

policies, a defined loan concentration policy with established limits, on-going loan level reviews and portfolio level

reviews, recourse requirements, and continuous portfolio risk management activities. Our origination policies for

this portfolio include loan product-type specific policies such as LTV and debt service coverage ratios, as

applicable.

The C&I portfolio continues to have strong origination activity as evidenced by the growth over the past 12

months. The credit quality of the portfolio continues to improve as we maintain focus on high quality originations.

Problem loans have trended downward, reflecting a combination of proactive risk identification and effective

workout strategies implemented by the SAD. We continue to maintain a proactive approach to identifying borrowers

that may be facing financial difficulty in order to maximize the potential solutions.

CRE PORTFOLIO

We manage the risks inherent in this portfolio specific to CRE lending, focusing on the quality of the

developer and the specifics associated with each project. Generally, we: (1) limit our loans to 80% of the appraised

value of the commercial real estate at origination, (2) require net operating cash flows to be 125% of required

interest and principal payments, and (3) if the commercial real estate is nonowner occupied, require that at least 50%

of the space of the project be preleased. We actively monitor both geographic and project-type concentrations and

performance metrics of all CRE loan types, with a focus on loans identified as higher risk based on the risk rating

methodology. Both macro-level and loan-level stress-test scenarios based on existing and forecast market conditions

are part of the on-going portfolio management process for the CRE portfolio.

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Dedicated real estate professionals originated the majority of the portfolio, with the remainder obtained from

prior bank acquisitions. Appraisals are obtained from approved vendors, and are reviewed by an internal appraisal

review group comprised of certified appraisers to ensure the quality of the valuation used in the underwriting

process. The portfolio is diversified by project type and loan size, and this diversification represents a significant

portion of the credit risk management strategies employed for this portfolio. Subsequent to the origination of the

loan, the Credit Review group performs testing to provide an independent review and assessment of the quality of

the underwriting and/or risk of new loan originations.

Appraisal values are obtained in conjunction with all originations and renewals, and on an as needed basis, in

compliance with regulatory requirements. We continue to perform on-going portfolio level reviews within the CRE

portfolio. These reviews generate action plans based on occupancy levels or sales volume associated with the

projects being reviewed. Property values are updated using appraisals on a regular basis to ensure appropriate

decisions regarding the on-going management of the portfolio reflect the changing market conditions. This highly

individualized process requires working closely with all of our borrowers, as well as an in-depth knowledge of CRE

project lending and the market environment.

Consumer Credit

Consumer credit approvals are based on, among other factors, the financial strength and payment history of

the borrower, type of exposure, and the transaction structure. Consumer credit decisions are generally made in a

centralized environment utilizing decision models. Importantly, certain individuals who understand each local

region have the authority to make credit extension decisions to preserve our focus on the local communities we

operate in. Each credit extension is assigned a specific PD and LGD. The PD is generally based on the borrower’s

most recent credit bureau score (FICO), which we update quarterly, while the LGD is related to the type of collateral

and the LTV ratio associated with the credit extension.

In consumer lending, credit risk is managed from a segment (i.e., loan type, collateral position, geography,

etc.) and vintage performance analysis. All portfolio segments are continuously monitored for changes in

delinquency trends and other asset quality indicators. We make extensive use of portfolio assessment models to

continuously monitor the quality of the portfolio, which may result in changes to future origination strategies. The

on-going analysis and review process results in a determination of an appropriate ALLL amount for our consumer

loan portfolio. The independent risk management group has a consumer process review component to ensure the

effectiveness and efficiency of the consumer credit processes.

Collection action is initiated as needed through a centrally managed collection and recovery function. The

collection group employs a series of collection methodologies designed to maintain a high level of effectiveness

while maximizing efficiency. In addition to the consumer loan portfolio, the collection group is responsible for

collection activity on all sold and securitized consumer loans and leases. Collection practices include a single

contact point for the majority of the residential real estate secured portfolios.

During a 2013 review of our consumer portfolios, we identified additional loans associated with borrowers

who had filed Chapter 7 bankruptcy and had not reaffirmed their debt, thus meeting the definition of collateral

dependent per OCC regulatory guidance. These loans were not identified in the 2012 third quarter implementation of

the OCC’s regulatory guidance. The bankruptcy court’s discharge of the borrower’s debt is considered a concession

when the discharged debt is not reaffirmed, and as such, the loan is placed on nonaccrual status, and written down to

collateral value, less anticipated selling costs. As a result of the review of our existing consumer portfolios,

additional NCOs of $22.8 million were recorded in 2013. The majority of the NCO impact was in the home equity

portfolio and relates to junior-lien loans that meet the regulatory guidance.

AUTOMOBILE PORTFOLIO

Our strategy in the automobile portfolio continued to focus on high quality borrowers as measured by both

FICO and internal custom scores, combined with appropriate LTVs, terms, and profitability. Our strategy and

operational capabilities allow us to appropriately manage the origination quality across the entire portfolio, including

our newer markets. Although increased origination volume and entering new markets can be associated with

increased risk levels, we believe our disciplined strategy and operational processes significantly mitigate these risks.

We have continued to consistently execute our value proposition and take advantage of available market

opportunities. Importantly, we have maintained our high credit quality standard while expanding the portfolio. We

have developed and implemented a successful loan securitization strategy to ensure we remain within our

established portfolio concentration limits.

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RESIDENTIAL REAL ESTATE SECURED PORTFOLIOS

The properties securing our residential mortgage and home equity portfolios are primarily located within our

geographic footprint. While home prices have clearly rebounded from the 2009-2010 levels, they remain below the

peak, causing the performance in these portfolios to remain weaker than historical levels. The residential-secured

portfolio originations continue to be of high quality, with the majority of the negative credit impact coming from

loans originated in 2006 and earlier. We continue to evaluate all of our policies and processes associated with

managing these portfolios. Our portfolio management strategies associated with our Home Savers group are

consolidated in one location under common management. This structure allows us to focus on effectively helping

our customers with appropriate solutions for their specific circumstances.

Table 11—Selected Home Equity and Residential Mortgage Portfolio Data Home Equity Residential Mortgage

Secured by first-lien Secured by junior-lien (dollar amounts in millions) 12/31/13 12/31/12 12/31/13 12/31/12 12/31/13 12/31/12 Ending balance $ 4,842 $ 4,380 $ 3,494 $ 3,955 $ 5,321 $ 4,970 Portfolio weighted average LTV ratio(1) 71 % 71 % 81 % 81 % 74 % 76 % Portfolio weighted average FICO score(2) 758 755 741 741 743 738

Home Equity

Residential

Mortgage (3)

Secured by first-lien Secured by junior-lien Year Ended December 31, 2013 2012 2013 2012 2013 2012 Originations $ 1,745 $ 1,665 $ 529 $ 559 $ 1,625 $ 1,019 Origination weighted average LTV ratio(1) 69 % 72 % 81 % 80 % 79 % 84 % Origination weighted average FICO score(2) 771 771 756 756 757 754

(1) The LTV ratios for home equity loans and home equity lines-of-credit are cumulative and reflect the balance of any senior loans. LTV ratios reflect collateral values at the time of loan origination.

(2) Portfolio weighted average FICO scores reflect currently updated customer credit scores whereas origination weighted average FICO scores reflect the customer credit scores at the time of loan origination.

(3) Represents only owned-portfolio originations.

Home Equity Portfolio

Our home equity portfolio (loans and lines-of-credit) consists of both first-lien and junior-lien mortgage loans

with underwriting criteria based on minimum credit scores, debt-to-income ratios, and LTV ratios. We offer closed-

end home equity loans which are generally fixed-rate with principal and interest payments, and variable-rate

interest-only home equity lines-of-credit which do not require payment of principal during the 10-year revolving

period of the line-of-credit. Applications are underwritten centrally in conjunction with an automated underwriting

system.

Given the low interest rate environment over the past several years, many borrowers have utilized the line-of-

credit home equity product as the primary source of financing their home versus residential mortgages. The

proportion of the home equity portfolio secured by a first-lien has increased significantly over the past three years,

positively impacting the portfolio’s risk profile. At December 31, 2013, $4.8 billion or 58% of our total home equity

portfolio was secured by first-lien mortgages compared to 52% in the prior year. The first-lien position, combined

with continued high average FICO scores, significantly reduces the credit risk associated with these loans.

We focus on high quality borrowers primarily located within our footprint. Further, we actively manage the

extension of credit and the amount of credit extended through a combination of criteria including financial position,

debt-to-income policies, and LTV policy limits. The combination of high quality borrowers as measured by financial

condition and FICO score, as well as the concentration of first-lien position loans, provides a high degree of

confidence regarding the performance of the 2009-2013 originations. Because we focus on developing complete

relationships with our customers, many of our home equity borrowers utilize other products and services. Also, the

majority of our home equity line-of-credit borrowers consistently pay in excess of the required minimum payment

each month.

We believe we have underwritten credit conservatively within this portfolio. However, home price volatility

has decreased the value of the collateral for this portfolio and has caused a portion of the portfolio to have an LTV

greater than 100%. These higher LTV ratios are directly correlated with borrower payment patterns and are a focus

of our Home Saver group.

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Real estate market values at the time of origination directly affect the amount of credit extended and, in the

event of default, subsequent changes in these values impact the severity of losses. We obtain a property valuation for

every loan or line-of-credit as part of the origination process, and the valuation is reviewed by a real estate

professional in conjunction with the credit underwriting process. The type of property valuation obtained is based on

credit parameters, and a majority of these valuations are based on complete walkthrough appraisals. We believe an

AVM estimate with a signed property inspection is an appropriate valuation source for a portion of our home equity

lending activities. This valuation policy, along with our other credit policies, are re-evaluated on an on-going basis

with the intent of ensuring complete independence in the requesting and reviewing of real estate valuations

associated with loan decisions. We update values as appropriate, and in compliance with applicable regulations,

particularly for loans identified as higher risk. Loans are identified as higher risk based on performance indicators

and the updated values are utilized to facilitate our portfolio management processes, as well as our workout and loss

mitigation functions.

We continue to make origination policy adjustments based on our assessment of an appropriate risk profile

and industry actions. In addition to origination policy adjustments, we take actions, as necessary, to manage the risk

profile of this portfolio. We believe our Credit Risk Management systems allow for effective portfolio analysis and

segmentation to identify the highest risk exposures in the portfolio. Our disclosures regarding lien position and

FICO distribution are examples of segmentation analysis.

Although the collateral value assessment is an important component of the overall credit risk analysis, there

are very few instances of available equity in junior-lien default situations. Further, effective in 2012, any junior-lien

loan associated with a nonaccruing first-lien loan is also placed on nonaccrual status.

Within the home equity line-of-credit portfolio, the standard product is a 10-year interest-only draw period

with a 20-year fully amortizing term at the end of the draw period. Prior to 2007, the standard product was a 10-year

draw period with a balloon payment, while subsequent originations convert to a 20-year amortizing loan structure.

After the 10-year draw period, the borrower must reapply to extend the existing structure or begin repaying the debt

in a traditional term structure.

The principal and interest payment associated with the term structure will be higher than the interest-only

payment, resulting in “maturity” risk. Our maturity risk can be segregated into two distinct segments: (1) home

equity lines-of-credit underwritten with a balloon payment at maturity and (2) home equity lines-of-credit with an

automatic conversion to a 20-year amortizing loan. We manage this risk based on both the actual maturity date of

the line-of-credit structure and at the end of the 10-year draw period. This maturity risk is embedded in the portfolio

which we address with proactive contact strategies beginning one year prior to maturity. In certain circumstances,

our Home Saver group is able to provide payment and structure relief to borrowers experiencing significant financial

hardship associated with the payment adjustment.

The table below summarizes our home equity line-of-credit portfolio by maturity date:

Table 12—Maturity Schedule of Home Equity Line-of-Credit Portfolio December 31, 2013

(dollar amounts in millions) 1 Year or Less 1 to 2 years 2 to 3 years 3 to 4 years More than

4 years Total Secured by first-lien $ 52 $ 29 $ — $ — $ 2,383 $ 2,464 Secured by junior-lien 229 216 130 112 2,301 2,988

Total home equity line-of-credit $ 281 $ 245 $ 130 $ 112 $ 4,684 $ 5,452

The amounts in the above table maturing in four years or less primarily consist of balloon payment structures

and represent the most significant maturity risk. The amounts maturing in more than four years primarily consist of

exposure with a 20-year amortization period after the 10-year draw period.

Historically, less than 30% of our home equity lines-of-credit that are one year or less from maturity actually

reach the maturity date, and we anticipate this percentage will decline in future periods as our proactive approach to

managing maturity risk continues to evolve.

Residential Mortgages Portfolio

We focus on higher quality borrowers and underwrite all applications centrally. We do not originate

residential mortgages that allow negative amortization or allow the borrower multiple payment options. We have

incorporated regulatory requirements and guidance into our underwriting process, and will continue to evaluate the

impact of the QM requirements impact on the industry.

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All residential mortgages are originated based on a completed full appraisal during the credit underwriting

process. We update values on a regular basis in compliance with applicable regulations to facilitate our portfolio

management, as well as our workout and loss mitigation functions.

Generally, our practice is to sell a significant portion of our fixed-rate originations in the secondary market. As

such, at December 31, 2013, 46% of our total residential mortgage portfolio were ARMs. These ARMs primarily

consist of a fixed-rate of interest for the first 3 to 5 years, and then adjust annually. At December 31, 2013, ARM

loans that were expected to have rates reset through 2016 totaled $1.5 billion. These loans scheduled to reset are

primarily associated with loans originated subsequent to 2007, and as such, are not subject to the most significant

declines in underlying property value. Given the quality of our borrowers, the relatively low current interest rates,

and the results of our continued analysis (including possible impacts of changes in interest rates), we believe that we

have a relatively limited exposure to ARM reset risk. Nonetheless, we have taken actions to mitigate our risk

exposure. We initiate borrower contact at least six months prior to the interest rate resetting and have been

successful in converting many ARMs to fixed-rate loans through this process. Given the relatively low current

interest rates, many fixed-rate products currently offer a better interest rate to our ARM borrowers. We are subject to

repurchase risk associated with residential mortgage loans sold in the secondary market. An appropriate level of

reserve for representations and warranties related to residential mortgage loans sold has been established to address

this repurchase risk inherent in the portfolio (see Operational Risk discussion).

Several government programs continued to impact the residential mortgage portfolio, including various

refinance programs such as HAMP and HARP, which positively affected the availability of credit for the industry.

During the year ended December 31, 2013, we closed $600 million in HARP residential mortgages and $6.0 million

in HAMP residential mortgages. The HARP residential mortgage loans are considered current and are either part of

our residential mortgage portfolio or serviced for others. The HAMP refinancings are associated with residential

mortgages that are serviced for others.

Credit Quality

(This section should be read in conjunction with Note 3 of the Notes to Consolidated Financial Statements.)

We believe the most meaningful way to assess overall credit quality performance is through an analysis of

credit quality performance ratios. This approach forms the basis of most of the discussion in the sections

immediately following: NPAs and NALs, TDRs, ACL, and NCOs. In addition, we utilize delinquency rates, risk

distribution and migration patterns, and product segmentation in the analysis of our credit quality performance.

Our overall credit quality performance returned to normalized, pre-recession levels. NALs declined 21% to

$322.1 million, compared to December 31, 2012, as both the C&I and CRE portfolio segments showed declines.

NCOs decreased 45% compared to the prior year, as a result of significant declines in the C&I and CRE portfolios

combined with significant recovery activity, and net reductions in the Residential and Home Equity portfolios. The

Home Equity portfolio in particular was significantly impacted by the implementation of Chapter 7 bankruptcy

regulatory accounting guidance, with an additional impact in 2013. Commercial classified loans declined, reflecting

the continued improvement across the portfolio. The ACL to total loans ratio declined to 1.65%, but our coverage

ratios as demonstrated by the ACL to NAL ratio of 221% remained strong.

NPAs, NALs, and TDRs

(This section should be read in conjunction with Note 3 of the Notes to Consolidated Financial Statements.)

NPAs and NALs

NPAs consist of (1) NALs, which represent loans and leases no longer accruing interest, (2) impaired loans

held for sale, (3) OREO properties, and (4) other NPAs. Any loan in our portfolio may be placed on nonaccrual

status prior to the policies described below when collection of principal or interest is in doubt. Also, when a

borrower with discharged non-reaffirmed debt in a Chapter 7 bankruptcy is identified and the loan is determined to

be collateral dependent, the consumer loan is placed on nonaccrual status.

C&I and CRE loans are placed on nonaccrual status at 90-days past due, or when repayment of principal and

interest is in doubt. With the exception of residential mortgage loans guaranteed by government organizations which

continue to accrue interest, residential mortgage loans are placed on nonaccrual status at 150-days past due. First-

lien home equity loans are placed on nonaccrual status at 150-days past due. Junior-lien home equity loans are

placed on nonaccrual status at the earlier of 120-days past due or when the related first-lien loan has been identified

as nonaccrual. Automobile and other consumer loans are generally charged-off when the loan is 120-days past due.

When loans are placed on nonaccrual, accrued interest income is reversed with current year accruals charged

to earnings and prior year amounts generally charged-off as a credit loss. When, in our judgment, the borrower’s

ability to make required interest and principal payments has resumed and collectability is no longer in doubt, the

loan or lease is returned to accrual status.

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The table reflects period-end NALs and NPAs detail for each of the last five years:

Table 13—Nonaccrual Loans and Leases and Nonperforming Assets

At December 31, (dollar amounts in thousands) 2013 2012 2011 2010 2009 Nonaccrual loans and leases:

Commercial and industrial $ 56,615 $ 90,705 $ 201,846 $ 346,720 $ 578,414 Commercial real estate 73,417 127,128 229,889 363,692 935,812 Automobile 6,303 7,823 — — — Residential mortgages 119,532 122,452 68,658 45,010 362,630 Home equity 66,189 59,525 40,687 22,526 40,122

Total nonaccrual loans and leases(1) 322,056 407,633 541,080 777,948 1,916,978 Other real estate owned, net

Residential 23,447 21,378 20,330 31,649 71,427 Commercial 4,217 6,719 18,094 35,155 68,717

Total other real estate, net 27,664 28,097 38,424 66,804 140,144 Impaired loans held for sale(2) — — — — 969 Other nonperforming assets(3) 2,440 10,045 10,772 — —

Total nonperforming assets $ 352,160 $ 445,775 $ 590,276 $ 844,752 $ 2,058,091

Nonaccrual loans as a % of total loans and

leases 0.75 % 1.00 % 1.39 % 2.04 % 5.21 % Nonperforming assets ratio(4) 0.82 1.09 1.51 2.21 5.57 Allowance for loan and lease losses as % of:

Nonaccrual loans and leases 201 % 189 % 178 % 161 % 77 % Nonperforming assets 184 173 163 148 72

Allowance for credit losses as % of:

Nonaccrual loans and leases 221 % 199 % 187 % 166 % 80 % Nonperforming assets 202 182 172 153 74

(1)

December 31, 2013 and 2012, includes $75.5 and $60.1 million, respectively, of Chapter 7 bankruptcy NALs. (2)

Represents impaired loans obtained from the Sky Financial acquisition. Held for sale loans are carried at the lower of cost or fair value less costs to sell.

(3) Other nonperforming assets includes certain impaired investment securities.

(4) This ratio is calculated as nonperforming assets divided by the sum of loans and leases, impaired loans held for

sale, net other real estate owned, and other nonperforming assets.

The $93.6 million, or 21%, decline in NPAs compared with December 31, 2012, primarily reflected:

• $53.7 million, or 42%, decline in CRE NALs, reflecting both NCO and problem credit resolutions,

including borrower payments and payoffs partially resulting from successful workout strategies

implemented by our commercial loan workout group.

• $34.1 million, or 38%, decline in C&I NALs, reflecting both NCO and problem credit resolutions, including payoffs partially resulting from successful workout strategies implemented by our commercial

loan workout group. The decline was associated with loans throughout our footprint, with no specific

industry concentration.

• $7.6 million, or 76%, decrease in other NPAs, reflecting the redemption by the issuer of a non-performing

security.

Partially offset by:

• $6.7 million, or 11%, increase in home equity NALs, a function of the economic stresses still impacting a portion of our borrowers in the Home Equity portfolio.

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Of the $130.0 million of CRE and C&I-related NALs at December 31, 2013, $50.3 million, or 39%,

represented loans that were less than 30 days past due, demonstrating our continued commitment to proactive credit

risk management.

As discussed previously, residential mortgages are placed on nonaccrual status at 150-days past due, with the

exception of residential mortgages guaranteed by government organizations which continue to accrue interest. First-

lien home equity loans are placed on nonaccrual status at 150-days past due. Junior-lien home equity loans are

placed on nonaccrual status at the earlier of 120-days past due or when the related first-lien loan has been identified

as nonaccrual.

The following table reflects period-end accruing loans and leases 90 days or more past due for each of the last

five years:

Table 14—Accruing Past Due Loans and Leases

At December 31, (dollar amounts in thousands) 2013 2012 2011 2010 2009 Accruing loans and leases past due 90 days or

more

Commercial and industrial

(1) $ 14,562 $ 26,648 $ — $ — $ — Commercial real estate(1) 39,142 56,660 — — — Automobile 5,055 4,418 6,265 7,721 10,586 Residential mortgage (excluding loans

guaranteed by the U.S. government) 2,469 2,718 45,198 53,983 78,915 Home equity 13,983 18,200 20,198 23,497 53,343 Other loans and leases 998 1,672 1,988 2,456 2,814

Total, excl. loans guaranteed by the U.S.

government 76,209 110,316 73,649 87,657 145,658 Add: loans guaranteed by the U.S. government 87,985 90,816 96,703 98,288 101,616

Total accruing loans and leases past due 90

days or more, including loans guaranteed by

the U.S. government $ 164,194 $ 201,132 $ 170,352 $ 185,945 $ 247,274

Ratios:

Excluding loans guaranteed by the U.S.

government, as a percent of total loans and

leases 0.18 % 0.27 % 0.19 % 0.23 % 0.40 % Guaranteed by the U.S. government, as a

percent of total loans and leases 0.20 0.22 0.25 0.26 0.28 Including loans guaranteed by the U.S.

government, as a percent of total loans and

leases 0.38 0.49 0.44 0.49 0.68 (1)

2013 and 2012 amounts represent accruing purchased impaired loans related to the FDIC-assisted Fidelity Bank acquisition. Under the applicable accounting guidance (ASC 310-30), the loans were recorded at fair value

upon acquisition and remain in accruing status.

TDR Loans

(This section should be read in conjunction with Note 3 of the Notes to Consolidated Financial Statements.)

TDRs are modified loans in which a concession is provided to a borrower experiencing financial difficulties.

TDRs can be classified as either accrual or nonaccrual loans. Nonaccrual TDRs are included in NALs whereas

accruing TDRs are excluded from NALs, as it is probable that all contractual principal and interest due under the

restructured terms will be collected. TDRs primarily reflect our loss mitigation efforts to proactively work with

borrowers having difficulty making their payments.

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The table below presents our accruing and nonaccruing TDRs at period-end for each of the past five years:

Table 15—Accruing and Nonaccruing Troubled Debt Restructured Loans

December 31, (dollar amounts in thousands) 2013 2012 2011 2010 2009 Troubled debt restructured loans—accruing:

Commercial and industrial $ 83,857 $ 76,586 $ 54,007 $ 70,136 $ 59,215 Commercial real estate 204,668 208,901 249,968 152,496 97,834 Automobile 30,781 35,784 36,573 29,764 24,704 Home equity 188,266 110,581 52,224 37,257 25,357 Residential mortgage 305,059 290,011 309,678 328,411 229,470 Other consumer 1,041 2,544 6,108 9,565 2,810

Total troubled debt restructured loans—accruing 813,672 724,407 708,558 627,629 439,390 Troubled debt restructured loans—nonaccruing:

Commercial and industrial 7,291 19,268 48,553 15,275 37,849 Commercial real estate 23,981 32,548 21,968 18,187 70,609 Automobile 6,303 7,823 — — — Home equity 20,715 6,951 369 — — Residential mortgage 82,879 84,515 26,089 5,789 4,988 Other consumer — 113 113 — —

Total troubled debt restructured loans—

nonaccruing 141,169 151,218 97,092 39,251 113,446

Total troubled debt restructured loans $ 954,841 $ 875,625 $ 805,650 $ 666,880 $ 552,836

Our strategy is to structure commercial TDRs in a manner that avoids new concessions subsequent to the

initial TDR terms. However, there are times when subsequent modifications are required, such as when the modified

loan matures. Often the loans are performing in accordance with the TDR terms, and a new note is originated with

similar modified terms. These loans are subjected to the normal underwriting standards and processes for other

similar credit extensions, both new and existing. If the loan is not performing in accordance with the existing TDR

terms, typically an individualized approach to repayment is established. In accordance with ASC 310-20-35, the

refinanced note is evaluated to determine if it is considered a new loan or a continuation of the prior loan. A new

loan is considered for removal from the TDR designation. A continuation of the prior note requires the continuation

of the TDR designation, and because the refinanced note constitutes a new or amended debt instrument, it is

included in our TDR activity table (below) as a new TDR and a restructured TDR removal during the period.

The types of concessions granted are consistent with those granted on new TDRs and include interest rate

reductions, amortization or maturity date changes beyond what the collateral supports, and principal forgiveness

based on the borrower’s specific needs at a point in time. Our policy does not limit the number of times a loan may

be modified. A loan may be modified multiple times if it is considered to be in the best interest of both the borrower

and us.

Loans are not automatically considered to be accruing TDRs upon the granting of a new concession. If the

loan is in accruing status and no loss is expected based on the modified terms, the modified TDR remains in

accruing status. For loans that are on nonaccrual status before the modification, collection of both principal and

interest must not be in doubt, and the borrower must be able to exhibit sufficient cash flows for a six-month period

of time to service the debt in order to return to accruing status. This six-month period could extend before or after

the restructure date.

TDRs in the home equity and residential mortgage portfolio will continue to increase for a time as we

continue to appropriately manage the portfolio. Any granted change in terms or conditions that are not readily

available in the market for that borrower, requires the designation as a TDR.

The following table reflects TDR activity for each of the past three years:

Table 16—Troubled Debt Restructured Loan Activity

(dollar amounts in thousands) 2013 2012 2011 TDRs, beginning of period $ 875,625 $ 805,650 $ 666,880

New TDRs(1) 611,556 597,425 583,439 Payments (191,367 ) (191,035 ) (138,467 ) Charge-offs (29,897 ) (81,115 ) (37,341 ) Sales (11,164 ) (13,787 ) (54,715 ) Refinanced to non-TDR — — (40,091 ) Transfer to OREO (8,242 ) (21,709 ) (5,016 ) Restructured TDRs—accruing(2) (211,131 ) (153,583 ) (154,945 ) Restructured TDRs—nonaccruing(2) (26,772 ) (63,080 ) (47,659 ) Other (53,767 ) (3,141 ) 33,565

TDRs, end of period $ 954,841 $ 875,625 $ 805,650

(1) 2013 includes a $46,031 thousand reduction of home equity TDRs incorrectly reflected as new TDRs in the 2013 first quarter. 2013 and 2012 includes $78.4 million and $79.5 million, respectively, of Chapter 7

bankruptcy loans. (2) Represents existing TDRs that were reunderwritten with new terms providing a concession. A corresponding

amount is included in the New TDRs amount above.

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ACL

(This section should be read in conjunction with Note 3 of the Notes to Consolidated Financial Statements.)

Our total credit reserve is comprised of two components, both of which in our judgment are appropriate to

absorb credit losses inherent in our loan and lease portfolio: the ALLL and the AULC. Combined, these reserves

comprise the total ACL. Our Credit Administration group is responsible for developing the methodology

assumptions and estimates used in the calculation, as well as determining the appropriateness of the ACL. The

ALLL represents the estimate of losses inherent in the loan portfolio at the reported date. Additions to the ALLL

result from recording provision expense for loan losses or increased risk levels resulting from loan risk-rating

downgrades, while reductions reflect charge-offs (net of recoveries), decreased risk levels resulting from loan risk-

rating upgrades, or the sale of loans. The AULC is determined by applying the transaction reserve process to the

unfunded portion of the loan exposures multiplied by an applicable funding expectation.

A provision for credit losses is recorded to adjust the ACL to the level we have determined to be appropriate

to absorb credit losses inherent in our loan and lease portfolio. The provision for credit losses in 2013 was

$90.0 million, compared with $147.4 million in 2012.

We regularly evaluate the appropriateness of the ACL by performing on-going evaluations of the loan and

lease portfolio, including such factors as the differing economic risks associated with each loan category, the

financial condition of specific borrowers, the level of delinquent loans, the value of any collateral and, where

applicable, the existence of any guarantees or other documented support. We evaluate the impact of changes in

interest rates and overall economic conditions on the ability of borrowers to meet their financial obligations when

quantifying our exposure to credit losses and assessing the appropriateness of our ACL at each reporting date. In

addition to general economic conditions and the other factors described above, we also consider the impact of

collateral value trends and portfolio diversification.

In 2013, we implemented an enhanced commercial risk rating system and ACL calculation process. In

addition, we enhanced some of our qualitative assessments, specifically around the impact of the prevailing

economic conditions. These enhancements had an immaterial impact on the overall credit reserve and the overall

decline in the ACL was primarily due to an improvement in underlying credit quality across the portfolio. The

portfolio level changes are more fully described below.

Our ACL evaluation process includes the on-going assessment of credit quality metrics, and a comparison of

certain ACL benchmarks to current performance. While the total ACL balance has declined in recent quarters, all of

the relevant benchmarks remain strong.

The following table reflects activity in the ALLL and AULC for each of the last five years:

Table 17—Summary of Allowance for Credit Losses and Related Statistics Year Ended December 31, (dollar amounts in thousands) 2013 2012 2011 2010 2009 Allowance for loan and lease losses,

beginning of year $ 769,075 $ 964,828 $ 1,249,008 $ 1,482,479 $ 900,227 Loan and lease charge-offs

Commercial:

Commercial and industrial (45,904 ) (101,475 ) (134,385 ) (316,771 ) (525,262 )

Commercial real estate:

Construction (9,585 ) (12,131 ) (42,012 ) (116,428 ) (196,148 )

Commercial (59,927 ) (105,920 ) (140,747 ) (187,567 ) (500,534 )

Commercial real estate (69,512 ) (118,051 ) (182,759 ) (303,995 ) (696,682 )

Total commercial (115,416 ) (219,526 ) (317,144 ) (620,766 ) (1,221,944 )

Consumer:

Automobile (23,912 ) (26,070 ) (33,593 ) (46,308 ) (76,141 )

Home equity (98,184 ) (124,286 ) (109,427 ) (140,831 ) (110,400 ) Residential mortgage (34,236 ) (52,228 ) (65,069 ) (163,427 ) (111,899 )

Other consumer (34,568 ) (33,090 ) (32,520 ) (32,575 ) (40,993 )

Total consumer (190,900 ) (235,674 ) (240,609 ) (383,141 ) (339,433 )

Total charge-offs (306,316 ) (455,200 ) (557,753 ) (1,003,907 ) (1,561,377 )

Recoveries of loan and lease charge-offs

Commercial:

Commercial and industrial 29,514 37,227 44,686 61,839 37,656 Commercial real estate:

Construction 3,227 4,090 10,488 7,420 3,442 Commercial 41,431 35,532 24,170 21,013 10,509

Total commercial real estate 44,658 39,622 34,658 28,433 13,951

Total commercial 74,172 76,849 79,344 90,272 51,607

Consumer:

Automobile 13,375 16,628 18,526 19,736 19,809

Home equity 15,921 7,907 7,630 1,458 4,224 Residential mortgage 7,074 4,305 8,388 10,532 1,697 Other consumer 7,108 7,049 6,776 7,435 7,453

Total consumer 43,478 35,889 41,320 39,161 33,183

Total recoveries 117,650 112,738 120,664 129,433 84,790

Net loan and lease charge-offs (188,666 ) (342,462 ) (437,089 ) (874,474 ) (1,476,587 )

Provision for loan and lease losses 67,797 155,193 167,730 641,299 2,069,931 Allowance for assets sold and securitized or

transferred to loans held for sale (336 ) (8,484 ) (14,821 ) (296 ) (11,092 )

Allowance for loan and lease losses, end of

year 647,870 769,075 964,828 1,249,008 1,482,479

Allowance for unfunded loan commitments,

beginning of year 40,651 48,456 42,127 48,879 44,139 (Reduction in) Provision for unfunded loan

commitments and letters of credit losses 22,248 (7,805 ) 6,329 (6,752 ) 4,740

Allowance for unfunded loan commitments,

end of year 62,899 40,651 48,456 42,127 48,879

Allowance for credit losses, end of year $ 710,769 $ 809,726 $ 1,013,284 $ 1,291,135 $ 1,531,358

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The table below reflects the allocation of our ACL among our various loan categories during each of the past

five years:

Table 18—Allocation of Allowances for Credit Losses (1) At December 31, (dollar amounts in

thousands) 2013 2012 2011 2010 2009 Commercial:

Commercial

and

industrial $ 265,80

1 41 % $ 241,05

1 42 % $ 275,367 38 % $ 340,614 34 % $ 492,205 35 % Commercial

real estate 162,55

7 11 285,36

9 14 388,706 14 588,251 18 751,875 21

Total commercial

428,35

8 52 526,42

0 56 664,073 52 928,865 52 1,244,08

0 56

Consumer:

Automobile 31,053 15 34,979 11 38,282 11 49,488 15 57,951 9

Home equity

111,13

1 19 118,76

4 20 143,873 21 150,630 20 102,039 21 Residential

mortgage 39,577 12 61,658 12 87,194 13 93,289 12 55,903 12 Other loans 37,751 2 27,254 1 31,406 3 26,736 1 22,506 2

Total consumer

219,51

2 48 242,65

5 44 300,755 48 320,143 48 238,399 44

Total allowance for

loan and lease

losses 647,87

0 100 % 769,07

5 100 % 964,828 100 % 1,249,00

8 100 % 1,482,47

9 100 %

Allowance for

unfunded loan

commitments 62,899

40,651

48,456

42,127

48,879

Total allowance for

credit losses $ 710,76

9

$ 809,72

6

$ 1,013,28

4

$ 1,291,13

5

$ 1,531,35

8

Total allowance

for loan and

leases losses

as % of:

Total loans and

leases

1.5

0 %

1.8

9 %

2.4

8 %

3.2

8 %

4.0

3 %

Nonaccrual

loans and

leases

201

189

178

161

77 Nonperforming

assets

184

173

163

148

72 Total allowance for

credit losses as %

of:

Total loans and

leases

1.6

5 %

1.9

9 %

2.6

0 %

3.3

9 %

4.1

6 %

Nonaccrual

loans and

leases

221

199

187

166

80 Nonperforming

assets

202

182

172

153

74

(1) Percentages represent the percentage of each loan and lease category to total loans and leases.

The C&I ACL increased $24.8 million compared with December 31, 2012, primarily due to the enhancements

to the risk rating system and assumptions regarding the unfunded portion of loan commitments. The CRE ACL

decreased $122.8 million compared with December 31, 2012, due to the impact of incorporating the current

collateral value in the calculation of the expected loss in addition to a property type analysis. This provides a more

specific assessment of the potential Loss Given Default. The current portfolio management practices focus on

increasing borrower equity in the projects, and recent underwriting includes meaningfully lower LTV. The

December 31, 2013, CRE ACL covers NALs by more than two times and represents 13 quarters of the average 4

quarter charge-off level. The decrease associated with the auto portfolio is based on the continued positive

performance metrics and the high quality origination strategy. The home equity ALLL increased slightly as the

junior-lien lien component remains the riskiest portion of the portfolio. The residential mortgage portfolio ALLL

declined, consistent with the improving credit quality metrics. The ALLL for the other consumer portfolio is

consistent with expectations given the increasing level of overdraft exposure. The reduction in the ACL, compared

with December 31, 2012, is primarily a function of the decline in the CRE portfolio.

Compared with December 31, 2012, the AULC increased $22.2 million, primarily reflecting the impact of an

enhanced assessment of the unfunded commercial exposure.

The ACL to total loans declined to 1.65% at December 31, 2013, compared to 1.99% at December 31, 2012.

We believe the decline in the ratio is appropriate given the continued improvement in the risk profile of our loan

portfolio. Further, we believe that early identification of loans with changes in credit metrics and aggressive action

plans for these loans, combined with originating high quality new loans will contribute to continued improvement in

our key credit quality metrics.

We have significant exposure to loans secured by residential real estate and continue to be an active lender in

our communities. The impact of the downturn in real estate values over the past several years has had a significant

impact on some of our borrowers as evidenced by the higher delinquencies and NCOs since late 2007. Recently, real

estate values have begun to slowly rise from their 2007 levels in our primary markets.

Given the combination of these noted positive and negative factors, we believe that our ACL is appropriate

and its coverage level is reflective of the quality of our portfolio and the current operating environment.

NCOs

Any loan in any portfolio may be charged-off prior to the policies described below if a loss confirming event

has occurred. Loss confirming events include, but are not limited to, bankruptcy (unsecured), continued

delinquency, foreclosure, or receipt of an asset valuation indicating a collateral deficiency and that asset is the sole

source of repayment. Additionally, discharged, collateral dependent non-reaffirmed debt in Chapter 7 bankruptcy

filings will result in a charge-off to estimated collateral value, less anticipated selling costs at the time of the

modification.

C&I and CRE loans are either charged-off or written down to net realizable value at 90-days past due.

Automobile loans and other consumer loans are charged-off at 120-days past due. First-lien and junior-lien home

equity loans are charged-off to the estimated fair value of the collateral, less anticipated selling costs, at 150-days

past due and 120-days past due, respectively. Residential mortgages are charged-off to the estimated fair value of the

collateral, less anticipated selling costs, at 150-days past due.

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The following table reflects NCO detail for each of the last five years:

Table 19—Net Loan and Lease Charge-offs Year Ended December 31, (dollar amounts in thousands) 2013 2012 2011 2010 2009 Net charge-offs by loan and lease type

Commercial:

Commercial and industrial $ 16,390 $ 64,248 $ 89,699 $ 254,932 $ 487,606

Commercial real estate:

Construction 6,358 8,041 31,524 109,008 192,706

Commercial 18,496 70,388 116,577 166,554 490,025

Total commercial real estate 24,854 78,429 148,101 275,562 682,731

Total commercial 41,244 142,677 237,800 530,494 1,170,337

Consumer:

Automobile 10,537 9,442 15,067 26,572 56,332

Home equity 82,263 116,379 101,797 139,373 106,176 Residential mortgage 27,162 47,923 56,681 152,895 110,202 Other consumer 27,460 26,041 25,744 25,140 33,540

Total consumer 147,422 199,785 199,289 343,980 306,250

Total net charge-offs $ 188,666 $ 342,462 $ 437,089 $ 874,474 $ 1,476,587

Net charge-offs ratio: (1)

Commercial:

Commercial and industrial 0.10 % 0.40 % 0.66 % 2.05 % 3.71 % Commercial real estate:

Construction 1.10 1.38 5.33 9.95 10.37 Commercial 0.42 1.35 2.08 2.72 6.71

Commercial real estate 0.49 1.36 2.39 3.81 7.46

Total commercial 0.19 0.66 1.20 2.70 5.25

Consumer:

Automobile 0.19 0.21 0.26 0.54 1.59

Home equity 0.99 1.40 1.28 1.84 1.40 Residential mortgage 0.52 0.92 1.20 3.42 2.43 Other consumer 6.30 5.72 4.85 3.80 4.65

Total consumer 0.75 1.08 1.05 1.95 1.87

Net charge-offs as a % of average loans 0.45 % 0.85 % 1.12 % 2.35 % 3.82 %

In assessing NCO trends, it is helpful to understand the process of how commercial loans are treated as they

deteriorate over time. The ALLL established is consistent with the level of risk associated with the original

underwriting. As a part of our normal portfolio management process for commercial loans, the loan is periodically

reviewed and the ALLL is increased or decreased based on the updated risk rating. In certain cases, the standard

ALLL is determined to not be appropriate, and a specific reserve is established based on the projected cash flow or

collateral value of the specific loan. Charge-offs, if necessary, are generally recognized in a period after the specific

ALLL was established. If the previously established ALLL exceeds that necessary to satisfactorily resolve the

problem loan, a reduction in the overall level of the ALLL could be recognized. Consumer loans are treated in much

the same manner as commercial loans, with increasing reserve factors applied based on the risk characteristics of the

loan, although specific reserves are not identified for consumer loans. In summary, if loan quality deteriorates, the

typical credit sequence would be periods of reserve building, followed by periods of higher NCOs as the previously

established ALLL is utilized. Additionally, an increase in the ALLL either precedes or is in conjunction with

increases in NALs. When a loan is classified as NAL, it is evaluated for specific ALLL or charge-off. As a result, an

increase in NALs does not necessarily result in an increase in the ALLL or an expectation of higher future NCOs.

Our overall NCOs are returning to pre-recession levels, however, we anticipate NCO levels for both the

residential mortgage and home equity portfolios will remain at elevated levels in the near future. The home equity

portfolio will continue to be impacted by borrowers that are seeking to refinance, but are in a negative equity

position because of the junior-lien loan. Right-sizing and debt forgiveness associated with these situations are

becoming more frequent as borrowers realize the impact to their credit is minor, and that a default on a junior-lien

loan is not likely to cause borrowers to lose their home.

All residential mortgage loans greater than 150-days past due are charged-down to the estimated value of the

collateral, less anticipated selling costs. The remaining balance is in delinquent status until a modification can be

completed, or the loan goes through the foreclosure process. For the home equity portfolio, virtually all of the

defaults represent full charge-offs, as there is no remaining equity, creating a lower delinquency rate but a higher

NCO impact.

2013 versus 2012

C&I NCOs decreased $47.9 million, or 74%, primarily reflecting credit quality improvement in the underlying

portfolio, as well as our on-going proactive credit management practices. Also, 2013 included significant recoveries

from prior year charge-offs.

CRE NCOs decreased $53.6 million, or 68%, reflecting both a reduction in loss events and significant

recoveries during 2013. This performance is consistent with our expectations for the portfolio, as some degree of

quarterly volatility is expected given the low absolute levels of NCOs in the portfolio. There was no concentration in

either geography or project type.

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Automobile NCOs increased $1.1 million, or 12%. The relatively low levels of NCOs reflected the continued

high credit quality of originations and a strong resale market for used vehicles. The slight increasing trend was

expected given the absolute low levels achieved in 2012.

Home equity NCOs decreased $34.1 million, or 29%, primarily reflecting improved delinquency rates and

fewer significant dollar size losses compared to the prior year. The impact from the Chapter 7 bankruptcy treatment

decision inflated the 2012 results, with an additional lesser impact in 2013. Absent the Chapter 7 bankruptcy impact,

the improvement would have been 15% year over year.

Residential mortgage NCOs declined $20.8 million, or 43%, and reflected improvement in the overall housing

market compared to the prior year.

Market Risk

Market risk represents the risk of loss due to changes in market values of assets and liabilities. We incur

market risk in the normal course of business through exposures to market interest rates, foreign exchange rates,

equity prices, and credit spreads. We have identified two primary sources of market risk: interest rate risk and price

risk.

Interest Rate Risk

OVERVIEW

Huntington actively manages interest rate risk, as changes in market interest rates can have a significant

impact on reported earnings. The interest rate risk process is designed to compare income simulations in market

scenarios designed to alter the direction, magnitude, and speed of interest rate changes, as well as the slope of the

yield curve. These scenarios are designed to illustrate the embedded optionality in the balance sheet from, among

other things, faster or slower mortgage prepayments and changes in deposit mix.

INCOME SIMULATION AND ECONOMIC VALUE ANALYSIS

Interest rate risk measurement is calculated and reported to the ALCO monthly and ROC at least quarterly.

The information reported includes period-end results and identifies any policy limits exceeded, along with an

assessment of the policy limit breach and the action plan and timeline for resolution, mitigation, or assumption of

the risk.

Huntington uses two approaches to model interest rate risk: Interest Sensitive Earnings at Risk (ISE analysis)

and Economic Value of Equity (EVE analysis). Under ISE analysis, net interest income is modeled utilizing various

assumptions for assets, liabilities, and derivative positions under various interest rate scenarios over a one-year time

horizon. Market implied forward rates and various likely and extreme interest rate scenarios are used for ISE

analysis. These likely and extreme scenarios include rapid and gradual interest rate ramps, rate shocks, and yield

curve twists. EVE analysis measures the market value of assets minus the market value of liabilities and the change

in this value as rates change.

Table 20—Interest Sensitive Earnings at Risk

Net Interest Income at Risk (%) Basis point change scenario -25 +100 +200

Board policy limits — -2.0 % -4.0 %

December 31, 2013 -0.4 % 0.2 % 0.0 %

The ISE results included in the table above reflect the analysis used monthly by management. It models

gradual -25, +100 and +200 basis point parallel shifts in market interest rates over the next one-year period, beyond

the interest rate change implied by the forward yield curve. Due to the current low level of short-term interest rates,

the analysis reflects a declining interest rate scenario of 25 basis points, the point at which many assets and liabilities

reach zero percent.

Huntington is within Board policy limits for the +100 and +200 basis point scenarios. There is no policy limit

for the -25 basis point scenario. The ISE analysis reported at December 31, 2013, shows that Huntington’s earnings

are not significantly sensitive to changes in interest rates. Due to an increase in the amount of fixed rate assets,

consisting primarily of indirect auto loans and fixed rate securities, the amount of asset sensitivity declined through

the year. The scenarios above also include the impact of market rate changes on the duration of fixed-rate mortgage-

related assets, which extend as rates rise and reduce asset sensitivity. As interest rates rise, the net earnings from our

interest rate swaps declines faster under the +200 than +100 basis point scenario resulting in lower asset sensitivity

as shown above.

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Table 21—Economic Value of Equity at Risk

Economic Value of Equity at Risk (%) Basis point change scenario -25 +100 +200

Board policy limits — -5.0 % -12.0 %

December 31, 2013 0.6 % -3.9 % -9.3 %

The EVE results included in the table above reflect the analysis used monthly by management. It models

immediate -25, +100 and +200 basis point parallel shifts in market interest rates. Due to the current low level of

short-term interest rates, the analysis reflects a declining interest rate scenario of 25 basis points, the point at which

many assets and liabilities reach zero percent.

Huntington is within Board policy limits for the +100 and +200 basis point scenarios. There is no policy limit

for the -25 basis point scenario. The EVE at risk reported at December 31, 2013, shows that as interest rates increase

(decrease) immediately, the economic value of equity position will decrease (increase). When interest rates rise,

fixed rate assets generally lose economic value; the longer the duration, the greater the value lost. The opposite is

true when interest rates fall.

Compared to recent periods, the EVE results for December 31, 2013, reflect the impact of additional

mortgage-backed securities, which were added to increase the amount of highly liquid assets in our investment

portfolio, and higher market rates.

MSR

(This section should be read in conjunction with Note 6 of the Notes to the Consolidated Financial Statements.)

At December 31, 2013 we had a total of $162.3 million of capitalized MSRs representing the right to service

$15.2 billion in mortgage loans. Of this $162.3 million, $34.2 million was recorded using the fair value method and

$128.1 million was recorded using the amortization method.

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. We have employed strategies to reduce the risk of MSR fair value changes or impairment. In

addition, we engage a third party to provide valuation tools and assistance with our strategies with the objective to

decrease the volatility 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

in the mortgage banking income category of noninterest income. Changes in fair value between reporting dates are

recorded as an increase or a decrease in mortgage banking income.

MSRs recorded using the amortization method generally relate to loans originated with historically low

interest rates, resulting in a lower probability of prepayments and, ultimately, impairment. MSR assets are included

in accrued income and other assets in the Consolidated Financial Statements.

Price Risk

Price risk represents the risk of loss arising from adverse movements in the prices of financial instruments that

are carried at fair value and are subject to fair value accounting. We have price risk from trading securities,

securities owned by our broker-dealer subsidiaries, foreign exchange positions, equity investments, investments in

securities backed by mortgage loans, and marketable equity securities held by our insurance subsidiaries. We have

established loss limits on the trading portfolio, on the amount of foreign exchange exposure that can be maintained,

and on the amount of marketable equity securities that can be held by the insurance subsidiaries.

Liquidity Risk

Liquidity risk is the risk of loss due to the possibility that funds may not be available to satisfy current or

future commitments resulting from external macro market issues, investor and customer perception of financial

strength, and events unrelated to us, such as war, terrorism, or financial institution market specific issues. In

addition, the mix and maturity structure of Huntington’s balance sheet, the amount of on-hand cash and

unencumbered securities, and the availability of contingent sources of funding can have an impact on Huntington’s

ability to satisfy current or future funding commitments. We manage liquidity risk at both the Bank and the parent

company.

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The overall objective of liquidity risk management is to ensure that we can obtain cost-effective funding to

meet current and future obligations, and can maintain sufficient levels of on-hand liquidity, under both normal

business-as-usual and unanticipated stressed circumstances. The ALCO was appointed by the ROC to oversee

liquidity risk management and the establishment of liquidity risk policies and limits. Contingency funding plans are

in place, which measure forecasted sources and uses of funds under various scenarios in order to prepare for

unexpected liquidity shortages. Liquidity risk is reviewed monthly for the Bank and the parent company, as well as

its subsidiaries. In addition, liquidity working groups meet regularly to identify and monitor liquidity positions,

provide policy guidance, review funding strategies, and oversee the adherence to, and maintenance of, the

contingency funding plans.

Available-for-sale and other securities portfolio

(This section should be read in conjunction with the Critical Accounting Policies and Use of Significant Estimates

discussion, and Note 4 of the Notes to Consolidated Financial Statements.)

Our investment securities portfolio is evaluated under established asset/liability management objectives.

Changing market conditions could affect the profitability of the portfolio, as well as the level of interest rate risk

exposure.

Our available-for-sale and other securities portfolio is comprised of various financial instruments. At

December 31, 2013, our available-for-sale and other securities portfolio totaled $7.3 billion, a decrease of $0.3

billion from 2012. The duration of the portfolio increased by 1.3 years to 4.2 years.

The composition and maturity of the portfolio is presented on the following two tables:

Table 22—Available-for-sale and other securities Portfolio Summary at Fair Value

At December 31, (dollar amounts in thousands) 2013 2012 2011 U.S. Government backed agencies $ 3,937,713 $ 4,676,607 $ 5,253,640 Other 3,371,040 2,889,568 2,824,374

Total available-for-sale and other securities $ 7,308,753 $ 7,566,175 $ 8,078,014

Duration in years (1) 4.2 2.9 3.1

(1) The average duration assumes a market driven prepayment rate on securities subject to prepayment.

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Table 23—Available-for-sale and other securities Portfolio Composition and Maturity

At December 31, 2013 Amortized (dollar amounts in thousands) Cost Fair Value Yield (1)

U.S. Treasury:

Under 1 year $ 50,793 $ 51,086 1.01 %

1-5 years 507 516 1.94 6-10 years — — — Over 10 years 1 2 —

Total U.S. Treasury 51,301 51,604 1.02

Federal agencies: mortgage-backed securities

Under 1 year 16,548 16,607 1.93 1-5 years 164,794 166,946 1.97 6-10 years 440,116 443,456 2.51 Over 10 years 2,940,986 2,939,212 2.38

Total Federal agencies: mortgage-backed

securities 3,562,444 3,566,221 2.38

Other agencies:

Under 1 year 2,833 2,880 3.15

1-5 years 291,726 297,510 1.56 6-10 years 19,318 19,498 2.23 Over 10 years — — —

Total other Federal agencies 313,877 319,888 1.62

Total U.S. Government backed agencies 3,927,622 3,937,713 2.30

Municipal securities:

Under 1 year 191,788 190,762 2.18

1-5 years 206,719 211,916 3.11 6-10 years 556,873 554,772 2.84 Over 10 years 184,883 188,542 3.82

Total municipal securities 1,140,263 1,145,992 2.94

Private label CMO:

Under 1 year — — —

1-5 years — — — 6-10 years 1,997 2,089 5.98 Over 10 years 49,241 47,015 2.45

Total private label CMO 51,238 49,104 2.59

Asset-backed securities:

Under 1 year — — —

1-5 years 434,825 438,156 1.90 6-10 years 260,354 260,880 1.96 Over 10 years 477,105 392,004 2.04

Total asset-backed securities 1,172,284 1,091,040 1.97

Covered bonds:

Under 1 year — — —

1-5 years 280,595 285,874 1.75 6-10 years — — — Over 10 years — — —

Total covered bonds 280,595 285,874 1.75

Corporate debt:

Under 1 year 903 916 3.49

1-5 years 283,079 292,989 3.42 6-10 years 161,398 152,608 2.79 Over 10 years 10,113 10,727 4.85

Total corporate debt 455,493 457,240 3.23

Other:

Under 1 year 500 500 1.43

1-5 years 3,399 3,327 2.42 6-10 years — — NA Over 10 years — — NA Nonmarketable equity securities (2) 320,991 320,992 4.97 Marketable equity securities (3) 16,522 16,971 NA

Total other 341,412 341,790 4.70

Total available-for-sale and other securities $ 7,368,907 $ 7,308,753 2.51 %

(1) Weighted average yields were calculated using amortized cost on a fully-taxable equivalent basis, assuming a 35% tax rate.

(2) Consists of FHLB and FRB restricted stock holding carried at par. (3) Consists of certain mutual fund and equity security holdings.

Investment securities portfolio

The expected weighted average maturities of our AFS and HTM portfolios are significantly shorter than their

contractual maturities as reflected in Note 4 and Note 5 of the Notes to Consolidated Financial Statements.

Particularly regarding the MBS and ABS, prepayments of principal and interest that historically occur in advance of

scheduled maturities will shorten the expected life of these portfolios. The expected weighted average maturities,

which take into account expected prepayments of principal and interest under existing interest rate conditions, are

shown in the following table:

Table 24—Expected life of investment securities

December 31, 2013

Available-for-Sale & Other

Securities Held-to-Maturity

Securities

(dollar amounts in thousands) Amortized

Cost Fair

Value Amortized

Cost Fair

Value Under 1 year $ 588,909 $ 585,794 $ — $ — 1—5 years 3,480,761 3,538,852 327,407 326,775 6—10 years 2,591,270 2,543,659 3,509,260 3,434,122 Over 10 years 370,454 302,486 — — Other securities 337,513 337,962 — —

Total $ 7,368,907 $ 7,308,753 $ 3,836,667 $ 3,760,897

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Table of Contents

Bank Liquidity and Sources of Liquidity

Our primary sources of funding for the Bank are retail and commercial core deposits. As of December 31,

2013, these core deposits funded 76% of total assets (105% of total loans). At December 31, 2013, total core

deposits represented 95% of total deposits, relatively unchanged from prior year-end.

Core deposits are comprised of interest-bearing and noninterest-bearing demand deposits, money market

deposits, savings and other domestic deposits, consumer certificates of deposit both over and under $250,000, and

nonconsumer certificates of deposit less than $250,000. Noncore deposits consist of brokered money market

deposits and certificates of deposit, foreign time deposits, and other domestic deposits of $250,000 or more

comprised primarily of public fund certificates of deposit more than $250,000.

Core deposits may increase our need for liquidity as certificates of deposit mature or are withdrawn before

maturity and as nonmaturity deposits, such as checking and savings account balances, are withdrawn. Noninterest-

bearing demand deposits increased $1.1 billion from the prior year, but include certain large commercial deposits

that may be more short-term in nature.

Demand deposit overdrafts that have been reclassified as loan balances were $19.3 million and $17.2 million

at December 31, 2013 and 2012, respectively.

The following tables reflect contractual maturities of other domestic time deposits of $250,000 or more and

brokered deposits and negotiable CDs as well as other domestic time deposits of $100,000 or more and brokered

deposits and negotiable CDs at December 31, 2013.

Table 25—Maturity Schedule of time deposits, brokered deposits, and negotiable CDs December 31, 2013

(dollar amounts in millions) 3 Months or Less

3 Months to 6 Months

6 Months to 12 Months

12 Months or More Total

Other domestic time deposits of $250,000 or more and

brokered deposits and negotiable CDs $ 248 $ 1,345 $ 68 $ 193 $ 1,854 Other domestic time deposits of $100,000 or more and

brokered deposits and negotiable CDs $ 263 $ 1,358 $ 91 $ 216 $ 1,928

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The following table reflects deposit composition detail for each of the last five years:

Table 26—Deposit Composition At December 31, (dollar amounts in millions) 2013 2012 2011 2010 2009 By Type

Demand deposits—

noninterest-bearing $ 13,650 29 % $ 12,600 27 % $ 11,158 26 % $ 7,217 17 % $ 6,907 17 % Demand deposits—

interest-bearing 5,880 12 6,218 13 5,722 13 5,469 13 5,890 15 Money market

deposits 17,213 36 14,691 32 13,117 30 13,410 32 9,485 23 Savings and other

domestic deposits 4,871 10 5,002 11 4,698 11 4,643 11 4,652 11 Core certificates of

deposit 3,723 8 5,516 12 6,513 15 8,525 20 10,453 26

Total core deposits 45,337 95 44,027 95 41,208 95 39,264 93 37,387 92 Other domestic deposits of

$250,000 or more 274 1 354 1 390 1 675 2 652 2 Brokered deposits and

negotiable CDs 1,580 3 1,594 3 1,321 3 1,532 4 2,098 5 Deposits in foreign offices 316 1 278 1 361 1 383 1 357 1

Total deposits $ 47,507 100 % $ 46,253 100 % $ 43,280 100 % $ 41,854 100 % $ 40,494 100 %

Total core deposits:

Commercial $ 19,982 44 % $ 18,358 42 % $ 16,366 40 % $ 12,476 32 % $ 11,368 30 %

Personal 25,355 56 25,669 58 24,842 60 26,788 68 26,019 70

Total core deposits $ 45,337 100 % $ 44,027 100 % $ 41,208 100 % $ 39,264 100 % $ 37,387 100 %

The following table reflects short-term borrowings detail for each of the last five years:

Table 27—Federal Funds Purchased and Repurchase Agreements (dollar amounts in millions) 2013 2012 2011 2010 2009 Balance at period-end

Federal Funds purchased and securities sold under agreements to repurchase $ 549 $ 576 $ 1,434 $ 1,966 $ 851

Other short-term borrowings 4 14 7 75 25

Weighted average interest rate at period-end

Federal Funds purchased and securities sold under

agreements to repurchase 0.06 % 0.15 % 0.17 % 0.19 % 0.21 % Other short-term borrowings 2.59 1.98 2.74 0.53 1.17

Maximum amount outstanding at month-end during

the period

Federal Funds purchased and securities sold under

agreements to repurchase $ 787 $ 1,590 $ 2,431 $ 2,084 $ 1,095 Other short-term borrowings 19 26 86 108 54

Average amount outstanding during the period

Federal Funds purchased and securities sold under

agreements to repurchase $ 692 $ 1,293 $ 2,009 $ 1,375 $ 903 Other short-term borrowings 8 17 46 70 30

Weighted average interest rate during the period

Federal Funds purchased and securities sold under

agreements to repurchase 0.08 % 0.14 % 0.16 % 0.19 % 0.21 % Other short-term borrowings 1.79 1.36 0.59 0.43 1.47

To the extent we are unable to obtain sufficient liquidity through core deposits, we may meet our liquidity

needs through sources of wholesale funding or asset securitization or sale. Sources of wholesale funding include

other domestic time deposits of $250,000 or more, brokered deposits and negotiable CDs, deposits in foreign

offices, short-term borrowings, FHLB advances, other long-term debt, and subordinated notes. At December 31,

2013, total wholesale funding was $7.0 billion, an increase from $5.2 billion at December 31, 2012. The increase

from prior year primarily relates to an increase in other long-term debt and FHLB borrowings, partially offset by a

decrease in subordinated notes and short-term borrowings. The amounts included in wholesale funding at

December 31, 2013, had a weighted average maturity of 2.95 years.

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In August 2013, the Bank issued $350.0 million of senior notes at 99.865% of face value. The senior bank

note issuances mature on August 2, 2016 and have a fixed coupon rate of 1.35%. The senior note issuance may be

redeemed one month prior to the maturity date at 100% of principal plus accrued and unpaid interest.

In November 2013, the Bank issued $500.0 million of senior notes at 99.979% of face value. The senior bank

note issuances mature on November 20, 2016 and have a fixed coupon rate of 1.30%. The senior note issuance may

be redeemed one month prior to the maturity date at 100% of principal plus accrued and unpaid interest.

We can also obtain funding through other methods including: (1) purchasing federal funds, (2) selling

securities under repurchase agreements, (3) selling or maturity of investment securities, (4) selling or securitization

of loans, (5) selling of national market certificates of deposit, (6) the relatively shorter-term structure of our

commercial loans (see table below) and automobile loans, and (7) issuing of common and preferred stock.

The Bank also has access to the Federal Reserve’s discount window. These borrowings are secured by

commercial loans and home equity lines-of-credit. The Bank is also a member of the FHLB, and as such, has access

to advances from this facility. These advances are generally secured by residential mortgages, other mortgage-

related loans, and available-for-sale securities.

At December 31, 2013, we believe the Bank had sufficient liquidity to meet its cash flow obligations for the

foreseeable future.

Table 28—Maturity Schedule of Commercial Loans December 31, 2013

(dollar amounts in millions) One Year

or Less

One to

Five Year

s After

Five Years Total

Percent

of total

Commercial and industrial $ 4,640 $ 9,689 $ 3,265 $ 17,594 78 % Commercial real estate—construction 193 318 46 557 3 Commercial real estate—commercial 1,305 2,558 430 4,293 19

Total $ 6,138 $ 12,565 $ 3,741 $ 22,444 100 %

Variable-interest rates $ 5,582 $ 10,057 $ 2,429 $ 18,068 81 % Fixed-interest rates 556 2,508 1,312 4,376 19

Total $ 6,138 $ 12,565 $ 3,741 $ 22,444 100 %

Percent of total 27 % 56 % 17 % 100 %

At December 31, 2013, AFS securities, with a fair value of $2.6 billion, were pledged to secure public and

trust deposits, interest rate swap agreements, U.S. Treasury demand notes, and securities sold under repurchase

agreements.

Parent Company Liquidity

The parent company’s funding requirements consist primarily of dividends to shareholders, debt service,

income taxes, operating expenses, funding of nonbank subsidiaries, repurchases of our stock, and acquisitions. The

parent company obtains funding to meet obligations from interest received from the Bank, interest and dividends

received from direct subsidiaries, net taxes collected from subsidiaries included in the federal consolidated tax

return, fees for services provided to subsidiaries, and the issuance of debt securities.

At December 31, 2013 and December 31, 2012, the parent company had $1.0 billion and $0.9 billion,

respectively, in cash and cash equivalents.

Based on the current quarterly dividend of $0.05 per common share, cash demands required for common stock

dividends are estimated to be approximately $41.5 million per quarter. Based on the current dividend, cash demands

required for Series A Preferred Stock are estimated to be approximately $7.7 million per quarter. Cash demands

required for Series B Preferred Stock are expected to be approximately $0.3 million per quarter. The Preferred A

and B dividends are payable on April 15, 2014, to shareholders of record on April 1, 2014.

Based on a regulatory dividend limitation, the Bank could not have declared and paid a dividend to the parent

company until December 31, 2013, without regulatory approval due to the deficit position of its undivided profits.

We anticipate that the Bank will declare dividends to the holding company during the first half of 2014. To help

meet any additional liquidity needs, we have an open-ended, automatic shelf registration statement filed and

effective with the SEC, which permits us to issue an unspecified amount of debt or equity securities.

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With the exception of the items discussed above, the parent company does not have any significant cash

demands. It is our policy to keep operating cash on hand at the parent company to satisfy cash demands for the next

18 months.

In August 2013, the parent company issued $400.0 million of senior notes at 99.8% of face value. The senior

note issuances mature on August 2, 2018 and have a fixed coupon rate of 2.60%. The senior note issuances may be

redeemed one month prior to the maturity date at 100% of principal plus accrued and unpaid interest.

On October 24, 2013, the OCC, U.S. Treasury, FRB, and the FDIC, issued an NPR regarding the

implementation of a quantitative liquidity requirement consistent with the LCR standard established by the Basel

Committee on Banking Supervision. The requirements are designed to promote the short term resilience of the

liquidity risk profile of banks, to which it applies. Comments on the requirement could be submitted until

January 31, 2014. If implemented as proposed, the requirement will likely cause some banks, including us, to

purchase additional amounts of unencumbered, high quality liquid assets, which can easily be converted into cash.

Considering the factors discussed above, and other analyses that we have performed, we believe the parent

company has sufficient liquidity to meet its cash flow obligations for the foreseeable future.

Off-Balance Sheet Arrangements

In the normal course of business, we enter into various off-balance sheet arrangements. These arrangements

include financial guarantees contained in standby letters-of-credit issued by the Bank and commitments by the Bank

to sell mortgage loans.

Standby letters-of-credit are conditional commitments issued to guarantee the performance of a customer to a

third party. These guarantees are primarily issued to support public and private borrowing arrangements, including

commercial paper, bond financing, and similar transactions. Most of these arrangements mature within two years

and are expected to expire without being drawn upon. Standby letters-of-credit are included in the determination of

the amount of risk-based capital that the parent company and the Bank are required to hold.

Through our credit process, we monitor the credit risks of outstanding standby letters-of-credit. When it is

probable that a standby letter-of-credit will be drawn and not repaid in full, a loss is recognized in the provision for

credit losses. At December 31, 2013, we had $439.8 million of standby letters-of-credit outstanding, of which 84%

were collateralized. Included in this $439.8 million are letters-of-credit issued by the Bank that support securities

that were issued by our customers and remarketed by The Huntington Investment Company, our broker-dealer

subsidiary.

We enter into forward contracts relating to the mortgage banking business to hedge the exposures we have

from commitments to extend new residential mortgage loans to our customers and from our mortgage loans held for

sale. At December 31, 2013 and December 31, 2012, we had commitments to sell residential real estate loans of

$452.6 million and $849.8 million, respectively. These contracts mature in less than one year.

We do not believe that off-balance sheet arrangements will have a material impact on our liquidity or capital

resources.

Table 29—Contractual Obligations (1)

December 31, 2013

(dollar amounts in millions) One Year

or Less 1 to 3

Years 3 to 5

Years More than

5 Years Total Deposits without a stated maturity $ 40,839 $ — $ — $ — $ 40,839 Certificates of deposit and other time deposits 4,674 1,643 228 123 6,668 FHLB advances 1,800 — 1 7 1,808 Short-term borrowings 552 — — — 552 Other long-term debt — 850 435 65 1,350 Subordinated notes 125 108 231 637 1,101 Operating lease obligations 49 90 77 189 405 Purchase commitments 114 131 43 5 293

(1) Amounts do not include associated interest payments.

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Operational Risk

As with all companies, we are subject to operational risk. Operational risk is the risk of loss due to human

error; inadequate or failed internal systems and controls; violations of, or noncompliance with, laws, rules,

regulations, prescribed practices, or ethical standards; and external influences such as market conditions, fraudulent

activities, disasters, and security risks. We continuously strive to strengthen our system of internal controls to ensure

compliance with laws, rules, and regulations, and to improve the oversight of our operational risk. For example, we

actively and continuously monitor cyber-attacks such as attempts related to eFraud and loss of sensitive customer

data. We evaluate internal systems, processes and controls to mitigate loss from cyber-attacks and, to date, have not

experienced any material losses.

To mitigate operational risks, we have established a senior management Operational Risk Committee and a

senior management Legal, Regulatory, and Compliance Committee. The responsibilities of these committees,

among other duties, include establishing and maintaining management information systems to monitor material risks

and to identify potential concerns, risks, or trends that may have a significant impact and ensuring that

recommendations are developed to address the identified issues. Both of these committees report any significant

findings and recommendations to the Risk Management Committee. Additionally, potential concerns may be

escalated to our ROC, as appropriate.

The goal of this framework is to implement effective operational risk techniques and strategies, minimize

operational and fraud losses, and enhance our overall performance.

Representation and Warranty Reserve

We primarily conduct our mortgage loan sale and securitization activity with FNMA and FHLMC. In

connection with these and other securitization transactions, we make certain representations and warranties that the

loans meet certain criteria, such as collateral type and underwriting standards. We may be required to repurchase

individual loans and / or indemnify these organizations against losses due to a loan not meeting the established

criteria. As part of the consumer portfolio review that was initiated during the 2013 third quarter (see Consumer

Credit section for description), we continue to evaluate representation and warranty exposure of loans sold with

servicing retained associated with borrowers who filed bankruptcy. We have a reserve for such losses and exposure,

which is included in accrued expenses and other liabilities. The reserves are estimated based on historical and

expected repurchase activity, average loss rates, and current economic trends. The level of mortgage loan repurchase

losses depends upon economic factors, investor demand strategies and other external conditions containing a level of

uncertainty and risk that may change over the life of the underlying loans. We currently do not have sufficient

information to estimate the range of reasonably possible loss related to representation and warranty exposure.

The tables below reflect activity in the representations and warranties reserve:

Table 30—Summary of Reserve for Representations and Warranties on Mortgage Loans Serviced for Others Year Ended December 31, (dollar amounts in thousands) 2013 2012 2011 2010 2009 Reserve for representations and warranties, beginning of

year $ 28,588 $ 23,218 $ 20,171 5,916 $ 5,270 Assumed reserve for representations and warranties — — — 7,000 — Reserve charges (12,513 ) (10,628 ) (8,711 ) (9,012 ) (2,516 ) Provision for representations and warranties 5,952 15,998 11,758 16,267 3,162

Reserve for representations and warranties, end of year $ 22,027 $ 28,588 $ 23,218 $ 20,171 $ 5,916

Table 31—Mortgage Loan Repurchase Statistics

Year Ended December 31, (dollar amounts in thousands) 2013 2012 2011 2010 Number of loans sold 22,240 26,345 22,146 28,744 Amount of loans sold (UPB) $ 3,255,732 $ 4,105,243 $ 3,170,903 $ 4,309,247 Number of loans repurchased (1) 159 219 128 399 Amount of loans repurchased (UPB)

(1) $ 18,102 $ 29,123 $ 19,442 $ 61,754 Number of claims received 780 666 445 472 Successful dispute rate (2) 46 % 46 % 50 % 31 % Number of make whole payments (3) 167 167 72 95 Amount of make whole payments (3) $ 11,445 $ 9,432 $ 5,553 $ 7,679

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(1) Loans repurchased are loans that fail to meet the purchaser’s terms. (2) Successful disputes are a percent of close out requests. (3) Make whole payments are payments to reimburse for losses on foreclosed properties.

Compliance Risk

Financial institutions are subject to several laws, rules, and regulations at both the federal and state levels.

These broad-based mandates include, but are not limited to, expectations relating to anti-money laundering, lending

limits, client privacy, fair lending, and community reinvestment. Additionally, the volume and complexity of recent

regulatory changes have increased our overall compliance risk. As such, we utilize various resources to help ensure

expectations are met, including a team of compliance experts dedicated to ensuring our conformance with all

applicable laws, rules, and regulations. Our colleagues receive training for several broad-based laws and regulations

including, but not limited to, anti-money laundering and customer privacy. Additionally, colleagues engaged in

lending activities receive training for laws and regulations related to flood disaster protection, equal credit

opportunity, fair lending, and / or other courses related to the extension of credit. We set a high standard of

expectation for adherence to compliance management and seek to continuously enhance our performance.

Capital

(This section should be read in conjunction with the Regulatory Matters section included in Part 1, Item 1 and Note

14 of the Notes to Consolidated Financial Statements.)

The following table presents risk-weighted assets and other financial data necessary to calculate certain

financial ratios, including the Tier 1 common equity ratio, which we use to measure capital adequacy:

Table 32—Consolidated Capital Adequacy

December 31, (dollar amounts in millions) 2013 2012 2011 2010 2009 Consolidated capital calculations:

Common shareholders’ equity $ 5,713 $ 5,404 $ 5,032 $ 4,618 $ 3,648 Preferred shareholders’ equity 386 386 386 363 1,688

Total shareholders’ equity 6,099 5,790 5,418 4,981 5,336 Goodwill (444 ) (444 ) (444 ) (444 ) (444 ) Other intangible assets (93 ) (132 ) (175 ) (229 ) (289 ) Other intangible asset deferred tax

liability(1) 33 46 61 80 101

Total tangible equity(2) 5,595 5,260 4,860 4,388 4,704 Preferred shareholders’ equity (386 ) (386 ) (386 ) (363 ) (1,688 )

Total tangible common equity(2) $ 5,209 $ 4,874 $ 4,474 $ 4,025 $ 3,016

Total assets $ 59,476 $ 56,153 $ 54,451 $ 53,820 $ 51,555 Goodwill (444 ) (444 ) (444 ) (444 ) (444 ) Other intangible assets (93 ) (132 ) (175 ) (229 ) (289 ) Other intangible asset deferred tax

liability(1) 33 46 61 80 101

Total tangible assets(2) $ 58,972 $ 55,623 $ 53,893 $ 53,227 $ 50,923

Tier 1 capital $ 6,100 $ 5,741 $ 5,557 $ 5,022 $ 5,201 Preferred shareholders’ equity (386 ) (386 ) (386 ) (363 ) (1,688 ) Trust-preferred securities (299 ) (299 ) (532 ) (570 ) (570 ) REIT-preferred stock — (50 ) (50 ) (50 ) (50 )

Tier 1 common equity(2) $ 5,415 $ 5,006 $ 4,589 $ 4,039 $ 2,893

Risk-weighted assets (RWA) $ 49,690 $ 47,773 $ 45,891 $ 43,471 $ 42,816

Tier 1 common equity / RWA ratio(2) 10.90 % 10.48 % 10.00 % 9.29 % 6.76 % Tangible equity / tangible asset ratio(2) 9.49 9.46 9.02 8.24 9.24 Tangible common equity / tangible asset ratio(2) 8.83 8.76 8.30 7.56 5.92 Tangible common equity / RWA ratio(2) 10.48 10.20 9.75 9.26 7.04

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(1) Intangible assets are net of deferred tax liability and calculated assuming a 35% tax rate. (2) Tangible equity, Tier 1 common equity, tangible common equity, and tangible assets are non-GAAP financial

measures. Additionally, any ratios utilizing these financial measures are also non-GAAP. These financial

measures have been included as they are considered to be critical metrics with which to analyze and evaluate

financial condition and capital strength. Other companies may calculate these financial measures differently.

Our Tier 1 common equity risk-based ratio improved 42 basis points to 10.90% at December 31, 2013,

compared with 10.48% at December 31, 2012. This increase primarily reflected the increase in retained earnings,

partially offset by the repurchase of 16.7 million common shares and the impacts related to increased risk-weighted

assets.

The following table presents certain regulatory capital data at both the consolidated and Bank levels for the

past five years:

Table 33— Regulatory Capital Data At December 31, (dollar amounts in millions) 2013 2012 2011 2010 2009 Total risk-weighted assets Consolidated $ 49,690 $ 47,773 $ 45,891 $ 43,471 $ 42,816

Bank 49,609 47,676 45,651 43,281 43,149 Tier 1 risk-based capital Consolidated 6,100 5,741 5,557 5,022 5,201 Bank 5,682 5,003 4,245 3,683 2,873 Tier 2 risk-based capital Consolidated 1,139 1,187 1,221 1,263 1,030 Bank 838 1,091 1,508 1,866 1,907 Total risk-based capital Consolidated 7,239 6,928 6,778 6,285 6,231 Bank 6,520 6,094 5,753 5,549 4,780 Tier 1 leverage ratio Consolidated 10.67 % 10.36 % 10.28 % 9.41 % 10.09 % Bank 9.97 9.05 7.89 6.97 5.59 Tier 1 risk-based capital ratio Consolidated 12.28 12.02 12.11 11.55 12.15 Bank 11.45 10.49 9.30 8.51 6.66 Total risk-based capital ratio Consolidated 14.57 14.50 14.77 14.46 14.55 Bank 13.14 12.78 12.60 12.82 11.08

The increase in our consolidated Tier 1 risk-based capital ratios compared with December 31, 2012, primarily

reflected an increase in retained earnings, partially offset by the repurchase of 16.7 million common shares and the

impacts related to the payments of dividends.

Shareholders’ Equity

We generate shareholders’ equity primarily through earnings, net of dividends. Other potential sources of

shareholders’ equity include issuances of common and preferred stock. Our objective is to maintain capital at an

amount commensurate with our risk profile and risk tolerance objectives, to meet both regulatory and market

expectations, and to provide the flexibility needed for future growth and business opportunities. Shareholders’

equity totaled $6.1 billion at December 31, 2013, representing a $0.3 billion, or 5%, increase compared with

December 31, 2012, primarily due to an increase in retained earnings.

Dividends

We consider disciplined capital management as a key objective, with dividends representing one component.

Our strong capital ratios and expectations for continued earnings growth positions us to continue to actively explore

additional capital management opportunities.

On January 16, 2014, our board of directors declared a quarterly cash dividend of $0.05 per common share,

payable on April 1, 2014. Also, cash dividends of $0.05, $0.05, $0.05 and $0.04 per common share were declared on

October 17, 2013, July 18, 2013, April 17, 2013 and January 17, 2013, respectively. Our 2013 capital plan to the

FRB included the continuation of our current common dividend through the 2014 first quarter.

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On January 16, 2014, our board of directors also declared a quarterly cash dividend on our 8.50% Series A

Non-Cumulative Perpetual Convertible Preferred Stock of $21.25 per share. The dividend is payable on April 1,

2014. Cash dividends of $21.25 per share were also declared on October 17, 2013, July 18, 2013, April 17, 2013 and

January 17, 2013

On January 16, 2014, our board of directors also declared a quarterly cash dividend on our Floating Rate

Series B Non-Cumulative Perpetual Preferred Stock of $7.35 per share. The dividend is payable on April 1, 2014.

Also, cash dividends of $7.36, $7.42, $7.44 and $7.51 per share were declared on October 17, 2013, July 18,

2013, April 17, 2013 and January 17, 2013, respectively.

Share Repurchases

From time to time the board of directors authorizes the Company to repurchase shares of our common stock.

Although we announce when the board of directors authorizes share repurchases, we do not give any public notice

before we repurchase our shares. Future stock repurchases may be private or open-market repurchases, including

block transactions, accelerated or delayed block transactions, forward transactions, and similar transactions. Various

factors determine the amount and timing of our share repurchases, including our capital requirements, the number of

shares we expect to issue for employee benefit plans and acquisitions, market conditions (including the trading price

of our stock), and regulatory and legal considerations, including the FRB’s response to our capital plan.

Our board of directors has authorized a share repurchase program consistent with our capital plan of the

potential repurchase of up to $227.0 million of common stock. During 2013, we repurchased 16.7 million common

shares at a weighted average share price of $7.46. Huntington has the ability to repurchase up to $136 million of

additional shares of common stock through the first quarter of 2014. We intend to continue disciplined repurchase

activity consistent with our annual capital plan, our capital return objectives, and market conditions.

BUSINESS SEGMENT DISCUSSION

Overview

We have four major business segments: Retail and Business Banking; Regional and Commercial Banking;

Automobile Finance and Commercial Real Estate; and Wealth Advisors, Government Finance, and Home Lending.

A Treasury / Other function also includes our insurance business and other unallocated assets, liabilities, revenue,

and expenses. While this section reviews financial performance from a business segment perspective, it should be

read in conjunction with the Discussion of Results of Operations, Note 25 of the Notes to Consolidated Financial

Statements, and other sections for a full understanding of our consolidated financial performance.

Business segment results are determined based upon our management reporting system, which assigns balance

sheet and income statement items to each of the business segments. The process is designed around our

organizational and management structure and, accordingly, the results derived are not necessarily comparable with

similar information published by other financial institutions.

Revenue Sharing

Revenue is recorded in the business segment responsible for the related product or service. Fee sharing is

recorded to allocate portions of such revenue to other business segments involved in selling to, or providing service

to, customers. Results of operations for the business segments reflect these fee sharing allocations.

Expense Allocation

The management accounting process that develops the business segment reporting utilizes various estimates

and allocation methodologies to measure the performance of the business segments. Expenses are allocated to

business segments using a two-phase approach. The first phase consists of measuring and assigning unit costs

(activity-based costs) to activities related to product origination and servicing. These activity-based costs are then

extended, based on volumes, with the resulting amount allocated to business segments that own the related products.

The second phase consists of the allocation of overhead costs to all four business segments from Treasury / Other.

We utilize a full-allocation methodology, where all Treasury / Other expenses, except those related to our insurance

business, reported Significant Items (except for the goodwill impairment), and a small amount of other residual

unallocated expenses, are allocated to the four business segments.

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Funds Transfer Pricing (FTP)

We use an active and centralized FTP methodology to attribute appropriate income to the business segments.

The intent of the FTP methodology is to transfer interest rate risk from the business segments by providing matched

duration funding of assets and liabilities. The result is to centralize the financial impact, management, and reporting

of interest rate risk in the Treasury / Other function where it can be centrally monitored and managed. The Treasury

/ Other function charges (credits) an internal cost of funds for assets held in (or pays for funding provided by) each

business segment. The FTP rate is based on prevailing market interest rates for comparable duration assets (or

liabilities).

Net Income by Business Segment

The segregation of net income by business segment for the past three years is presented in the following table:

Table 34—Net Income by Business Segment

Year ended December 31, (dollar amounts in thousands) 2013 2012 2011 Retail and Business Banking $ 67,895 $ 89,183 $ 175,395 Regional and Commercial Banking 117,720 129,112 109,846 AFCRE 202,901 201,203 186,151 WGH 64,748 93,534 25,883 Treasury / Other 185,477 127,990 45,338

Net income $ 638,741 $ 641,022 $ 542,613

Treasury / Other

The Treasury / Other function includes revenue and expense related to our insurance business, and assets,

liabilities, and equity not directly assigned or allocated to one of the four business segments. Other assets include

investment securities and bank owned life insurance. The financial impact associated with our FTP methodology, as

described above, is also included.

Net interest income includes the impact of administering our investment securities portfolios and the net

impact of derivatives used to hedge interest rate sensitivity. Noninterest income includes insurance income,

miscellaneous fee income not allocated to other business segments, such as bank owned life insurance income and

any investment security and trading asset gains or losses. Noninterest expense includes any insurance-related

expenses, as well as certain corporate administrative, merger, and other miscellaneous expenses not allocated to

other business segments. The provision for income taxes for the business segments is calculated at a statutory 35%

tax rate, though our overall effective tax rate is lower. As a result, Treasury / Other reflects a credit for income taxes

representing the difference between the lower actual effective tax rate and the statutory tax rate used to allocate

income taxes to the business segments.

The $57.5 million, or 45%, year over year increase in net income for Treasury/Other was primarily the result

of the FTP process described above. The FTP process produced increased net income for Treasury/Other as the

sustained low market interest rate environment, combined with a shift in funding mix to include additional

wholesale sources, resulted in lower FTP credits paid to the business segments.

Optimal Customer Relationship (OCR)

Our OCR initiative is a cross-business segment strategy designed to increase overall customer profitability and

retention by deepening product and service penetration to consumer and commercial customers. We believe this can

be accomplished by taking our broad array of services and products and delivering them through a rigorous and

disciplined sales management process that is consistent across all business segments and regions. It is also supported

by robust sales and cross-referral technology.

OCR was introduced in late 2009. Through 2010, much of the effort was spent on defining processes, sales

training, and systems development to fully capture and measure OCR performance metrics. In 2011, we introduced

OCR-related metrics for commercial relationships, which complements the previously disclosed consumer OCR-

related metrics. In 2013, we continue to experience strong consumer household and commercial relationship growth.

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CONSUMER OCR PERFORMANCE

For consumer OCR performance there are three key performance metrics: (1) the number of checking account

households, (2) the number of product penetration per consumer checking household, and (3) the revenue generated

from the consumer households of all business segments.

The growth in consumer checking account number of households is a result of both new sales of checking

accounts and improved retention of existing checking account households. The overall objective is to grow the

number of households, along with an increase in product penetration.

We use the checking account since it typically represents the primary banking relationship product. We count

additional services by type, not number of services. For example, a household that has one checking account and one

mortgage, we count as having two services. A household with four checking accounts, we count as having one

service. The household relationship utilizing four or more services is viewed to be more profitable and loyal. The

overall objective, therefore, is to decrease the percentage of 1-3 services per consumer checking account household,

while increasing the percentage of those with 4 or more services. Since we have made significant strides toward

having the vast majority of our customers with 4+ services, during the 2013 second quarter, we changed our

measurement to 6+ services. We are holding ourselves to a higher performance standard.

The following table presents consumer checking account household OCR metrics:

Table 35—Consumer Checking Household OCR Cross-sell Report

Year ended December 31 2013 2012 Number of households 1,324,971 1,228,812 Product Penetration by Number of Services

1 Service 3.0 % 3.1 % 2-3 Services 19.2 18.6 4-5 Services 30.2 31.1 6+ Services 47.6 47.2 Total revenue (in millions) $ 948.1 $ 983.4

Our emphasis on cross-sell, coupled with customers increasingly being attracted by the benefits offered

through our “Fair Play” banking philosophy with programs such as 24-Hour Grace® on overdrafts and Asterisk-Free

Checking™, are having a positive effect. The percent of consumer households with 6+ services at the end of 2013

was 47.6%, up from 47.2% at the end of last year. For 2013, consumer checking account households grew 8%. Total

consumer checking account household revenue in 2013 was $948.1 million, down $35.3 million, or 4%, from 2012.

Household revenue was negatively impacted by the February 2013 implementation of a new posting order for

consumer transactions.

COMMERCIAL OCR PERFORMANCE

For commercial OCR performance, there are three key performance metrics: (1) the number of commercial

relationships, (2) the number of services penetration per commercial relationship, and (3) the revenue generated.

Commercial relationships include relationships from all business segments.

The growth in the number of commercial relationships is a result of both new sales of checking accounts and

improved retention of existing commercial accounts. The overall objective is to grow the number of relationships,

along with an increase in product service distribution.

The commercial relationship is defined as a business banking or commercial banking customer with a

checking account relationship. We use this metric because we believe that the checking account anchors a business

relationship and creates the opportunity to increase our cross-sell. Multiple sales of the same type of service are

counted as one service, the same as consumer.

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The following table presents commercial relationship OCR metrics:

Table 36—Commercial Relationship OCR Cross-sell Report

Year ended December 31, 2013 2012 2011 Commercial Relationships 159,716 151,083 138,357 Product Penetration by Number of Services

1 Service 21.1 % 24.6 % 28.4 % 2-3 Services 41.4 40.4 40.2 4+ Services 37.5 35.0 31.4 Total revenue (in millions) $ 738.5 $ 724.4 $ 675.2

By focusing on targeted relationships we are able to achieve higher product service penetration among our

commercial relationships, and leverage these relationships to generate a deeper share of wallet. The percent of

commercial relationships utilizing 4 or more services at the end of 2013 was 37.5%, up from 35.0% from the prior

year. For 2013, commercial relationships grew 6%. Total commercial relationship revenue in 2013 was $738.5

million, up $14.1 million, or 2%, from 2012.

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Retail and Business Banking

Table 37—Key Performance Indicators for Retail and Business Banking Change from 2012 (dollar amounts in thousands unless otherwise noted) 2013 2012 Amount Percent 2011 Net interest income $ 813,871 $ 870,146 $ (56,275 ) (6 )% $ 932,385 Provision for credit losses 137,898 136,061 1,837 1 120,018 Noninterest income 392,797 385,498 7,299 2 405,265 Noninterest expense 964,316 982,378 (18,062 ) (2 ) 947,794 Provision for income taxes 36,559 48,022 (11,463 ) (24 ) 94,443

Net income $ 67,895 $ 89,183 $ (21,288 ) (24 )% $ 175,395

Number of employees (average full-time

equivalent) 5,220 5,084 136 3 % 4,971 Total average assets (in millions) $ 14,408 $ 14,307 $ 101 1 $ 13,453 Total average loans/leases (in millions) 12,699 12,697 2 — 12,041 Total average deposits (in millions) 28,323 28,070 253 1 28,507 Net interest margin 2.89 % 3.11 % (0.22 )% (7 ) 3.26 % NCOs $ 125,468 $ 158,577 $ (33,109 ) (21 ) $ 170,199 NCOs as a % of average loans and leases 0.99 % 1.25 % (0.26 )% (21 ) 1.41 % Return on average common equity 4.7 6.3 (1.6 ) (25 ) 12.4

2013 vs. 2012

Retail and Business Banking reported net income of $67.9 million in 2013. This was a decrease of $21.3

million, or 24%, compared to the year-ago period. The decrease in net income reflected a combination of factors

described below.

The decrease in net interest income from the year-ago period reflected:

• 22 basis point decrease in net interest margin, primarily due to a 24 basis point decline in deposit spreads

resulting from declining rates and reduced FTP rates.

Partially offset by:

• $0.3 billion, or 1%, increase in total average deposit balances.

• 6 basis points increase in loan spreads, primarily due to a reduction in FTP rates assigned to loans.

The increase in total average deposits from the year-ago period reflected:

• $1.1 billion, or 15%, increase in money market deposits.

• $0.7 billion, or 7%, increase in total demand deposits.

Partially offset by:

• $1.6 billion, or 27%, decrease in core certificate of deposits, primarily due to the continued focus on

product mix in reducing the overall cost of deposits.

The increase in the provision for credit losses from the year-ago period reflected:

• $1.8 million, or 1%, increase, primarily due to growth of the new consumer credit card balances.

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The increase in noninterest income from the year-ago period reflected:

• $12.3 million, or 6%, increase in deposit service charge income, primarily due to strong household and

account growth, offsetting a $27.5 million reduction in service charge revenue that resulted from our

change in check posting order early in 2013.

• $10.3 million, or 13%, increase in electronic banking income, primarily due to strong consumer household

growth combined with increased consumer debit card activity.

Partially offset by:

• $10.0 million, or 17%, decrease in fee share revenue, primarily related to mortgage banking.

• $0.9 million, or 6%, decrease in gain on sale of loans.

The decrease in noninterest expense from the year-ago period reflected:

• $15.0 million, or 7%, decrease in personnel expenses in the branch network, primarily due to franchise

repositioning expense initiatives. In 2013, we continued initiatives to improve teller efficiency and install

new deposit automation ATM’s.

• $11.9 million, or 20%, reduction in marketing expense, primarily due to lower levels of advertising and

reduced promotional offers.

• $4.2 million, or 13%, reduction in amortization of intangibles.

• $4.0 million, or 51%, reduction in professional services, primarily due to a decrease in outside consultant

expenses and legal services related to collections.

Partially offset by:

• $21.1 million, or 5%, increase in other expenses, primarily due to an increase in allocated overhead.

2012 vs. 2011

Retail and Business Banking reported net income of $89.2 million in 2012, compared with a net income of

$175.4 million in 2011. The $86.2 million decrease included a $62.2 million, or 7%, decrease in net interest income,

a $34.6 million, or 4%, increase in noninterest expense, a $19.8 million, or 5%, decrease in noninterest income, and

a $16.0 million, or 13%, decrease in the provision for credit losses, partially offset by a $46.4 million, or 49%,

decrease in the provision for income taxes.

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Regional and Commercial Banking

Table 38—Key Performance Indicators for Regional and Commercial Banking Change from 2012 (dollar amounts in thousands unless otherwise noted) 2013 2012 Amount Percent 2011 Net interest income $ 276,480 $ 273,869 $ 2,611 1 % $ 244,392 Provision for credit losses 16,982 10,689 6,293 59 11,013 Noninterest income 140,639 138,454 2,185 2 127,315 Noninterest expense 219,029 203,000 16,029 8 191,701 Provision for income taxes 63,388 69,522 (6,134 ) (9 ) 59,147

Net income $ 117,720 $ 129,112 $ (11,392 ) (9 )% $ 109,846

Number of employees (average full-time

equivalent) 668 630 38 6 % 592 Total average assets (in millions) $ 12,008 $ 10,961 $ 1,047 10 $ 9,283 Total average loans/leases (in millions) 11,185 10,076 1,109 11 8,326 Total average deposits (in millions) 5,871 5,324 547 10 3,882 Net interest margin 2.59 % 2.80 % (0.21 )% (8 ) 2.95 % NCOs $ (2,927 ) $ 35,217 $ (38,144 ) (108 ) $ 39,568 NCOs as a % of average loans and leases (0.03 )% 0.35 % (0.38 )% (109 ) 0.48 % Return on average common equity 10.6 14.8 (4.2 ) (28 ) 15.1

2013 vs. 2012

Regional and Commercial Banking reported net income of $117.7 million in 2013. This was a decrease of

$11.4 million, or 9%, compared to the year-ago period. The decrease in net income reflected a combination of

factors described below.

The increase in net interest income from the year-ago period reflected:

• $1.1 billion, or 11%, increase in total average loans and leases.

• $0.5 billion, or 10%, increase in average total deposits.

Partially offset by:

• 21 basis point decrease in the net interest margin, primarily due to compressed deposit spreads resulting from declining rates and reduced FTP rates.

The increase in total average loans and leases from the year-ago period reflected:

• $0.4 billion, or 18%, increase in the equipment finance portfolio average balance, primarily due to our

focus on developing vertical strategies in business aircraft, rail industry, lender finance, municipal, and

syndications.

• $0.4 billion, or 39%, increase in the healthcare portfolio average balance, primarily due to a strategic focus

on the banking needs of the healthcare industry, specifically targeting alternate site real estate, seniors’ real

estate, medical technology, community hospitals, metro hospitals, and health care services.

• $0.3 billion, or 7%, in the middle market portfolio average balance, primarily in our major metro markets

overcoming a $0.1 billion, or 4%, reduction in the funded balances of lines of credit due to a reduction in

the average utilization rate.

The increase in total average deposits from the year-ago period reflected:

• $0.5 billion, or 10%, increase in core deposits, primarily due to a $0.3 billion, or 14%, increase in money market account deposits and a $0.2 billion, or 8%, increase in noninterest-bearing demand deposits.

Regional and Commercial Banking initiated a strategic focus to gain a deeper share of wallet with certain

key relationships. This focus was specifically targeted to liquidity solutions for these customers and

resulted in significant deposit growth. Middle market accounts, such as not-for-profit universities and

healthcare, contributed $0.4 billion of the balance growth, while large corporate accounts contributed $0.1

billion.

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The increase in the provision for credit losses from the year-ago period reflected:

• Provision expense increased, as a result of our enhanced commercial risk rating system that increases the granularity of the risk ratings resulting in an increase in the portfolio risk rating profile. However, there

was a net reduction in loss given default rates within the C&I portfolio due to the incorporation of current

collateral values in the risk determination process.

Partially offset by:

• A continued improvement in the credit quality of the portfolio, as evidenced by a 38 basis point reduction

in NCOs and a $23 million, or 59% decline in non-performing assets.

The increase in noninterest income from the year-ago period reflected:

• $6.3 million, or 25%, increase in commitment and other loan fees, primarily due to increased syndications

activity.

• $1.1 million, or 100%, increase in the sale of Huntington Investment Company related products.

Partially offset by:

• $4.1 million, or 10%, decrease in deposit service charge income and other Treasury Management related

revenue, primarily due to the impact of earnings credits by our customers.

• $1.8 million, or 4%, decrease in capital markets related income attributed to a $3.3 million, or 15%,

decrease in sales of customer interest rate protection products, partially offset by a $1.0 million, or 9%

increase in foreign exchange revenue.

The increase in noninterest expense from the year-ago period reflected:

• $7.2 million, or 31%, increase in allocated overhead.

• $6.5 million, or 6%, increase in personnel costs, primarily due to our strategic investments in our core

footprint markets, vertical strategies, and product capabilities.

• $2.7 million, or 31%, increase in outside data processing and other services, primarily due to Treasury

Management products and services, such as the new Commercial Card product implemented in 2013.

• $1.1 million, or 35%, increase in equipment expense, primarily due to the increased deployment of

Treasury Management remote deposit capture units, as well as investments in a Treasury Management

payables project, commodities system, and syndications system.

Partially offset by:

• $2.4 million, or 22%, decrease in credit administration related expenses, reflecting the continued

improvement in the commercial loan portfolio, as evidenced by a 41% reduction in the average balance of

the SAD portfolio compared to the year ago period.

2012 vs. 2011

Regional and Commercial Banking reported net income of $129.1 million in 2012, compared with a net

income of $109.8 million in 2011. The $19.3 million increase included a $29.5 million, or 12%, increase in net

interest income, a $11.1 million, or 9%, increase in noninterest income, and a $0.3 million, or 3%, decrease in the

provision for credit losses, partially offset by a $11.3 million, or 6%, increase in noninterest expense.

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Automobile Finance and Commercial Real Estate

Table 39—Key Performance Indicators for Automobile Finance and Commercial Real Estate Change from 2012 (dollar amounts in thousands unless otherwise noted) 2013 2012 Amount Percent 2011 Net interest income $ 356,488 $ 356,442 $ 46 — % $ 364,449 Provision for credit losses (71,312 ) (22,962 ) (48,350 ) 211 (8,939 ) Noninterest income 34,099 84,619 (50,520 ) (60 ) 77,623 Noninterest expense 149,744 154,480 (4,736 ) (3 ) 164,626 Provision for income taxes 109,254 108,340 914 1 100,234

Net income $ 202,901 $ 201,203 $ 1,698 1 % $ 186,151

Number of employees (average full-time

equivalent) 270 271 (1 ) — % 278 Total average assets (in millions) $ 12,654 $ 12,424 $ 230 2 $ 13,025 Total average loans/leases (in millions) 12,062 11,380 682 6 12,985 Total average deposits (in millions) 992 889 103 12 786 Net interest margin 2.81 % 2.84 % (0.03 )% (1 ) 2.74 % NCOs $ 31,970 $ 80,244 $ (48,274 ) (60 ) $ 153,715 NCOs as a % of average loans and leases 0.27 % 0.71 % (0.44 )% (62 ) 1.18 % Return on average common equity 38.2 33.9 4.3 13 27.3

2013 vs. 2012

AFCRE reported net income of $202.9 million in 2013. This was an increase of $1.7 million, or 1%,

compared to the year-ago period. The increase in net income reflected a combination of factors described below.

The increase in net interest income from the year-ago period reflected:

• $0.7 billion, or 6%, increase in average loans and leases.

Partially offset by:

• $0.6 billion, or 78%, decrease in average loans held for sale related to automobile loan securitization

activities.

• 3 basis point decrease in the net interest margin.

The increase in total average loans and leases from the year-ago period reflected:

• A $1.2 billion, or 25%, increase in automobile loans. Indirect automobile loan originations totaled $4.2

billion, up 5% from 2012.

• $0.2 billion, or 8%, increase in automobile floor plan and other commercial loans.

Partially offset by:

• $0.6 billion, or 14%, decrease in commercial real estate loans.

The decrease in the reduction in allowance for credit losses from the year-ago period reflected:

• A $48.3 million, or 60% decrease in net charge-offs, primarily due to a net overall improvement in the real

estate market. The market improvement is reflected in both the number of defaults and the LGD rates,

which are driven primarily by real estate recovery rates.

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The decrease in noninterest income from the year-ago period reflected:

• $42.4 million, or 100%, decrease in gains on sales of loans, primarily due to the securitization and sale

totaling $2.5 billion of indirect auto loans during 2012, with no similar transactions occurring in 2013.

• $8.2 million, or 80%, decrease in operating lease income, primarily due to the continued runoff of that

portfolio as we exited that business at the end of 2008.

The decrease in noninterest expense from the year-ago period reflected:

• $6.3 million, or 81%, decrease in operating lease expense, primarily due to the continued runoff of that

portfolio.

2012 vs. 2011

AFCRE reported net income of $201.2 million in 2012, compared with a net income of $186.2 million in

2011. The $15.1 million increase included a $10.1 million, or 6%, decrease in noninterest expense, a $14.0 million,

or 157%, decrease in the provision for credit losses, partially offset by a $8.0 million, or 2%, decrease in net interest

income.

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Wealth Advisors, Government Finance, and Home Lending

Table 40—Key Performance Indicators for Wealth Advisors, Government Finance, and Home Lending Change from 2012 (dollar amounts in thousands unless otherwise noted) 2013 2012 Amount Percent 2011 Net interest income $ 172,033 $ 192,681 $ (20,648 ) (11 )% $ 199,536 Provision for credit losses 6,477 23,600 (17,123 ) (73 ) 51,967 Noninterest income 299,588 351,057 (51,469 ) (15 ) 248,764 Noninterest expense 365,531 376,239 (10,708 ) (3 ) 356,513 Provision for income taxes 34,865 50,365 (15,500 ) (31 ) 13,937

Net income $ 64,748 $ 93,534 $ (28,786 ) (31 )% $ 25,883

Number of employees (average full-time

equivalent) 2,161 2,110 51 2 % 2,090 Total average assets (in millions) $ 7,516 $ 7,610 $ (94 ) (1 ) $ 6,778 Total average loans/leases (in millions) 5,860 5,994 (134 ) (2 ) 5,437 Total average deposits (in millions) 9,714 9,711 3 — 8,134 Net interest margin 1.75 % 1.87 % (0.12 )% (6 ) 2.16 % NCOs $ 27,415 $ 43,038 $ (15,623 ) (36 ) $ 57,485 NCOs as a % of average loans and leases 0.47 % 0.72 % (0.25 )% (35 ) 1.06 % Return on average common equity 9.0 12.8 (3.8 ) (30 ) 3.8 Mortgage banking origination volume (in

millions) $ 4,418 $ 4,833 $ (415 ) (9 ) $ 3,921

Noninterest income shared with other business

segments(1) 39,357 46,744 (7,387 ) (16 ) 42,761 Total assets under management (in billions)—

eop 16.7 15.9 0.8 5 14.6 Total trust assets (in billions)—eop 80.9 73.9 7.0 9 59.3

eop—End of Period. (1)

Amount is not included in noninterest income reported above.

2013 vs. 2012

WGH reported net income of $64.7 million in 2013. This was a decrease of $28.8 million, or 31%, when

compared to the year-ago period. The decrease in net income reflected a combination of factors described below.

The decrease in net interest income from the year-ago period reflected:

• 12 basis point decrease in the net interest margin, primarily due to compressed deposit spreads resulting from declining rates and reduced FTP rates.

• $0.1 billion, or 2%, decrease in average loans and leases.

The decrease in provision for credit losses reflected:

• $20.3 million, or 8%, decrease in delinquencies.

• $15.4 million, or 10%, decrease in classified assets.

• $15.6 million, or 36%, decline in NCOs.

The decrease in noninterest income from the year-ago period reflected:

• $58.8 million, or 37%, decrease in mortgage banking income primarily due to lower production volumes, a

higher percentage of mortgages retained on the balance sheet, and narrower spread on production.

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Partially offset by:

• $6.7 million, or 74%, increase in other income, primarily due to a gain on sale of certain Low Income

Housing Tax Credit investments.

• $1.2 million, or 14%, increase in service charges on deposit accounts, primarily due to increased fees

related to several high check volume commercial accounts.

The decrease in noninterest expense from the year-ago period reflected:

• $4.7 million, or 5%, decrease in other expenses, primarily due to lower mortgage repurchase expense.

• $3.9 million, or 11%, decrease in outside data processing and other services expense, as we continue to

invest in technology supporting our products, services, and continuous improvement initiatives.

Partially offset by:

• $1.9 million, or 1%, increase in personnel costs.

2012 vs. 2011

WGH reported net income of $93.5 million in 2012, compared with a net income of $25.9 million in 2011.

The $67.6 million increase included a $102.3 million, or 41%, increase in noninterest income, a $28.4 million, or

55%, decrease in the provision for credit losses partially offset by a $19.7 million, or 6% increase in noninterest

expense and a $6.9 million, or 3%, decrease in net interest income.

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RESULTS FOR THE FOURTH QUARTER

Earnings Discussion

In the 2013 fourth quarter, we reported net income of $157.8 million, a decrease of $9.5 million, or 6%, from

the 2012 fourth quarter, as a $51.0 million, or 17%, decrease in noninterest income total revenue more than offset a

$24.6 million, or 5%, decrease in noninterest expense and $15.1 million, or 38%, decrease in the provision for credit

losses.

Table 41—Significant Items Influencing Earnings Performance Comparison (dollar amounts in millions, except per share amounts)

Impact(1) Three Months Ended: Amount EPS(2) December 31, 2013—GAAP net income $ 157.8 $ 0.18

Franchise repositioning related expense(3) (6.7 ) (0.01 ) December 31, 2012—GAAP net income $ 167.3 $ 0.19

(1)

Favorable (unfavorable) impact on GAAP earnings; pretax unless otherwise noted. (2)

After-tax. EPS is reflected on a fully diluted basis. (3)

Pretax

Net Interest Income / Average Balance Sheet

FTE net interest income of $438.8 million was relatively unchanged from the year-ago quarter, reflecting a

$2.3 billion, or 5%, increase in average earnings assets offset by a 17 basis point decrease in NIM.

The following table presents the $2.7 billion, or 7%, increase in average total loans and leases:

Table 42—Average Loans/Leases—2013 Fourth Quarter vs. 2012 Fourth Quarter

Fourth Quarter Change (dollar amounts in millions) 2013 2012 Amount Percent Average Loans/Leases

Commercial and industrial $ 17,671 $ 16,507 $ 1,164 7 % Commercial real estate 4,904 5,473 (569 ) (10 )

Total commercial 22,575 21,980 595 3 Automobile 6,502 4,486 2,016 45 Home equity 8,346 8,345 1 — Residential mortgage 5,331 5,155 176 3 Other consumer 385 431 (46 ) (11 )

Total consumer 20,564 18,417 2,147 12

Total loans/leases $ 43,139 $ 40,397 $ 2,742 7 %

The increase in average total loans and leases reflected:

• $1.2 billion, or 7%, increase in average C&I loans and leases. This reflected the continued growth within

the middle market healthcare vertical, equipment finance, and dealer floorplan.

• $2.0 billion, or 45%, increase in average on balance sheet automobile loans, as the growth in originations,

while below industry levels, remained strong and our investments in the Northeast and upper Midwest

continued to grow as planned.

Partially offset by:

• $0.6 billion, or 10%, decrease in average CRE loans, as acceptable returns for new originations were

balanced against internal concentration limits and increased competition for projects sponsored by high

quality developers.

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The following table details the $7.0 million, or less than 1%, increase in average total deposits:

Table 43—Average Deposits—2013 Fourth Quarter vs. 2012 Fourth Quarter Fourth Quarter Change (dollar amounts in millions) 2013 2012 Amount Percent Average Deposits

Demand deposits: noninterest-bearing $ 13,337 $ 13,121 $ 216 2 % Demand deposits: interest-bearing 5,755 5,843 (88 ) (2 )

Total demand deposits 19,092 18,964 128 1 Money market deposits 16,827 14,749 2,078 14 Savings and other domestic deposits 4,912 4,960 (48 ) (1 ) Core certificates of deposit 3,916 5,637 (1,721 ) (31 )

Total core deposits 44,747 44,310 437 1 Other deposits 2,027 2,457 (430 ) (18 )

Total deposits $ 46,774 $ 46,767 $ 7 — %

The increase in average total deposits from the year-ago quarter reflected:

Average core certificates of deposit declined primarily due to the strategic focus on changing the funding

sources to no-cost demand deposits and low-cost money market deposits. This strategy, along with a strategic focus

on customer growth and increased share of wallet among both consumer and commercial customers resulted an

increase in money market deposits.

Provision for Credit Losses

The provision for credit losses in the 2013 fourth quarter was $24.3 million, down $15.1 million, or 38%,

from the year-ago quarter, reflecting a reduction of the ACL as a result of the improvement in the underlying credit

quality of the loan portfolio. The 2013 fourth quarter provision for credit losses was $22.1 million less than total

NCOs, reflecting the resolution of problem loans for which reserves had been previously established.

Noninterest Income

Table 44—Noninterest Income—2013 Fourth Quarter vs. 2012 Fourth Quarter

Fourth Quarter Change (dollar amounts in thousands) 2013 2012 Amount Percent

Service charges on deposit accounts $ 69,992 $ 68,083 $ 1,909 3 % Mortgage banking income 24,327 61,711 (37,384 ) (61 ) Trust services 30,711 31,388 (677 ) (2 ) Electronic banking 24,251 21,011 3,240 15 Insurance income 15,556 17,268 (1,712 ) (10 ) Brokerage income 15,116 17,415 (2,299 ) (13 ) Bank owned life insurance income 13,816 13,767 49 — Capital markets fees 12,332 12,918 (586 ) (5 )

Gain on sale of loans 7,144 20,690 (13,546 ) (65 ) Securities gains (losses) 1,239 863 376 44 Other income 32,144 32,537 (393 ) (1 )

Total noninterest income $ 246,628 $ 297,651 $ (51,023 ) (17 )%

Noninterest income decreased $51.0 million, or 17%, from the year-ago quarter, primarily reflecting a $37.4

million, or 61%, decrease in mortgage banking income and a $17 million automobile loan securitization gain in the

year-ago quarter.

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Noninterest Expense (This section should be read in conjunction with Significant Item 2.)

Table 45—Noninterest Expense—2013 Fourth Quarter vs. 2012 Fourth Quarter

Fourth Quarter Change (dollar amounts in thousands) 2013 2012 Amount Percent

Personnel costs $ 249,554 $ 253,952 $ (4,398 ) (2 )% Outside data processing and other services 51,071 48,699 2,372 5 Net occupancy 31,983 29,008 2,975 10 Equipment 28,775 26,580 2,195 8 Marketing 13,704 16,456 (2,752 ) (17 ) Deposit and other insurance expense 10,056 16,327 (6,271 ) (38 ) Amortization of intangibles 10,320 11,647 (1,327 ) (11 ) Professional services 11,567 22,514 (10,947 ) (49 ) Other expense 38,979 45,445 (6,466 ) (14 )

Total noninterest expense $ 446,009 $ 470,628 $ (24,619 ) (5 )%

Number of employees (average full-time

equivalent) 11,765 11,789 (24 ) — %

Noninterest expense decreased $24.6 million, or 5%, reflecting the Company’s continued disciplined expense

management. The 2013 fourth quarter also included $6.7 million of franchise repositioning expense related to the

consolidation of 22 branches, severance, and facilities optimization.

Provision for Income Taxes

The provision for income taxes in the 2013 fourth quarter was $49.1 million and $54.3 million in the 2012

fourth quarter. The effective tax rate in the 2013 fourth quarter was 23.7% compared to 24.5% in the 2012 fourth

quarter. At December 31, 2013 and 2012 we had a net deferred tax asset of $137.6 million and $203.9 million,

respectively.

Credit Quality

Credit quality performance in the 2013 fourth quarter reflected continued improvement in the overall loan

portfolio relating to NCO activity, as well as in key credit quality metrics, including a 21% decline in NPAs.

NCOs

Total NCOs for the 2013 fourth quarter were $46.4 million, or an annualized 0.43% of average total loans and

leases. NCOs in the year-ago quarter were $70.1 million, or an annualized 0.69%. These declines reflected

improvement in the overall credit quality of the portfolio.

NALs

Total NALs were $322.1 million at December 31, 2013, and represented 0.75% of total loans and leases. This

was down $85.6 million, or 21%, from $407.6 million, or 1.00%, of total loans and leases at the end of the year ago

period. This decrease primarily reflected substantial improvement in the C&I and CRE portfolio, partially offset by

an increase in consumer NALs resulting from Chapter 7 bankruptcy consumer loans.

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ACL

(This section should be read in conjunction with Note 3 of the Notes to Consolidated Financial Statements.)

ACL as a percent of total loans and leases at December 31, 2013, was 1.65%, down from 1.99% at

December 31, 2012. We believe the decline in the ratio is appropriate given the continued improvement in the risk

profile of our loan portfolio. Further, we believe that early identification of loans with changes in credit metrics and

aggressive action plans for these loans, combined with originating high quality new loans will contribute to

continued improvement in our key credit quality metrics.

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Table 46—Selected Quarterly Income Statement Data(1)

2013 (dollar amounts in thousands, except per share amounts) Fourth Third Second First

Interest income $ 469,824 $ 462,912 $ 462,582 $ 465,319 Interest expense 39,175 38,060 37,645 41,149

Net interest income 430,649 424,852 424,937 424,170 Provision for credit losses 24,331 11,400 24,722 29,592

Net interest income after provision for credit

losses 406,318 413,452 400,215 394,578 Total noninterest income 246,628 250,503 248,655 252,209 Total noninterest expense 446,009 423,336 445,865 442,793

Income before income taxes 206,937 240,619 203,005 203,994 Provision for income taxes 49,114 62,132 52,354 52,214

Net income $ 157,823 $ 178,487 $ 150,651 $ 151,780 Dividends on preferred shares 7,965 7,967 7,967 7,970

Net income applicable to common shares $ 149,858 $ 170,520 $ 142,684 $ 143,810

Common shares outstanding

Average—basic 830,590 830,398 834,730 841,103

Average—diluted(2) 842,324 841,025 843,840 848,708 Ending 830,963 830,145 829,675 838,758 Book value per common share $ 6.88 $ 6.72 $ 6.51 $ 6.53 Tangible book value per common share(3) 6.27 6.10 5.88 5.91

Per common share

Net income—basic $ 0.18 $ 0.21 $ 0.17 $ 0.17 Net income—diluted 0.18 0.20 0.17 0.17 Cash dividends declared 0.05 0.05 0.05 0.04

Common stock price, per share

High (4) $ 9.73 $ 8.78 $ 7.96 $ 7.55

Low(4) 8.04 7.90 6.82 6.48

Close 9.65 8.26 7.87 7.37 Average closing price 8.98 8.45 7.46 7.07

Return on average total assets 1.09 % 1.27 % 1.08 % 1.10 % Return on average common shareholders’

equity 10.5 12.3 10.4 10.7 Return on average tangible common

shareholders’ equity(5) 12.1 14.1 12.0 12.4 Efficiency ratio(6) 63.7 60.6 64.0 63.3 Effective tax rate 23.7 25.8 25.8 25.6 Margin analysis-as a % of average earning

assets(7)

Interest income

(7) 3.58 % 3.64 % 3.68 % 3.75 % Interest expense 0.30 0.30 0.30 0.33

Net interest margin(7) 3.28 % 3.34 % 3.38 % 3.42 %

Revenue—FTE

Net interest income $ 430,649 $ 424,852 $ 424,937 $ 424,170

FTE adjustment 8,196 6,634 6,587 5,923

Net interest income(7) 438,845 431,486 431,524 430,093 Noninterest income 246,628 250,503 248,655 252,209

Total revenue (7) $ 685,473 $ 681,989 $ 680,179 $ 682,302

Continued

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Table 46—Selected Quarterly Income Statement, Capital, and Other Data—Continued(1)

Capital adequacy 2013 December 31, September 30, June 30, March 31, Total risk-weighted assets (in millions) $ 49,690 $ 48,687 $ 48,080 $ 47,937 Tier 1 leverage ratio 10.67 % 10.85 % 10.64 % 10.57 % Tier 1 risk-based capital ratio 12.28 12.36 12.24 12.16 Total risk-based capital ratio 14.57 14.67 14.57 14.55 Tier 1 common risk-based capital ratio 10.90 10.85 10.71 10.62 Tangible common equity / tangible asset

ratio(8) 8.83 9.02 8.78 8.92 Tangible equity / tangible asset ratio(9) 9.49 9.71 9.47 9.62 Tangible common equity / risk-weighted

assets ratio 10.48 10.40 10.15 10.34

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Table 47—Selected Quarterly Income Statement Data(1) 2012 (dollar amounts in thousands, except per share amounts) Fourth Third Second First

Interest income $ 478,995 $ 483,787 $ 487,544 $ 479,937 Interest expense 44,940 53,489 58,582 62,728

Net interest income 434,055 430,298 428,962 417,209 Provision for credit losses 39,458 37,004 36,520 34,406

Net interest income after provision for credit losses 394,597 393,294 392,442 382,803 Total noninterest income 297,651 261,067 253,819 285,320 Total noninterest expense 470,628 458,303 444,269 462,676

Income before income taxes 221,620 196,058 201,992 205,447 Provision for income taxes 54,341 28,291 49,286 52,177

Net income $ 167,279 $ 167,767 $ 152,706 $ 153,270 Dividends on preferred shares 7,973 7,983 7,984 8,049

Net income applicable to common shares $ 159,306 $ 159,784 $ 144,722 $ 145,221

Common shares outstanding

Average—basic 847,220 857,871 862,261 864,499

Average—diluted(2) 853,306 863,588 867,551 869,164 Ending 842,813 855,485 858,401 864,675 Book value per share $ 6.41 $ 6.34 $ 6.13 $ 5.97 Tangible book value per share(3) 5.78 5.71 5.49 5.33

Per common share

Net income—basic $ 0.19 $ 0.19 $ 0.17 $ 0.17 Net income —diluted 0.19 0.19 0.17 0.17 Cash dividends declared 0.04 0.04 0.04 0.04

Common stock price, per share

High

(4) $ 7.20 $ 7.20 $ 6.77 $ 6.58 Low(4) 5.90 6.16 5.84 5.49 Close 6.39 6.90 6.40 6.45 Average closing price 6.42 6.56 6.37 5.97

Return on average total assets 1.19 % 1.19 % 1.10 % 1.13 % Return on average common shareholders’ equity 11.6 11.9 11.1 11.4 Return on average tangible common shareholders’ equity(5) 13.5 13.9 13.1 13.5 Efficiency ratio(6) 62.3 64.5 62.8 63.8 Effective tax rate (benefit) 24.5 14.4 24.4 25.4 Margin analysis-as a % of average earning assets(7)

Interest income(7) 3.80 % 3.79 % 3.89 % 3.91 %

Interest expense 0.35 0.41 0.47 0.51

Net interest margin(7) 3.45 % 3.38 % 3.42 % 3.40 %

Revenue—FTE

Net interest income $ 434,055 $ 430,298 $ 428,962 $ 417,209

FTE adjustment 5,470 5,254 5,747 3,935

Net interest income(7) 439,525 435,552 434,709 421,144 Noninterest income 297,651 261,067 253,819 285,320

Total revenue(7) $ 737,176 $ 696,619 $ 688,528 $ 706,464

Continued

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Table 47—Selected Quarterly Income Statement, Capital, and Other Data—Continued(1)

Capital adequacy 2012 December 31, September 30, June 30, March 31, Total risk-weighted assets (in millions) $ 47,773 $ 48,147 $ 47,890 $ 46,716 Tier 1 leverage ratio 10.36 % 10.29 % 10.34 % 10.55 % Tier 1 risk-based capital ratio 12.02 11.88 11.93 12.22 Total risk-based capital ratio 14.50 14.36 14.42 14.76 Tier 1 common risk-based capital ratio 10.48 10.28 10.08 10.15 Tangible common equity / tangible asset

ratio(8) 8.76 8.74 8.41 8.33 Tangible equity / tangible asset ratio(9) 9.46 9.43 9.10 9.03 Tangible common equity / risk-weighted

assets ratio 10.20 10.14 9.85 9.86 (1)

Comparisons for presented periods are impacted by a number of factors. Refer to the Significant Items section for additional discussion regarding these items.

(2) For all quarterly periods presented above, the impact of the convertible preferred stock issued in April of 2008

was excluded from the diluted share calculation because the result would have been higher than basic earnings

per common share (anti-dilutive) for the periods. (3)

Deferred tax liability related to other intangible assets is calculated assuming a 35% tax rate. (4)

High and low stock prices are intra-day quotes obtained from NASDAQ. (5)

Net income excluding expense for amortization of intangibles for the period divided by average tangible shareholders’ equity. Average tangible shareholders’ equity equals average total stockholders’ equity less

average intangible assets and goodwill. Expense for amortization of intangibles and average intangible assets

are net of deferred tax liability, and calculated assuming a 35% tax rate. (6)

Noninterest expense less amortization of intangibles divided by the sum of FTE net interest income and noninterest income excluding securities (losses) gains.

(7) Presented on a FTE basis assuming a 35% tax rate.

(8) Tangible common equity (total common equity less goodwill and other intangible assets) divided by tangible

assets (total assets less goodwill and other intangible assets). Other intangible assets are net of deferred tax, and

calculated assuming a 35% tax rate. (9)

Tangible equity (total equity less goodwill and other intangible assets) divided by tangible assets (total assets less goodwill and other intangible assets). Other intangible assets are net of deferred tax, and calculated

assuming a 35% tax rate.

ADDITIONAL DISCLOSURES

Forward-Looking Statements

This report, including MD&A, contains certain forward-looking statements, including certain plans,

expectations, goals, projections, and statements, which are subject to numerous assumptions, risks, and

uncertainties. Statements that do not describe historical or current facts, including statements about beliefs and

expectations, are forward-looking statements. Forward-looking statements may be identified by words such as

expect, anticipate, believe, intend, estimate, plan, target, goal, or similar expressions, or future or conditional verbs

such as will, may, might, should, would, could, or similar variations. The forward-looking statements are intended to

be subject to the safe harbor provided by Section 27A of the Securities Act of 1933, Section 21E of the Securities

Exchange Act of 1934, and the Private Securities Litigation Reform Act of 1995.

While there is no assurance that any list of risks and uncertainties or risk factors is complete, below are certain

factors which could cause actual results to differ materially from those contained or implied in the forward-looking

statements: (1) worsening of credit quality performance due to a number of factors such as the underlying value of

collateral that could prove less valuable than otherwise assumed and assumed cash flows may be worse than

expected; (2) changes in general economic, political, or industry conditions; uncertainty in U.S. fiscal and monetary

policy, including the interest rate policies of the Federal Reserve Board; volatility and disruptions in global capital

and credit markets; (3) movements in interest rates; (4) competitive pressures on product pricing and services;

(5) success, impact, and timing of our business strategies, including market acceptance of any new products or

services implementing our “Fair Play” banking philosophy; (6) changes in accounting policies and principles and the

accuracy of our assumptions and estimates used to prepare our financial statements; (7) extended disruption of vital

infrastructure; (8) the final outcome of significant litigation; (9) the nature, extent, timing, and results of

governmental actions, examinations, reviews, reforms, regulations, and interpretations, including those related to the

Dodd-Frank Wall Street Reform and Consumer Protection Act and the Basel III regulatory capital reforms, as well

as those involving the OCC, Federal Reserve, FDIC, and CFPB; and (10) the outcome of judicial and regulatory

decisions regarding practices in the residential mortgage industry, including among other things the processes

followed for foreclosing residential mortgages.

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All forward-looking statements speak only as of the date they are made and are based on information available

at that time. 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. As forward-looking statements involve significant risks and

uncertainties, caution should be exercised against placing undue reliance on such statements.

Non-Regulatory Capital Ratios

In addition to capital ratios defined by banking regulators, the Company considers various other measures

when evaluating capital utilization and adequacy, including:

• Tangible common equity to tangible assets,

• Tier 1 common equity to risk-weighted assets using Basel I and Basel III definitions, and

• Tangible common equity to risk-weighted assets using Basel I definition.

These non-regulatory capital ratios are viewed by management as useful additional methods of reflecting the

level of capital available to withstand unexpected market conditions. Additionally, presentation of these ratios

allows readers to compare the Company’s capitalization to other financial services companies. These ratios differ

from capital ratios defined by banking regulators principally in that the numerator excludes preferred securities, the

nature and extent of which varies among different financial services companies. These ratios are not defined in

Generally Accepted Accounting Principles (“GAAP”) or federal banking regulations. As a result, these non-

regulatory capital ratios disclosed by the Company are considered non-GAAP financial measures.

Because there are no standardized definitions for these non-regulatory capital ratios, the Company’s

calculation methods may differ from those used by other financial services companies. Also, there may be limits in

the usefulness of these measures to investors. As a result, the Company encourages readers to consider the

consolidated financial statements and other financial information contained in this Form 10-K in their entirety, and

not to rely on any single financial measure. Basel III Tier 1 common capital ratio estimates are based on

management’s current interpretation, expectations, and understanding of the final U.S. Basel III rules adopted by the

Federal Reserve Board and released on July 2, 2013.

Risk Factors

More information on risk is set forth under the heading Risk Factors included in Item 1A and incorporated by

reference into this MD&A. Additional information regarding risk factors can also be found in the Risk Management

and Capital discussion, as well as the Regulatory Matters section included in Item 1 and incorporated by reference

into the MD&A.

Critical Accounting Policies and Use of Significant Estimates

Our Consolidated Financial Statements are prepared in accordance with GAAP. The preparation of financial

statements in conformity with GAAP requires us to establish accounting policies and make estimates that affect

amounts reported in our Consolidated Financial Statements. Note 1 of the Notes to Consolidated Financial

Statements, which is incorporated by reference into this MD&A, describes the significant accounting policies we use

in our Consolidated Financial Statements.

An accounting estimate requires assumptions and judgments about uncertain matters that could have a

material effect on the Consolidated Financial Statements. Estimates are made under facts and circumstances at a

point in time, and changes in those facts and circumstances could produce results substantially different from those

estimates. The most significant accounting policies and estimates and their related application are discussed below.

Allowance for Credit Losses

Our ACL of $0.7 billion at December 31, 2013, represents our estimate of probable credit losses inherent in

our loan and lease portfolio and our unfunded loan commitments and letters of credit. We regularly review our ACL

for appropriateness by performing on-going evaluations of the loan and lease portfolio. In doing so, we consider

factors such as the differing economic risk associated with each loan category, the financial condition of specific

borrowers, the level of delinquent loans, the value of any collateral and, where applicable, the existence of any

guarantees or other documented support. We also evaluate the impact of changes in interest rates and overall

economic conditions on the ability of borrowers to meet their financial obligations when quantifying our exposure to

credit losses and assessing the appropriateness of our ACL at each reporting date. There is no certainty that our ACL

will be appropriate over time to cover losses in the portfolio because of unanticipated adverse changes in the

economy, market conditions, or events adversely affecting specific customers, industries, or markets. If the credit

quality of our customer base materially deteriorates, the risk profile of a market, industry, or group of customers

changes materially, or if the ACL is not appropriate, our net income and capital could be materially adversely

affected which, in turn, could have a material adverse effect on our financial condition and results of operations.

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In addition, bank regulators periodically review our ACL and may require us to increase our provision for loan

and lease losses or loan charge-offs. Any increase in our ACL or loan charge-offs as required by these regulatory

authorities could have a material adverse effect on our financial condition and results of operations.

Goodwill Impairment

Goodwill is an intangible asset representing the difference between the purchase price of an asset and its fair

market value and is created when a company pays a premium to acquire another company. We test goodwill for

impairment annually, as of October 1, using a two-step process that begins with an estimation of the fair value of

each reporting unit. Goodwill impairment exists when a reporting unit’s carrying value of goodwill exceeds its

implied fair value. Goodwill is also tested for impairment on an interim basis, using the same two-step process as the

annual testing, if an event occurs or circumstances change between annual tests that would more likely than not

reduce the fair value of the reporting unit below its carrying amount.

Significant judgment is applied when goodwill is assessed for impairment. This judgment includes developing

cash flow projections, selecting appropriate discount rates, identifying relevant market comparables, incorporating

general economic and market conditions, and selecting an appropriate control premium. The selection and weighting

of the various fair value techniques may result in a higher or lower fair value. Judgment is applied in determining the

weightings that are most representative of fair value.

The first step (Step 1) of impairment testing requires comparing the fair value of each reporting unit with

goodwill to its carrying value to identify potential impairment. For our annual impairment testing conducted during

2013, we identified four reporting units with goodwill: Retail and Business Banking, Regional and Commercial

Banking, Wealth Advisors, Government Finance, and Home Lending (WGH), and Insurance. Auto Finance and

Commercial Real Estate was not subject to impairment testing as it had no goodwill associated with the unit. In

addition, although Insurance is included within Treasury/Other for business segment reporting, it was evaluated as a

separate reporting unit for goodwill impairment testing because it had its own separately allocated goodwill resulting

from prior acquisitions and met the reporting unit criteria.

For all four reporting units identified in the above paragraph, we utilized both income and market approaches

to determine the fair value for each reporting unit. The income approach was based on discounted cash flows

derived from assumptions of balance sheet and income statement activity. An internal forecast was developed by

considering several long-term key business drivers such as anticipated loan and deposit growth, net interest margins,

and efficiency ratios. Long-term growth rates were estimated to assist in determining the terminal values. The

discount rates were estimated based on the Capital Asset Pricing Model, which considered the risk-free interest rate

(20-year Treasury Bonds), market-risk premium, equity-risk premium, and a company-specific risk factor. The

company-specific risk factor was used to address the uncertainty of growth estimates and earnings projections of

Management. For the market approach, revenue, earnings and market capitalization multiples of comparable public

companies were selected and applied to each reporting unit’s applicable metrics such as book and tangible book

values. The results of the income and market approaches are combined to arrive at the final calculation of fair value.

All four of the reporting units tested passed Step 1.

The second step (Step 2) of impairment testing is necessary only if the reporting unit does not pass Step 1.

Step 2 compares the implied fair value of the reporting unit goodwill with the carrying amount of the goodwill for

the reporting unit. The implied fair value of goodwill is determined in the same manner as goodwill that is

recognized in a business combination. Significant judgment and estimates are involved in estimating the fair value

of the assets and liabilities of the reporting unit. As none of the reporting units failed Step 1, Step 2 was not

applicable during 2013 testing.

Due to potential economic uncertainties, it is possible that our estimates and assumptions may adversely

change in the future. If our market capitalization decreases, we may be required to record goodwill impairment

losses in future periods, whether in connection with our next annual impairment testing or prior to that time, if any

changes constitute a triggering event.

Valuation of Financial Instruments

Assets and liabilities carried at fair value inherently result in a higher degree of financial statement volatility.

Assets measured at fair value include mortgage loans held for sale, available-for-sale and trading securities, certain

securitized automobile loans, derivatives, and certain securitization trust notes payable. At December 31, 2013,

approximately $7.6 billion of our assets and $0.1 billion of our liabilities were recorded at fair value. In addition to

the above mentioned on-going fair value measurements, fair value is also the unit of measure for recording business

combinations and other non-recurring financial assets and liabilities.

At the end of each quarter, we assess the valuation hierarchy for each asset or liability measured at fair value.

As necessary, assets or liabilities may be transferred within fair value hierarchy levels due to changes in availability

of observable market inputs to measure fair value at the measurement date.

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Where available, we use quoted market prices to determine fair value. If quoted market prices are not

available, fair value is determined, using either internally developed or independent third party valuation models,

based on inputs that are either directly observable or derived from market data. These inputs include, but are not

limited to, interest rate yield curves, option volatilities, or option adjusted spreads. Where neither quoted market

prices nor observable market data are available, fair value is determined using valuation models that feature one or

more significant unobservable inputs based on management’s expectation that market participants would use in

determining the fair value of the asset or liability. The determination of appropriate unobservable inputs requires

exercise of management judgment. A significant portion of our assets and liabilities that are reported at fair value are

measured based on quoted market prices and observable market or independent inputs.

The following is a description of the significant estimates used in the valuation of financial assets and liabilities for

which quoted market prices and observable market parameters are not available.

Mortgage-backed and Asset-backed securities

Our Alt-A, private label CMO and pooled-trust-preferred securities portfolios are classified as Level 3 and as

such use significant estimates to determine the fair value of these securities which results in greater subjectivity. The

Alt-A and private label CMO securities portfolios are subjected to a monthly review of the projected cash flows,

while the cash flows of our pooled-trust-preferred securities portfolio are reviewed quarterly. These reviews are

supported with analysis from independent third parties, and are used as a basis for impairment analysis.

Alt-A mortgage-backed and private-label CMO securities are collateralized by first-lien residential mortgage

loans. The securities valuation methodology incorporates values obtained from a third party pricing specialist using

a discounted cash flow approach and a proprietary pricing model and includes assumptions management believes

market participants would use to value the securities under current market conditions. The model uses inputs such as

estimated prepayment speeds, losses, recoveries, default rates that are implied by the underlying performance of

collateral in the structure or similar structures, house price depreciation / appreciation rates that are based upon

macroeconomic forecasts and discount rates that are implied by market prices for similar securities with similar

collateral structures.

Pooled-trust-preferred securities are CDOs backed by a pool of debt securities issued by financial institutions.

The collateral generally consists of trust-preferred securities and subordinated debt securities issued by banks, bank

holding companies, and insurance companies. A full cash flow analysis is used to estimate fair values and assess

impairment for each security within this portfolio. We engage a third party pricing specialist with direct industry

experience in pooled-trust-preferred securities valuations to provide assistance in estimating the fair value and

expected cash flows for each security in this portfolio. The PD of each issuer and the market discount rate are the

most significant inputs in determining fair value. Management evaluates the PD assumptions provided by the third

party pricing specialist by comparing the current PD to the assumptions used the previous quarter, actual defaults

and deferrals in the current period, and trend data on certain financial ratios of the issuers. Huntington also evaluates

the assumptions related to discount rates. Relying on cash flows is necessary because there was a lack of observable

transactions in the market and many of the original sponsors or dealers for these securities are no longer able to

provide a fair value that is compliant with ASC 820.

Derivatives used for hedging purposes

Derivatives designated as qualified hedges are tested for hedge effectiveness on a quarterly basis. Assessments

are made at the inception of the hedge and on a recurring basis to determine whether the derivative used in the

hedging transaction has been and is expected to continue to be highly effective in offsetting changes in fair values or

cash flows of the hedged item. A statistical regression analysis is performed to measure the effectiveness.

If, based on the assessment, a derivative is not expected to be a highly effective hedge or it has ceased to be a

highly effective hedge, hedge accounting is discontinued as of the quarter the hedge is not highly effective. As the

statistical regression analysis requires the use of estimates regarding the amount and timing of future cash flows

which are sensitive to significant changes in future periods based on changes in market rates, we consider this a

critical accounting estimate.

Loans held for sale

Huntington has elected to apply the fair value option to certain residential mortgage loans that are classified as

held for sale at origination. The fair value is estimated based on security prices for similar product types.

Certain consumer and commercial loans are classified as held for sale and are accounted for at the lower of

amortized cost or fair value. The determination of fair value for these consumer loans is based on security prices for

similar product types or discounted expected cash flows, which takes into consideration factors such as future

interest rates, prepayment speeds, default and loss curves, and market discount rates. The determination of fair value

for commercial loans takes into account factors such as the location and appraised value of the related collateral, as

well as the estimated cash flows from realization of the collateral.

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Mortgage Servicing Rights

Retained rights to service mortgage loans are recognized as a separate and distinct asset at the time the loans

are sold. Mortgage servicing rights (“MSRs”) are initially recorded at fair value at the time the related loans are sold

and subsequently re-measured at each reporting date under either the fair value or amortization method. Any

increase or decrease in fair value of MSRs accounted for under the fair value method, as well as any amortization

and/or impairment of MSRs recorded under the amortization method, is reflected in earnings in the period that the

changes occur. MSRs are subject to interest rate risk in that their fair value will fluctuate as a result of changes in the

interest rate environment. Fair value is determined based upon the application of an income approach valuation

model. The valuation model, maintained by an independent third party, incorporates assumptions in estimating

future cash flows. These assumptions include time decay, payoffs, and changes in valuation inputs and assumptions.

The reasonableness of these pricing models is validated on a minimum of a quarterly basis by at least one

independent external service broker valuation. Because the fair values of MSRs are significantly impacted by the use

of estimates, the use of different assumption estimates can result in different estimated fair values of those MSRs.

Pension Valuation

Pension plan assets consist of mutual funds, corporate bonds, US government bonds, our common stock, and

other investment assets. Investments are accounted for at cost on the trade date and are reported at fair value. Mutual

funds are valued at quoted Net Asset Value. Our common stock is traded on a national securities exchange and is

valued at the last reported sales price.

The discount rate and expected return on plan assets used to determine the benefit obligation and pension

expense are both significant assumptions. Actual results may be materially different. (See Note 18 of the Notes to the

Consolidated Financial Statements).

Contingent Liabilities

We are parties to various claims, litigation, and legal proceedings resulting from ordinary business activities

relating to our current and/or former operations. We estimate and provide for potential losses that may arise out of

litigation and regulatory proceedings to the extent that such losses are probable and can be reasonably estimated.

Significant judgment is required in making these estimates and our final liabilities may ultimately be more or less

than the current estimate. Our total estimated liability in respect of litigation and regulatory proceedings is

determined on a case-by-case basis and represents an estimate of probable losses after considering, among other

factors, the progress of each case or proceeding, our experience and the experience of others in similar cases or

proceedings, and the opinions and views of legal counsel. Litigation exposure represents a key area of judgment and

is subject to uncertainty and certain factors outside of our control.

Income Taxes

The calculation of our provision for income taxes is complex and requires the use of estimates and judgments.

We have two accruals for income taxes: (1) our income tax payable represents the estimated net amount currently

due to the federal, state, and local taxing jurisdictions, net of any reserve for potential audit issues and any tax

refunds, and the net receivable balance is reported as a component of accrued income and other assets in our

consolidated balance sheet; (2) our deferred federal and state income tax and related valuation accounts, reported as

a component of accrued income and other assets, represents the estimated impact of temporary differences between

how we recognize our assets and liabilities under GAAP, and how such assets and liabilities are recognized under

federal and state tax law.

In the ordinary course of business, we operate in various taxing jurisdictions and are subject to income and

non-income taxes. The effective tax rate is based in part on our interpretation of the relevant current tax laws. We

believe the aggregate liabilities related to taxes are appropriately reflected in the consolidated financial statements.

We review the appropriate tax treatment of all transactions taking into consideration statutory, judicial, and

regulatory guidance in the context of our tax positions. In addition, we rely on various tax opinions, recent tax

audits, and historical experience.

From time-to-time, we engage in business transactions that may affect our tax liabilities. Where appropriate,

we have obtained opinions of outside experts and have assessed the relative merits and risks of the appropriate tax

treatment of business transactions taking into account statutory, judicial, and regulatory guidance in the context of

the tax position. However, changes to our estimates of accrued taxes can occur due to changes in tax rates,

implementation of new business strategies, resolution of issues with taxing authorities regarding previously taken

tax positions, and newly enacted statutory, judicial, and regulatory guidance. Such changes could affect the amount

of our accrued taxes and could be material to our financial position and / or results of operations. (See Note 17 of the

Notes to Consolidated Financial Statements.)

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Deferred Tax Assets

At December 31, 2013, we had a net federal deferred tax asset of $97.9 million and a net state deferred tax

asset of $39.7 million. A valuation allowance is provided when it is more-likely-than-not that some portion of the

deferred tax asset will not be realized. All available evidence, both positive and negative, was considered to

determine whether, based on the weight of that evidence, impairment should be recognized. Our forecast process

includes judgmental and quantitative elements that may be subject to significant change. If our forecast of taxable

income within the carryforward periods available under applicable law is not sufficient to cover the amount of net

deferred tax assets, such assets may be impaired. Based on our analysis of both positive and negative evidence and

our ability to offset the net deferred tax assets against our forecasted future taxable income, there was no impairment

of the net deferred tax assets at December 31, 2013, for regulatory capital purposes.

Recent Accounting Pronouncements and Developments

Note 2 to Consolidated Financial Statements discusses new accounting pronouncements adopted during 2013

and the expected impact of accounting pronouncements recently issued but not yet required to be adopted. To the

extent the adoption of new accounting standards materially affect financial condition, results of operations, or

liquidity, the impacts are discussed in the applicable section of this MD&A and the Notes to Consolidated Financial

Statements.

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Item 7A: Quantitative and Qualitative Disclosures About Market Risk

Information required by this item is set forth under the heading of “Market Risk” in Item 7 (MD&A), which is

incorporated by reference into this item.

Item 8: Financial Statements and Supplementary Data

Information required by this item is set forth in the Report of Independent Registered Public Accounting Firm,

Consolidated Financial Statements and Notes, and Selected Quarterly Income Statements, which is incorporated by

reference into this item.

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REPORT OF MANAGEMENT

The Management of Huntington Bancshares Incorporated (Huntington or the Company) is responsible for the

financial information and representations contained in the Consolidated Financial Statements and other sections of

this report. The Consolidated Financial Statements have been prepared in conformity with accounting principles

generally accepted in the United States. In all material respects, they reflect the substance of transactions that should

be included based on informed judgments, estimates, and currently available information. Management maintains a

system of internal accounting controls, which includes the careful selection and training of qualified personnel,

appropriate segregation of responsibilities, communication of written policies and procedures, and a broad program

of internal audits. The costs of the controls are balanced against the expected benefits. During 2013, the audit

committee of the board of directors met regularly with Management, Huntington’s internal auditors, and the

independent registered public accounting firm, Deloitte & Touche LLP, to review the scope of the audits and to

discuss the evaluation of internal accounting controls and financial reporting matters. The independent registered

public accounting firm and the internal auditors have free access to, and meet confidentially with, the audit

committee to discuss appropriate matters. Also, Huntington maintains a disclosure review committee. This

committee’s purpose is to design and maintain disclosure controls and procedures to ensure that material

information relating to the financial and operating condition of Huntington is properly reported to its chief executive

officer, chief financial officer, internal auditors, and the audit committee of the board of directors in connection with

the preparation and filing of periodic reports and the certification of those reports by the chief executive officer and

the chief financial officer.

REPORT OF MANAGEMENT’S ASSESSMENT OF INTERNAL CONTROL OVER FINANCIAL

REPORTING

Management is responsible for establishing and maintaining adequate internal control over financial reporting for

the Company, including accounting and other internal control systems that, in the opinion of Management, provide

reasonable assurance that (1) transactions are properly authorized, (2) the assets are properly safeguarded, and

(3) transactions are properly recorded and reported to permit the preparation of the Consolidated Financial

Statements in conformity with accounting principles generally accepted in the United States. Huntington’s

Management assessed the effectiveness of the Company’s internal control over financial reporting as of

December 31, 2013. In making this assessment, Management used the criteria set forth by the Committee of

Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control—Integrated Framework

(1992). Based on that assessment, Management believes that, as of December 31, 2013, the Company’s internal

control over financial reporting is effective based on those criteria. The Company’s internal control over financial

reporting as of December 31, 2013 has been audited by Deloitte & Touche LLP, an independent registered public

accounting firm, as stated in their report appearing on the next page.

Stephen D. Steinour – Chairman, President, and Chief Executive Officer

David S. Anderson – Executive Vice President and Interim Chief Financial Officer

February 14, 2014

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders of Huntington Bancshares Incorporated Columbus, Ohio

We have audited the internal control over financial reporting of Huntington Bancshares Incorporated and

subsidiaries (the “Company”) as of December 31, 2013, based on criteria established in Internal Control —

Integrated Framework (1992) issued by the Committee of Sponsoring Organizations of the Treadway

Commission. The Company’s management is responsible for maintaining effective internal control over financial

reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the

accompanying Report of Management’s Assessment of Internal Control over Financial Reporting. Our responsibility

is to express an opinion on the Company’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board

(United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about

whether effective internal control over financial reporting was maintained in all material respects. Our audit

included obtaining an understanding of internal control over financial reporting, assessing the risk that a material

weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the

assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe

that our audit provides a reasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed by, or under the supervision of, the

company’s principal executive and principal financial officers, or persons performing similar functions, and effected

by the company’s board of directors, management, and other personnel to provide reasonable assurance regarding

the reliability of financial reporting and the preparation of financial statements for external purposes in accordance

with generally accepted accounting principles. A company’s internal control over financial reporting includes those

policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly

reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that

transactions are recorded as necessary to permit preparation of financial statements in accordance with generally

accepted accounting principles, and that receipts and expenditures of the company are being made only in

accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance

regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that

could have a material effect on the financial statements.

Because of the inherent limitations of internal control over financial reporting, including the possibility of collusion

or improper management override of controls, material misstatements due to error or fraud may not be prevented or

detected on a timely basis. Also, projections of any evaluation of the effectiveness of the internal control over

financial reporting to future periods are subject to the risk that the controls may become inadequate because of

changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting

as of December 31, 2013, based on the criteria established in Internal Control — Integrated Framework (1992)

issued by the Committee of Sponsoring Organizations of the Treadway Commission.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United

States), the consolidated financial statements as of and for the year ended December 31, 2013 of the Company and

our report dated February 14, 2014 expressed an unqualified opinion on those financial statements.

Columbus, Ohio February 14, 2014

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders of

Huntington Bancshares Incorporated Columbus, Ohio

We have audited the accompanying consolidated balance sheets of Huntington Bancshares Incorporated and

subsidiaries (the “Company”) as of December 31, 2013 and 2012, and the related consolidated statements of income,

comprehensive income, changes in shareholders’ equity, and cash flows for each of the three years in the period

ended December 31, 2013. These financial statements are the responsibility of the Company’s management. Our

responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board

(United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about

whether the financial statements are free of material misstatement. An audit includes examining, on a test basis,

evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the

accounting principles used and significant estimates made by management, as well as evaluating the overall

financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of

Huntington Bancshares Incorporated and subsidiaries as of December 31, 2013 and 2012, and the results of their

operations and their cash flows for each of the three years in the period ended December 31, 2013, in conformity

with accounting principles generally accepted in the United States of America.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United

States), the Company’s internal control over financial reporting as of December 31, 2013, based on the criteria

established in Internal Control — Integrated Framework (1992) issued by the Committee of Sponsoring

Organizations of the Treadway Commission and our report dated February 14, 2014 expressed an unqualified

opinion on the Company’s internal control over financial reporting.

Columbus, Ohio February 14, 2014

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Huntington Bancshares Incorporated Consolidated Balance Sheets December 31, (dollar amounts in thousands, except number of shares) 2013 2012 Assets

Cash and due from banks $ 1,001,132 $ 1,262,806 Interest-bearing deposits in banks 57,043 70,921 Trading account securities 35,573 91,205 Loans held for sale 326,212 764,309

(includes $278,928 and $452,949 respectively, measured at fair

value)(1)

Available-for-sale and other securities 7,308,753 7,566,175

Held-to-maturity securities 3,836,667 1,743,876 Loans and leases (includes $52,286 and $142,762 respectively, measured

at fair value):(2)

Commercial and industrial loans and leases 17,594,276 16,970,689

Commercial real estate loans 4,850,094 5,399,240 Automobile loans and leases 6,638,713 4,633,820

Home equity loans 8,336,318 8,335,342 Residential mortgage loans 5,321,088 4,969,672 Other consumer loans 380,011 419,662

Loans and leases 43,120,500 40,728,425 Allowance for loan and lease losses (647,870 ) (769,075 )

Net loans and leases 42,472,630 39,959,350

Bank owned life insurance 1,647,170 1,596,056 Premises and equipment 634,657 617,257 Goodwill 444,268 444,268 Other intangible assets 93,193 132,157 Accrued income and other assets 1,619,046 1,904,805

Total assets $ 59,476,344 $ 56,153,185

Liabilities and shareholders’ equity

Liabilities

Deposits in domestic offices

Demand deposits—noninterest-bearing $ 13,650,468 $ 12,599,636

Interest-bearing 33,540,545 33,375,016 Deposits in foreign offices 315,705 278,031

Deposits 47,506,718 46,252,683 Short-term borrowings 552,143 589,814 Federal Home Loan Bank advances 1,808,293 1,008,959 Other long-term debt 1,349,119 158,784 Subordinated notes 1,100,860 1,197,091 Accrued expenses and other liabilities 1,059,888 1,155,643

Total liabilities 53,377,021 50,362,974

Shareholders’ equity

Preferred stock—authorized 6,617,808 shares;

Series A, 8.50% fixed rate, non-cumulative perpetual convertible preferred stock, par value of $0.01, and liquidation value per

share of $1,000 362,507 362,507 Series B, floating rate, non-voting, non-cumulative perpetual

preferred stock, par value of $0.01, and liquidation value per

share of $1,000 23,785 23,785 Common stock 8,322 8,441 Capital surplus 7,398,515 7,475,149 Less treasury shares, at cost (9,643 ) (10,921 ) Accumulated other comprehensive loss (214,009 ) (150,817 ) Retained (deficit) earnings (1,470,154 ) (1,917,933 )

Total shareholders’ equity 6,099,323 5,790,211

Total liabilities and shareholders’ equity $ 59,476,344 $ 56,153,185

Common shares authorized (par value of $0.01) 1,500,000,000 1,500,000,000 Common shares issued 832,217,098 844,105,349 Common shares outstanding 830,963,427 842,812,709 Treasury shares outstanding 1,253,671 1,292,640 Preferred shares issued 1,967,071 1,967,071 Preferred shares outstanding 398,007 398,007 (1)

Amounts represent loans for which Huntington has elected the fair value option. See Note 19. (2)

Amounts represent certain assets of a consolidated VIE for which Huntington has elected the fair value option. See Note 21.

See Notes to Consolidated Financial Statements

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Huntington Bancshares Incorporated Consolidated Statements of Income Year Ended December 31, (dollar amounts in thousands, except per share amounts) 2013 2012 2011 Interest and fee income:

Loans and leases $ 1,629,939 $ 1,675,295 $ 1,727,784 Available-for-sale and other securities

Taxable 148,557 184,340 207,984 Tax-exempt 12,678 8,999 9,785

Held-to-maturity securities 50,214 24,088 11,213 Other 19,249 37,541 13,460

Total interest income 1,860,637 1,930,263 1,970,226

Interest expense

Deposits 116,241 162,167 260,052

Short-term borrowings 700 2,048 3,500 Federal Home Loan Bank advances 1,077 819 824 Subordinated notes and other long-term debt 38,011 54,705 76,680

Total interest expense 156,029 219,739 341,056

Net interest income 1,704,608 1,710,524 1,629,170 Provision for credit losses 90,045 147,388 174,059

Net interest income after provision for credit losses 1,614,563 1,563,136 1,455,111

Service charges on deposit accounts 271,802 262,179 243,507 Mortgage banking income 126,855 191,092 83,408 Trust services 123,007 121,897 119,382 Electronic banking 92,591 82,290 111,697 Insurance income 69,264 71,319 69,470 Brokerage income 69,189 72,226 80,367 Bank owned life insurance income 56,419 56,042 62,336 Capital markets fees 45,220 48,160 36,540 Gain on sale of loans 18,171 58,182 31,944 Net gains on sales of securities 2,220 6,388 3,682 Impairment losses recognized in earnings on available-for-sale securities

(a) (1,802 ) (1,619 ) (7,363 ) Other income 125,059 129,701 145,653

Total noninterest income 997,995 1,097,857 980,623

Personnel costs 1,001,637 988,193 892,534 Outside data processing and other services 199,547 190,255 189,174 Net occupancy 125,344 111,160 109,129 Equipment 106,793 102,947 92,544 Marketing 51,185 64,263 65,560 Deposit and other insurance expense 50,161 68,330 77,692 Amortization of intangibles 41,364 46,549 53,318 Professional services 40,587 65,758 68,616 Gain on early extinguishment of debt — (798 ) (9,697 ) Other expense 141,385 199,219 189,630

Total noninterest expense 1,758,003 1,835,876 1,728,500

Income before income taxes 854,555 825,117 707,234 Provision for income taxes 215,814 184,095 164,621

Net income 638,741 641,022 542,613 Dividends on preferred shares 31,869 31,989 30,813

Net income applicable to common shares $ 606,872 $ 609,033 $ 511,800

Average common shares—basic 834,205 857,962 863,691 Average common shares—diluted 843,974 863,402 867,624 Per common share:

Net income—basic $ 0.73 $ 0.71 $ 0.59 Net income—diluted 0.72 0.71 0.59 Cash dividends declared 0.19 0.16 0.10

(a) The following OTTI losses are included in securities losses for the

periods presented:

Total OTTI losses $ (1,870 ) $ (1,886 ) $ (8,791 )

Noncredit-related portion of loss recognized in OCI 68 267 1,428

Net impairment credit losses recognized in earnings $ (1,802 ) $ (1,619 ) $ (7,363 )

See Notes to Consolidated Financial Statements

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Huntington Bancshares Incorporated Consolidated Statements of Comprehensive Income Year Ended December 31, (dollar amounts in thousands) 2013 2012 2011 Net income $ 638,741 $ 641,022 $ 542,613 Other comprehensive income, net of tax:

Unrealized gains on available-for-sale and other securities:

Non-credit-related impairment recoveries (losses) on debt

securities not expected to be sold 153 12,490 7,499 Unrealized net gains (losses) on available-for-sale and other

securities arising during the period, net of reclassification for

net realized gains (77,593 ) 55,305 64,921

Total unrealized gains on available-for-sale and other securities (77,440 ) 67,795 72,420 Unrealized gains (losses) on cash flow hedging derivatives (65,928 ) 6,186 5,188 Change in accumulated unrealized losses for pension and other post-

retirement obligations 80,176 (51,035 ) (53,875 )

Other comprehensive income (loss), net of tax (63,192 ) 22,946 23,733

Comprehensive income $ 575,549 $ 663,968 $ 566,346

See Notes to Consolidated Financial Statements

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Huntington Bancshares Incorporated Consolidated Statements of Changes in Shareholders’ Equity

Preferred Stock Accumulated Other

Series A Series B Retained Total

(all amounts in

thousands, Floating Rate Common Stock Capital Surplus

Treasury Stock Comprehensive

Loss Earnings (Deficit)

except for per share

amounts) Shares Amount Shares Amount Shares Amount Shares Amount Year Ended

December 31,

2013

Balance, beginning

of year 363 $ 362,507 35 $ 23,785 844,105 $ 8,441 $ 7,475,149 (1,292 ) $ (10,921 ) $ (150,817 ) $ (1,917,933 ) $ 5,790,211

Net income

638,741 638,741 Other

comprehensive

income (loss)

(63,192 )

(63,192 ) Repurchases of

common stock

(16,708 ) (167 ) (124,828 )

(124,995 ) Cash dividends

declared:

Common

($0.19

per

share)

(158,194 ) (158,194 ) Preferred

Series

A ($85.00

per

share)

(30,813 ) (30,813 ) Preferred

Series

B

($33.14

per share)

(1,055 ) (1,055 ) Recognition of the

fair value of

share-based

compensation

37,007

37,007 Other share-based

compensation activity

4,820 48 12,812

(873 ) 11,987 Other

(1,625 ) (39 ) 1,278

(27 ) (374 )

Balance, end of

year 363 $ 362,507 35 $ 23,785 832,217 $ 8,322 $ 7,398,515 (1,331 ) $ (9,643 ) $ (214,009 ) $ (1,470,154 ) $ 6,099,323

See Notes to Consolidated Financial Statements

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Huntington Bancshares Incorporated Consolidated Statements of Changes in Shareholders’ Equity Preferred Stock Accumulated

Other Comprehensiv

e Loss

Series A Series B

Retained Earnings (Deficit)

Total

(all amounts in thousands, Floating Rate Common Stock Capital Surplus

Treasury Stock except for per share

amounts) Share

s Amount Share

s Amoun

t Shares Amoun

t Shares Amount Year Ended December 31,

2012

Balance, beginning of year

363 $ 362,50

7 35 $ 23,78

5 865,58

5 $ 8,656 $ 7,596,80

9 (1,17

8 )

$ (10,25

5 )

$ (173,763 )

$ (2,389,63

9 )

$ 5,418,10

0

Net income

641,022 641,022 Other comprehensive

income (loss)

22,946

22,946 Repurchase of common

stock

(23,32

8 )

(233 )

(148,648 )

(148,881 )

Cash dividends declared:

Common ($0.16

per share)

(136,887 )

(136,887 )

Preferred Series A

($85.00 per

share)

(30,813 )

(30,813 )

Preferred Series B

($33.14 per

share)

(1,176 )

(1,176 )

Recognition of the fair

value of share-based

compensation

27,873

27,873 Other share-based

compensation activity

1,848 18 (795 )

(348 )

(1,125 )

Other

(90 )

(114 )

(666 )

(92 )

(848 )

Balance, end of year 363 $

362,50

7 35 $ 23,78

5 844,10

5 $ 8,441 $ 7,475,14

9 (1,29

2 )

$ (10,92

1 )

$ (150,817 )

$ (1,917,93

3 )

$ 5,790,21

1

See Notes to Consolidated Financial Statements

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Table of Contents

Huntington Bancshares Incorporated Consolidated Statements of Changes in Shareholders’ Equity

Preferred Stock

Accumulated Other

Comprehensive Loss

Series A Series B

Retained Earnings (Deficit)

Total

(all amounts in

thousands, except for per

share amounts)

Floating Rate Common Stock

Capital Surplus

Treasury Stock

Shares Amount Shares Amoun

t Shares Amount Shares Amount Year Ended

December 31,

2011

Balance, beginning

of year 363 $ 362,507 — $ — 864,195 $ 8,642 $ 7,630,093 (876 ) $ (8,771 ) $ (197,496 ) $ (2,814,433 ) $ 4,980,542

Net income

542,613 542,613 Other

comprehensive

income (loss)

23,733

23,733 Issuance of

preferred stock

35 23,785

(1,759 )

22,026 Repurchase of

warrants

convertible to

common stock

(49,100 )

(49,100 ) Cash dividends

declared:

Common

($0.10 per

share)

(86,448 ) (86,448 ) Preferred

Series

A

($85.00

per share)

(30,813 ) (30,813 ) Recognition of the

fair value of

share-based

compensation

19,666

19,666 Other share-based

1,390 14 (1,605 )

(343 ) (1,934 )

compensation

activity Other

(486 ) (302 ) (1,484 )

(215 ) (2,185 )

Balance, end of

year 363 $ 362,507 35 $ 23,785 865,585 $ 8,656 $ 7,596,809 (1,178 ) $ (10,255 ) $ (173,763 ) $ (2,389,639 ) $ 5,418,100

See Notes to Consolidated Financial Statements

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Huntington Bancshares Incorporated Consolidated Statements of Cash Flows Year Ended December 31, (dollar amounts in thousands) 2013 2012 2011 Operating activities

Net income $ 638,741 $ 641,022 $ 542,613 Adjustments to reconcile net income to net cash provided by

operating activities:

Provision for credit losses 90,045 147,388 174,059

Depreciation and amortization 281,545 274,572 282,105 Share-based compensation expense 37,007 27,873 19,666 Change in deferred income taxes 97,440 153,123 159,193 Originations of loans held for sale (2,845,275 ) (3,814,572 ) (2,414,172 ) Principal payments on and proceeds from loans held

for sale 3,017,430 3,731,465 2,820,797 Gain on sale of loans held for sale (44,787 ) (60,251 ) (15,870 ) Gain on early extinguishment of debt — (798 ) (9,697 ) Bargain purchase gain — (11,217 ) — Net gains on sales of securities (2,220 ) (6,388 ) (3,682 ) Impairment losses recognized in earnings on available-

for-sale securities 1,802 1,619 7,363 Net Change in:

Trading account securities 55,632 (45,306 ) 139,505 Accrued income and other assets 21,623 455,411 (62,230 ) Accrued expense and other liabilities (335,738 ) (491,811 ) (44,863 )

Net cash provided by (used for) operating activities 1,013,245 1,002,130 1,594,787

Investing activities

Decrease (increase) in interest-bearing deposits in banks 146,584 70,980 50,093

Net cash received in acquisitions — 40,258 — Proceeds from:

Maturities and calls of available-for-sale and other securities 1,414,114 1,776,594 2,489,049

Maturities of held-to-maturity securities 278,136 113,576 31,163 Sales of available-for-sale and other securities 410,106 957,930 3,205,884

Purchases of available-for-sale and other securities (1,416,795 ) (2,384,824 ) (4,283,866 ) Purchases of held-to-maturity securities (2,081,373 ) (941,119 ) (204,082 ) Net proceeds from sales of loans 459,006 3,092,643 1,640,237 Net loan and lease activity, excluding sales (3,386,753 ) (3,287,000 ) (4,148,424 ) Proceeds from sale of operating lease assets 10,227 30,322 62,744 Purchases of premises and equipment (102,208 ) (129,641 ) (143,763 ) Proceeds from sales of other real estate 40,448 56,762 55,817 Purchases of loans and leases (16,170 ) (484,157 ) (59,885 )

Other, net 4,345 4,698 327

Net cash provided by (used for) investing activities (4,240,333 ) (1,082,978 ) (1,304,706 )

Financing activities

Increase (decrease) in deposits 1,258,038 2,262,213 1,420,944

Increase (decrease) in short-term borrowings 55,279 (939,979 ) (580,335 ) Maturity/redemption of subordinated notes (50,000 ) (305,010 ) (5,000 ) Proceeds from Federal Home Loan Bank advances 4,400,000 2,515,000 550,000 Maturity/redemption of Federal Home Loan Bank advances (3,600,721 ) (1,914,281 ) (359,732 ) Proceeds from issuance of long-term debt 1,250,000 — — Maturity/redemption of long-term debt (52,086 ) (1,070,804 ) (902,652 ) Repurchase of Warrant to the Treasury — — (49,100 ) Dividends paid on preferred stock (31,869 ) (31,719 ) (30,813 ) Dividends paid on common stock (150,608 ) (137,616 ) (61,591 ) Repurchase of common stock (124,995 ) (148,881 ) — Cost to issue preferred stock — — (1,759 ) Other, net 12,376 (1,237 ) (1,963 )

Net cash provided by (used for) financing activities 2,965,414 227,686 (22,001 )

Increase (decrease) in cash and cash equivalents (261,674 ) 146,838 268,080 Cash and cash equivalents at beginning of period 1,262,806 1,115,968 847,888

Cash and cash equivalents at end of period $ 1,001,132 $ 1,262,806 $ 1,115,968

Supplemental disclosures:

Interest paid $ 155,832 $ 231,897 $ 357,212

Income taxes paid (refunded) 109,432 6,389 80,065 Non-cash activities:

Loans transferred to available-for-sale securities 600,435 — — Loans transferred to portfolio from held-for-sale 307,303 — — Transfer of securities to held-to-maturity from available-for-

sale 292,164 278,748 469,070 Loans transferred to held-for-sale from portfolio 50,360 306,261 1,268,132 Dividends accrued, paid in subsequent quarter 47,898 47,312 40,771 Trust Preferred Securities exchange — — 35,500

See Notes to Consolidated Financial Statements.

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Huntington Bancshares Incorporated Notes to Consolidated Financial Statements

1. SIGNIFICANT ACCOUNTING POLICIES

Nature of Operations — Huntington Bancshares Incorporated (Huntington or the Company) is a multi-state

diversified regional bank holding company organized under Maryland law in 1966 and headquartered in Columbus,

Ohio. Through its subsidiaries, including its bank subsidiary, The Huntington National Bank (the Bank), Huntington

is engaged in providing full-service commercial, small business, consumer banking services, mortgage banking

services, automobile financing, equipment leasing, investment management, trust services, brokerage services,

customized insurance programs, and other financial products and services. Huntington’s banking offices are located

in Ohio, Michigan, Pennsylvania, Indiana, West Virginia, and Kentucky. Select financial services and other

activities are also conducted in various other states. International banking services are available through the

headquarters office in Columbus, Ohio and a limited purpose office located in the Cayman Islands and another in

Hong Kong.

Basis of Presentation — The Consolidated Financial Statements include the accounts of Huntington and its

majority-owned subsidiaries and are presented in accordance with GAAP. All intercompany transactions and

balances have been eliminated in consolidation. Companies in which Huntington holds more than a 50% voting

equity interest, or a controlling financial interest, or are a VIE in which Huntington has the power to direct the

activities of an entity that most significantly impact the entity’s economic performance and has an obligation to

absorb losses or the right to receive benefits from the VIE which could potentially be significant to the VIE are

consolidated. VIEs are legal entities with insubstantial equity, whose equity investors lack the ability to make

decisions about the entity’s activities, or whose equity investors do not have the right to receive the residual returns

of the entity if they occur. VIEs in which Huntington does not hold the power to direct the activities of the entity that

most significantly impact the entity’s economic performance or does not have an obligation to absorb losses or the

right to receive benefits from the VIE which could potentially be significant to the VIE are not consolidated. For

consolidated entities where Huntington holds less than a 100% interest, Huntington recognizes noncontrolling

interest (included in shareholders’ equity) for the equity held by others and noncontrolling profit or loss (included in

noninterest expense) for the portion of the entity’s earnings attributable to other’s interests. Investments in

companies that are not consolidated are accounted for using the equity method when Huntington has the ability to

exert significant influence. Those investments in nonmarketable securities for which Huntington does not have the

ability to exert significant influence are generally accounted for using the cost method. Investments in private

investment partnerships that are accounted for under the equity method or the cost method are included in accrued

income and other assets and Huntington’s proportional interest in the equity investments’ earnings are included in

other noninterest income. Investment interests accounted for under the cost and equity methods are periodically

evaluated for impairment.

The preparation of financial statements in conformity with GAAP requires Management to make estimates

and assumptions that significantly affect amounts reported in the Consolidated Financial Statements. Huntington

utilizes processes that involve the use of significant estimates and the judgments of Management in determining the

amount of its allowance for credit losses, income taxes deferred tax assets, and contingent liabilities, as well as fair

value measurements of investment securities, derivatives, goodwill, pension assets and liabilities, mortgage

servicing rights, and loans held for sale. As with any estimate, actual results could differ from those estimates.

Certain prior period amounts have been reclassified to conform to the current year’s presentation.

Resale and Repurchase Agreements — Securities purchased under agreements to resell and securities sold

under agreements to repurchase are treated as collateralized financing transactions and are recorded at the amounts

at which the securities were acquired or sold plus accrued interest. The fair value of collateral either received from

or provided to a third party is continually monitored and additional collateral is obtained or requested to be returned

to Huntington in accordance with the agreement.

Securities — Securities purchased with the intention of recognizing short-term profits or which are actively

bought and sold are classified as trading account securities and reported at fair value. The unrealized gains or losses

on trading account securities are recorded in other noninterest income, except for gains and losses on trading

account securities used to hedge the fair value of MSRs, which are included in mortgage banking income. Debt

securities purchased in which Huntington has the positive intent and ability to hold to its maturity are classified as

held-to-maturity securities. Held-to-maturity securities are recorded at amortized cost. All other debt and equity

securities are classified as available-for-sale and other securities. Unrealized gains or losses on available-for-sale and

other securities are reported as a separate component of accumulated OCI in the Consolidated Statements of

Changes in Shareholders’ Equity. Credit-related declines in the value of debt and marketable equity securities that

are considered other-than-temporary are recorded in noninterest income.

Huntington evaluates its investment securities portfolio on a quarterly basis for indicators of

OTTI. Huntington assesses whether OTTI has occurred when the fair value of a debt security is less than the

amortized cost basis at the balance sheet date. Management reviews the amount of unrealized loss, the length of time

the security has been in an unrealized loss position, the credit rating history, market trends of similar security

classes, time remaining to maturity, and the source of both interest and principal payments to identify

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securities which could potentially be impaired. OTTI is considered to have occurred (1) if Huntington intends to sell

the security; (2) if it is more likely than not Huntington will be required to sell the security before recovery of its

amortized cost basis; or (3) the present value of expected cash flows are not sufficient to recover all contractually

required principal and interest payments. For securities that Huntington does not expect to sell, or it is not more

likely than not to be required to sell, the OTTI is separated into credit and noncredit components. A discounted cash

flow analysis, which includes evaluating the timing of the expected cash flows, is completed for all debt securities

subject to credit impairment. The measurement of the credit loss component is equal to the difference between the

debt security’s cost basis and the present value of its expected future cash flows discounted at the security’s

effective yield. The credit-related OTTI, represented by the expected loss in principal, is recognized in noninterest

income. The remaining difference between the security’s fair value and the present value of future expected cash

flows is due to factors that are not credit-related and, therefore, are recognized in OCI. Huntington believes that it

will fully collect the carrying value of securities on which noncredit-related OTTI has been recognized in

OCI. Noncredit-related OTTI results from other factors, including increased liquidity spreads and extension of the

security. For securities which Huntington does expect to sell, or if it is more likely than not Huntington will be

required to sell the security before recovery of its amortized cost basis, all OTTI is recognized in earnings.

Presentation of OTTI is made in the Consolidated Statements of Income on a gross basis with a reduction for the

amount of OTTI recognized in OCI. Once an OTTI is recorded, when future cash flows can be reasonably estimated,

future cash flows are re-allocated between interest and principal cash flows to provide for a level-yield on the

security.

Securities transactions are recognized on the trade date (the date the order to buy or sell is executed). The

carrying value plus any related OCI balance of sold securities is used to compute realized gains and losses. Interest

and dividends on securities, including amortization of premiums and accretion of discounts using the effective

interest method over the period to maturity, are included in interest income.

Nonmarketable equity securities include stock acquired for regulatory purposes, such as Federal Home Loan

Bank stock and Federal Reserve Bank stock. These securities are accounted for at cost, evaluated for impairment,

and included in available-for-sale and other securities.

Loans and Leases — Loans and direct financing leases for which Huntington has the intent and ability to

hold for the foreseeable future, or until maturity or payoff, are classified in the Consolidated Balance Sheets as loans

and leases. Except for loans which are subject to fair value requirements, loans and leases are carried at the principal

amount outstanding, net of unamortized deferred loan origination fees and costs and net of unearned income. Direct

financing leases are reported at the aggregate of lease payments receivable and estimated residual values, net of

unearned and deferred income. Interest income is accrued as earned using the interest method based on unpaid

principal balances. Huntington defers the fees it receives from the origination of loans and leases, as well as the

direct costs of those activities. Huntington also acquires loans at a premium and at a discount to their contractual

values. Huntington amortizes loan discounts, premiums, and net loan origination fees and costs on a level-yield basis

over the estimated lives of the related loans.

Troubled debt restructurings are loans for which the original contractual terms have been modified to provide

a concession to a borrower experiencing financial difficulties. Loan modifications are considered TDRs when the

concessions provided are not available to the borrower through either normal channels or other sources. However,

not all loan modifications are TDRs. Modifications resulting in troubled debt restructurings may include changes to

one or more terms of the loan, including but not limited to, a change in interest rate, an extension of the amortization

period, a reduction in payment amount, and partial forgiveness or deferment of principal or accrued interest.

Residual values on leased equipment are evaluated quarterly for impairment. Impairment of the residual

values of direct financing leases determined to be other than temporary is recognized by writing the leases down to

fair value with a charge to other noninterest expense. Residual value losses arise if the expected fair value at the end

of the lease term is less than the residual value recorded at the lease origination, net of estimated amounts

reimbursable by the lessee. Future declines in the expected residual value of the leased equipment would result in

expected losses of the leased equipment.

For leased equipment, the residual component of a direct financing lease represents the estimated fair value of

the leased equipment at the end of the lease term. Huntington uses industry data, historical experience, and

independent appraisals to establish these residual value estimates. Additional information regarding product life

cycle, product upgrades, as well as insight into competing products are obtained through relationships with industry

contacts and are factored into residual value estimates where applicable.

Loans Held for Sale — Loans and loan commitments in which Huntington does not have the intent and

ability to hold for the foreseeable future are classified as loans held for sale. Loans held for sale (excluding loans

originated or acquired with the intent to sell, which are carried at fair value) are carried at the lower of cost or fair

value less cost to sell. The fair value option is generally elected for mortgage loans held for sale to facilitate hedging

of the loans. Fair value is determined based on collateral value and prevailing market prices for loans with similar

characteristics. Nonmortgage loans held for sale are measured on an aggregate asset basis.

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Allowance for Credit Losses — Huntington maintains two reserves, both of which reflect Management’s

judgment regarding the appropriate level necessary to absorb credit losses inherent in our loan and lease portfolio:

the ALLL and the AULC. Combined, these reserves comprise the total ACL. The determination of the ACL requires

significant estimates, including the timing and amounts of expected future cash flows on impaired loans and leases,

consideration of current economic conditions, and historical loss experience pertaining to pools of homogeneous

loans and leases, all of which may be susceptible to change.

The appropriateness of the ACL is based on Management’s current judgments about the credit quality of the

loan portfolio. These judgments consider on-going evaluations of the loan and lease portfolio, including such factors

as the differing economic risks associated with each loan category, the financial condition of specific borrowers, the

level of delinquent loans, the value of any collateral and, where applicable, the existence of any guarantees or other

documented support. Further, Management evaluates the impact of changes in interest rates and overall economic

conditions on the ability of borrowers to meet their financial obligations when quantifying our exposure to credit

losses and assessing the appropriateness of our ACL at each reporting date. In addition to general economic

conditions and the other factors described above, additional factors also considered include: the impact of increasing

or decreasing residential real estate values; the diversification of CRE loans; the development of new or expanded

Commercial business segments such as healthcare, ABL, and energy, and the overall condition of the manufacturing

industry. Also, the ACL assessment includes the on-going assessment of credit quality metrics, and a comparison of

certain ACL benchmarks to current performance. Management’s determinations regarding the appropriateness of the

ACL are reviewed and approved by the Company’s board of directors.

The ALLL consists of two components: (1) the transaction reserve, which includes a loan level allocation,

specific reserves related to loans considered to be impaired, and loans involved in troubled debt restructurings, and

(2) the general reserve. The transaction reserve component includes both (1) an estimate of loss based on pools of

commercial and consumer loans and leases with similar characteristics and (2) an estimate of loss based on an

impairment review of each impaired C&I and CRE loan greater than $1.0 million. For the C&I and CRE portfolios,

the estimate of loss based on pools of loans and leases with similar characteristics is made by applying a PD factor

and a LGD factor to each individual loan based on a regularly updated loan grade, using a standardized loan grading

system. The PD factor and an LGD factor are determined for each loan grade using statistical models based on

historical performance data. The PD factor considers on-going reviews of the financial performance of the specific

borrower, including cash flow, debt-service coverage ratio, earnings power, debt level, and equity position, in

conjunction with an assessment of the borrower’s industry and future prospects. The LGD factor considers analysis

of the type of collateral and the relative LTV ratio. These reserve factors are developed based on credit migration

models that track historical movements of loans between loan ratings over time and a combination of long-term

average loss experience of our own portfolio and external industry data using a 24-month emergence period.

In the case of more homogeneous portfolios, such as automobile loans, home equity loans, and residential

mortgage loans, the determination of the transaction reserve also incorporates PD and LGD factors. The estimate of

loss is based on pools of loans and leases with similar characteristics. The PD factor considers current credit scores

unless the account is delinquent, in which case a higher PD factor is used. The credit score provides a basis for

understanding the borrower’s past and current payment performance, and this information is used to estimate

expected losses over the 12-month emergence period. The performance of first-lien loans ahead of our junior-lien

loans is available to use as part of our updated score process. The LGD factor considers analysis of the type of

collateral and the relative LTV ratio. Credit scores, models, analyses, and other factors used to determine both the

PD and LGD factors are updated frequently to capture the recent behavioral characteristics of the subject portfolios,

as well as any changes in loss mitigation or credit origination strategies, and adjustments to the reserve factors are

made as required. Models utilized in the ALLL estimation process are subject to the Company’s model validation

policies.

The general reserve consists of the economic reserve and risk-profile reserve components. The economic

reserve component considers the impact of changing market and economic conditions on portfolio performance. The

risk-profile component considers items unique to our structure, policies, processes, and portfolio composition, as

well as qualitative measurements and assessments of the loan portfolios including, but not limited to, management

quality, concentrations, portfolio composition, industry comparisons, and internal review functions.

During the year, we made enhancements to our commercial risk rating system used for assessing credit risk

when determining our ACL. The enhancements provide greater granularity in overall corporate risk ratings and

incorporate a broader set of financial metrics in the determination of the PD and LGD. The PD and LGD factors

combine to represent the transaction reserve component for a given credit exposure.

The estimate for the AULC is determined using the same procedures and methodologies as used for the

ALLL. The loss factors used in the AULC are the same as the loss factors used in the ALLL while also considering

a historical utilization of unused commitments. The AULC is recorded in accrued expenses and other liabilities in

the Consolidated Balance Sheets.

Nonaccrual and Past Due Loans — Loans are considered past due when the contractual amounts due with

respect to principal and interest are not received within 30 days of the contractual due date.

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Any loan in any portfolio may be placed on nonaccrual status prior to the policies described below when

collection of principal or interest is in doubt. When a borrower with debt is discharged in a Chapter 7 bankruptcy

and not reaffirmed by the borrower, the loan is determined to be collateral dependent and placed on nonaccrual

status, unless there is a co-borrower.

All classes within the C&I and CRE portfolios (except for purchased credit-impaired loans) are placed on

nonaccrual status at 90-days past due. First-lien home equity loans are placed on nonaccrual status at 150-days past

due. Junior-lien home equity loans are placed on nonaccrual status at the earlier of 120-days past due or when the

related first-lien loan has been identified as nonaccrual. Automobile and other consumer loans are generally

charged-off when the loan is 120-days past due. Residential mortgage loans are placed on nonaccrual status at 150-

days past due, with the exception of residential mortgages guaranteed by government agencies which continue to

accrue interest at the rate guaranteed by the government agency. We are reimbursed from the government agency for

reasonable expenses incurred in servicing loans. The FHA reimburses us for 66% of expenses, and the VA

reimburses us at a maximum percentage of guarantee which is established for each individual loan. We have not

experienced either material losses in excess of guarantee caps or significant delays or rejected claims from the

related government entity.

For all classes within all loan portfolios, when a loan is placed on nonaccrual status, any accrued interest

income is reversed with current year accruals charged to interest income, and prior year amounts charged-off as a

credit loss.

For all classes within all loan portfolios, cash receipts received on NALs are applied against principal until the

loan or lease has been collected in full, after which time any additional cash receipts are recognized as interest

income. However, for secured non-reaffirmed debt in a Chapter 7 bankruptcy, payments are applied to principal and

interest when the borrower has demonstrated a capacity to continue payment of the debt and collection of the debt is

reasonably assured. For unsecured non-reaffirmed debt in a Chapter 7 bankruptcy where the carrying value has been

fully charged-off, payments are recorded as loan recoveries.

Regarding all classes within the C&I and CRE portfolios, the determination of a borrower’s ability to make

the required principal and interest payments is based on an examination of the borrower’s current financial

statements, industry, management capabilities, and other qualitative measures. For all classes within the consumer

loan portfolio, the determination of a borrower’s ability to make the required principal and interest payments is

based on multiple factors, including number of days past due and, in some instances, an evaluation of the borrower’s

financial condition. When, in Management’s judgment, the borrower’s ability to make required principal and interest

payments resumes and collectability is no longer in doubt, the loan is returned to accrual status. For these loans that

have been returned to accrual status, cash receipts are applied according to the contractual terms of the loan.

Charge-off of Uncollectible Loans — Any loan in any portfolio may be charged-off prior to the policies

described below if a loss confirming event has occurred. Loss confirming events include, but are not limited to,

bankruptcy (unsecured), continued delinquency, foreclosure, or receipt of an asset valuation indicating a collateral

deficiency and that asset is the sole source of repayment. Additionally, discharged, collateral dependent non-

reaffirmed debt in Chapter 7 bankruptcy filings will result in a charge-off to estimated collateral value, less

anticipated selling costs.

C&I and CRE loans are either charged-off or written down to net realizable value at 90-days past due.

Automobile loans and other consumer loans are charged-off at 120-days past due. First-lien and junior-lien home

equity loans are charged-off to the estimated fair value of the collateral, less anticipated selling costs, at 150-days

past due and 120-days past due, respectively. Residential mortgages are charged-off to the estimated fair value of the

collateral at 150-days past due.

Impaired Loans — For all classes within the C&I and CRE portfolios, all loans with an outstanding balance

of $1.0 million or greater are evaluated on a quarterly basis for impairment. Generally, consumer loans within any

class are not individually evaluated on a regular basis for impairment. All TDRs, regardless of the outstanding

balance amount, are also considered to be impaired. Loans acquired with evidence of deterioration in credit quality

since origination for which it is probable at acquisition that all contractually required payments will not be collected

are also considered to be impaired.

Once a loan has been identified for an assessment of impairment, the loan is considered impaired when, based

on current information and events, it is probable that all amounts due according to the contractual terms of the loan

agreement will not be collected. This determination requires significant judgment and use of estimates, and the

eventual outcome may differ significantly from those estimates.

When a loan in any class has been determined to be impaired, the amount of the impairment is measured using

the present value of expected future cash flows discounted at the loan’s effective interest rate or, as a practical

expedient, the observable market price of the loan, or the fair value of the collateral, less anticipated selling costs, if

the loan is collateral dependent. When the present value of expected future cash flows is used, the effective interest

rate is the original contractual interest rate of the loan adjusted for any premium or discount. When the contractual

interest rate is variable, the effective interest rate of the loan changes over time. A specific reserve is established as a

component of the ALLL when a loan has been determined to be impaired. Subsequent to the initial measurement of

impairment, if there is a significant change to the impaired loan’s expected future cash flows, or if actual cash flows

are significantly different from the cash flows previously estimated, Huntington recalculates the impairment and

appropriately adjusts the specific reserve. Similarly, if Huntington measures impairment based on the observable

market price of an impaired loan or the fair value of the collateral of an impaired collateral dependent loan,

Huntington will adjust the specific reserve.

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When a loan within any class is impaired, the accrual of interest income is discontinued unless the receipt of

principal and interest is no longer in doubt. Interest income on TDRs is accrued when all principal and interest is

expected to be collected under the post-modification terms. Cash receipts received on nonaccruing impaired loans

within any class are generally applied entirely against principal until the loan has been collected in full, after which

time any additional cash receipts are recognized as interest income. Cash receipts received on accruing impaired

loans within any class are applied in the same manner as accruing loans that are not considered impaired.

Purchased Credit-Impaired Loans — Purchased loans with evidence of deterioration in credit quality since

origination for which it is probable at acquisition that we will be unable to collect all contractually required

payments are considered to be credit impaired. Purchased credit-impaired loans are initially recorded at fair value,

which is estimated by discounting the cash flows expected to be collected at the acquisition date. Because the

estimate of expected cash flows reflects an estimate of future credit losses expected to be incurred over the life of

the loans, an allowance for credit losses is not recorded at the acquisition date. The excess of cash flows expected at

acquisition over the estimated fair value, referred to as the accretable yield, is recognized in interest income over the

remaining life of the loan, or pool of loans, on a level-yield basis. The difference between the contractually required

payments at acquisition and the cash flows expected to be collected at acquisition is referred to as the nonaccretable

difference. A subsequent decrease in the estimate of cash flows expected to be received on purchased credit-

impaired loans generally results in the recognition of an allowance for credit losses. Subsequent increases in cash

flows result in reversal of any nonaccretable difference (or allowance for loan and lease losses to the extent any has

been recorded) with a positive impact on interest income subsequently recognized. The measurement of cash flows

involves assumptions and judgments for interest rates, prepayments, default rates, loss severity, and collateral

values. All of these factors are inherently subjective and significant changes in the cash flow estimates over the life

of the loan can result.

Transfers of Financial Assets and Securitizations — Transfers of financial assets in which we have

surrendered control over the transferred assets are accounted for as sales. In assessing whether control has been

surrendered, we consider whether the transferee would be a consolidated affiliate, the existence and extent of any

continuing involvement in the transferred financial assets, and the impact of all arrangements or agreements made

contemporaneously with, or in contemplation of, the transfer, even if they were not entered into at the time of

transfer. Control is generally considered to have been surrendered when (i) the transferred assets have been legally

isolated from us or any of our consolidated affiliates, even in bankruptcy or other receivership, (ii) the transferee (or,

if the transferee is an entity whose sole purpose is to engage in securitization or asset-backed financing that is

constrained from pledging or exchanging the assets it receives, each third-party holder of its beneficial interests) has

the right to pledge or exchange the assets (or beneficial interests) it received without any constraints that provide

more than a trivial benefit to us, and (iii) neither we nor our consolidated affiliates and agents have (a) both the right

and obligation under any agreement to repurchase or redeem the transferred assets before their maturity, (b) the

unilateral ability to cause the holder to return specific financial assets that also provides us with a more-than-trivial

benefit (other than through a cleanup call) or (c) an agreement that permits the transferee to require us to repurchase

the transferred assets at a price so favorable that it is probable that it will require us to repurchase them.

If the sale criteria are met, the transferred financial assets are removed from our balance sheet and a gain or

loss on sale is recognized. If the sale criteria are not met, the transfer is recorded as a secured borrowing in which

the assets remain on our balance sheet and the proceeds from the transaction are recognized as a liability. For the

majority of financial asset transfers, it is clear whether or not we have surrendered control. For other transfers, such

as in connection with complex transactions or where we have continuing involvement, we generally obtain a legal

opinion as to whether the transfer results in a true sale by law.

We have historically securitized certain automobile receivables. Gains and losses on the loans and leases sold

and servicing rights associated with loan and lease sales are determined when the related loans or leases are sold to

either a securitization trust or third party. For loan or lease sales with servicing retained, a servicing asset is recorded

at fair value for the right to service the loans sold.

Derivative Financial Instruments — A variety of derivative financial instruments, principally interest rate

swaps, caps, floors, and collars, are used in asset and liability management activities to protect against the risk of

adverse price or interest rate movements. These instruments provide flexibility in adjusting Huntington’s sensitivity

to changes in interest rates without exposure to loss of principal and higher funding requirements.

Huntington also uses derivatives, principally loan sale commitments, in hedging its mortgage loan interest rate

lock commitments and its mortgage loans held for sale. Mortgage loan sale commitments and the related interest

rate lock commitments are carried at fair value on the Consolidated Balance Sheets with changes in fair value

reflected in mortgage banking income. Huntington also uses certain derivative financial instruments to offset

changes in value of its MSRs. These derivatives consist primarily of forward interest rate agreements and forward

mortgage contracts. The derivative instruments used are not designated as hedges. Accordingly, such derivatives are

recorded at fair value with changes in fair value reflected in mortgage banking income.

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Derivative financial instruments are recorded in the Consolidated Balance Sheets as either an asset or a

liability (in accrued income and other assets or accrued expenses and other liabilities, respectively) and measured at

fair value. On the date a derivative contract is entered into, we designate it as either:

• a qualifying hedge of the fair value of a recognized asset or liability or of an unrecognized firm

commitment (fair value hedge);

• a qualifying hedge of the variability of cash flows to be received or paid related to a recognized asset

liability or forecasted transaction (cash flow hedge); or

• a trading instrument or a non-qualifying (economic) hedge.

Changes in the fair value of a derivative that has been designated and qualifies as a fair value hedge, along

with the changes in the fair value of the hedged asset or liability that is attributable to the hedged risk, are recorded

in current period earnings. Changes in the fair value of a derivative that has been designated and qualifies as a cash

flow hedge, to the extent effective as a hedge, are recorded in accumulated other comprehensive income, net of

income taxes, and reclassified into earnings in the period during which the hedged item affects earnings.

Ineffectiveness in the hedging relationship is reflected in current period earnings. Changes in the fair value of

derivatives held for trading purposes or which do not qualify for hedge accounting are reported in current period

earnings.

For those derivatives to which hedge accounting is applied, Huntington formally documents the hedging

relationship and the risk management objective and strategy for undertaking the hedge. This documentation

identifies the hedging instrument, the hedged item or transaction, the nature of the risk being hedged, and, unless the

hedge meets all of the criteria to assume there is no ineffectiveness, the method that will be used to assess the

effectiveness of the hedging instrument and how ineffectiveness will be measured. The methods utilized to assess

retrospective hedge effectiveness, as well as the frequency of testing, vary based on the type of item being hedged

and the designated hedge period. For specifically designated fair value hedges of certain fixed-rate debt, Huntington

utilizes the short-cut method when certain criteria are met. For other fair value hedges of fixed-rate debt, including

certificates of deposit, Huntington utilizes the regression method to evaluate hedge effectiveness on a quarterly

basis. For fair value hedges of portfolio loans, the regression method is used to evaluate effectiveness on a daily

basis. For cash flow hedges, the regression method is applied on a quarterly basis.

Hedge accounting is discontinued prospectively when:

• the derivative is no longer effective or expected to be effective in offsetting changes in the fair value or

cash flows of a hedged item (including firm commitments or forecasted transactions);

• the derivative expires or is sold, terminated, or exercised;

• it is unlikely that a forecasted transaction will occur;

• the hedged firm commitment no longer meets the definition of a firm commitment; or

• the designation of the derivative as a hedging instrument is removed.

When hedge accounting is discontinued because it is determined that the derivative no longer qualifies as an

effective fair value or cash flow hedge, the derivative will continue to be carried on the balance sheet at fair value.

In the case of a discontinued fair value hedge of a recognized asset or liability, as long as the hedged item

continues to exist on the balance sheet, the hedged item will no longer be adjusted for changes in fair value. The

basis adjustment that had previously been recorded to the hedged item during the period from the hedge designation

date to the hedge discontinuation date is recognized as an adjustment to the yield of the hedged item over the

remaining life of the hedged item.

In the case of a discontinued cash flow hedge of a recognized asset or liability, as long as the hedged item

continues to exist on the balance sheet, the effective portion of the changes in fair value of the hedging derivative

will no longer be recorded to other comprehensive income. The balance applicable to the discontinued hedging

relationship will be recognized in earnings over the remaining life of the hedged item as an adjustment to yield. If

the discontinued hedged item was a forecasted transaction that is not expected to occur, any amounts recorded on the

balance sheet related to the hedged item, including any amounts recorded in accumulated other comprehensive

income, are immediately reclassified to current period earnings.

In the case of either a fair value hedge or a cash flow hedge, if the previously hedged item is sold or

extinguished, the basis adjustment to the underlying asset or liability or any remaining unamortized other

comprehensive income balance will be reclassified to current period earnings.

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In all other situations in which hedge accounting is discontinued, the derivative will be carried at fair value on

the consolidated balance sheets, with changes in its fair value recognized in current period earnings unless re-

designated as a qualifying hedge.

Like other financial instruments, derivatives contain an element of credit risk, which is the possibility that

Huntington will incur a loss because the counterparty fails to meet its contractual obligations. Notional values of

interest rate swaps and other off-balance sheet financial instruments significantly exceed the credit risk associated

with these instruments and represent contractual balances on which calculations of amounts to be exchanged are

based. Credit exposure is limited to the sum of the aggregate fair value of positions that have become favorable to

Huntington, including any accrued interest receivable due from counterparties. Potential credit losses are mitigated

through careful evaluation of counterparty credit standing, selection of counterparties from a limited group of high

quality institutions, collateral agreements, and other contract provisions. Huntington considers the value of collateral

held and collateral provided in determining the net carrying value of derivatives.

Huntington offsets the fair value amounts recognized for derivative instruments and the fair value for the right

to reclaim cash collateral or the obligation to return cash collateral arising from derivative instrument(s) recognized

at fair value executed with the same counterparty under a master netting arrangement.

Repossessed Collateral — Repossessed collateral, also referred to as other real estate owned (OREO), is

comprised principally of commercial and residential real estate properties obtained in partial or total satisfaction of

loan obligations, and is carried at the lower of cost or fair value. Collateral obtained in satisfaction of a loan is

recorded at the estimated fair value less anticipated selling costs based upon the property’s appraised value at the

date of foreclosure, with any difference between the fair value of the property and the carrying value of the loan

recorded as a charge-off. Subsequent declines in value are reported as adjustments to the carrying amount and are

recorded in noninterest expense. Gains or losses resulting from the sale of collateral are recognized in noninterest

expense at the date of sale.

Collateral — We pledge assets as collateral as required for various transactions including security repurchase

agreements, public deposits, loan notes, derivative financial instruments, short-term borrowings and long-term

borrowings. Assets that have been pledged as collateral, including those that can be sold or repledged by the secured

party, continue to be reported on our Consolidated Balance Sheets.

We also accept collateral, primarily as part of various transactions including derivative and security resale

agreements. Collateral accepted by us, including collateral that we can sell or repledge, is excluded from our

Consolidated Balance Sheets.

The market value of collateral we have accepted or pledged is regularly monitored and additional collateral is

obtained or provided as necessary to ensure appropriate collateral coverage in these transactions.

Premises and Equipment — Premises and equipment are stated at cost, less accumulated depreciation and

amortization. Depreciation is computed principally by the straight-line method over the estimated useful lives of the

related assets. Buildings and building improvements are depreciated over an average of 30 to 40 years and 10 to 30

years, respectively. Land improvements and furniture and fixtures are depreciated over an average of 5 to 20 years,

while equipment is depreciated over a range of 3 to 10 years. Leasehold improvements are amortized over the lesser

of the asset’s useful life or the lease term, including any renewal periods for which renewal is reasonably assured.

Maintenance and repairs are charged to expense as incurred, while improvements that extend the useful life of an

asset are capitalized and depreciated over the remaining useful life. Premises and equipment is evaluated for

impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be

recoverable.

Mortgage Servicing Rights — Huntington recognizes the rights to service mortgage loans as separate assets,

which are included in accrued income and other assets in the Consolidated Balance Sheets when purchased, or when

servicing is contractually separated from the underlying mortgage loans by sale or securitization of the loans with

servicing rights retained.

For loan sales with servicing retained, a servicing asset is recorded at fair value for the right to service the

loans sold. To determine the fair value of a MSR, Huntington uses an option adjusted spread cash flow analysis

incorporating market implied forward interest rates to estimate the future direction of mortgage and market interest

rates. The forward rates utilized are derived from the current yield curve for U.S. dollar interest rate swaps and are

consistent with pricing of capital markets instruments. The current and projected mortgage interest rate influences

the prepayment rate and, therefore, the timing and magnitude of the cash flows associated with the MSR. Expected

mortgage loan prepayment assumptions are derived from a third party model. Management believes these

prepayment assumptions are consistent with assumptions used by other market participants valuing similar MSRs.

Servicing revenues on mortgage loans are included in mortgage banking income.

At the time of initial capitalization, MSRs may be grouped into servicing classes based on the availability of

market inputs used in determining fair value and the method used for managing the risks of the servicing assets.

MSR assets are recorded using the fair value method or the amortization method. The election of the fair value or

amortization method is made at the time each servicing

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class is established. All newly created MSRs since 2009 were recorded using the amortization method. Any change

in the fair value of MSRs carried under the fair value method, as well as amortization and impairment of MSRs

under the amortization method, during the period is recorded in mortgage banking income, which is reflected in the

Consolidated Statements of Income. Huntington hedges the value of certain MSRs using derivative instruments and

trading securities. Changes in fair value of these derivatives and trading account securities are reported as a

component of mortgage banking income.

Goodwill and Other Intangible Assets — Under the acquisition method of accounting, the net assets of

entities acquired by Huntington are recorded at their estimated fair value at the date of acquisition. The excess cost

of the acquisition over the fair value of net assets acquired is recorded as goodwill. Other intangible assets are

amortized either on an accelerated or straight-line basis over their estimated useful lives. Goodwill is evaluated for

impairment on an annual basis at October 1st of each year or whenever events or changes in circumstances indicate

that the carrying value may not be recoverable. Other intangible assets are reviewed for impairment whenever events

or changes in circumstances indicate that the carrying amount of the asset may not be recoverable.

Pension and Other Postretirement Benefits — We recognize the funded status of the postretirement benefit

plans on the Consolidated Balance Sheets. Net postretirement benefit cost charged to current earnings related to

these plans is based on various actuarial assumptions regarding expected future experience.

Certain employees are participants in various defined contribution and other non-qualified supplemental

retirement plans. Our contributions to these plans are charged to current earnings.

In addition, we maintain a 401(k) plan covering substantially all employees. Employer contributions to the

plan, which are charged to current earnings, are based on employee contributions.

Share-Based Compensation — We use the fair value based method of accounting for awards of HBAN stock

granted to employees under various stock option and restricted share plans. Stock compensation costs are recognized

prospectively for all new awards granted under these plans. Compensation expense relating to share options is

calculated using a methodology that is based on the underlying assumptions of the Black-Scholes option pricing

model and is charged to expense over the requisite service period (e.g. vesting period). Compensation expense

relating to restricted stock awards is based upon the fair value of the awards on the date of grant and is charged to

earnings over the requisite service period (e.g., vesting period) of the award.

Stock Repurchases — Acquisitions of Huntington stock are recorded at cost. The re-issuance of shares is

recorded at weighted-average cost.

Income Taxes — Income taxes are accounted for under the asset and liability method. Accordingly, deferred

tax assets and liabilities are recognized for the future book and tax consequences attributable to temporary

differences between the financial statement carrying amounts of existing assets and liabilities and their respective

tax bases. Deferred tax assets and liabilities are determined using enacted tax rates expected to apply in the year in

which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and

liabilities of a change in tax rates is recognized in income at the time of enactment of such change in tax rates. Any

interest or penalties due for payment of income taxes are included in the provision for income taxes. To the extent

that we do not consider it more likely than not that a deferred tax asset will be recovered, a valuation allowance is

recorded. All positive and negative evidence is reviewed when determining how much of a valuation allowance is

recognized on a quarterly basis. In determining the requirements for a valuation allowance, sources of possible

taxable income are evaluated including future reversals of existing taxable temporary differences, future taxable

income exclusive of reversing temporary differences and carryforwards, taxable income in appropriate carryback

years, and tax-planning strategies. Huntington applies a more likely than not recognition threshold for all tax

uncertainties.

Bank Owned Life Insurance — Huntington’s bank owned life insurance policies are recorded at their cash

surrender value. Huntington recognizes tax-exempt income from the periodic increases in the cash surrender value

of these policies and from death benefits. A portion of the cash surrender value is supported by holdings in separate

accounts. Book value protection for the separate accounts is provided by the insurance carriers and a highly rated

major bank.

Fair Value Measurements — The Company records or discloses certain of its assets and liabilities at fair

value. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an

exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between

market participants on the measurement date. Fair value measurements are classified within one of three levels in a

valuation hierarchy based upon the transparency of inputs to the valuation of an asset or liability as of the

measurement date. The three levels are defined as follows:

Level 1 – inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities

in active markets.

Level 2 – inputs to the valuation methodology include quoted prices for similar assets and liabilities in active

markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially

the full term of the financial instrument.

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Level 3 – inputs to the valuation methodology are unobservable and significant to the fair value measurement.

A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of input

that is significant to the fair value measurement.

Segment Results — Accounting policies for the business segments are the same as those used in the

preparation of the Consolidated Financial Statements with respect to activities specifically attributable to each

business segment. However, the preparation of business segment results requires Management to establish

methodologies to allocate funding costs and benefits, expenses, and other financial elements to each business

segment. Changes are made in these methodologies as appropriate.

Statement of Cash Flows — Cash and cash equivalents are defined as cash and due from banks which

includes amounts on deposit with the Federal Reserve and federal funds sold and securities purchased under resale

agreements.

Transactions with Related Parties — In the normal course of business, we may enter into transactions with

various related parties. These transactions occur at prevailing market rates and terms and include funding

arrangements, transfers of financial assets, administrative and operational support, and other miscellaneous services.

2. ACCOUNTING STANDARDS UPDATE

ASU 2011-04 — Fair Value Measurement (Topic 820), Amendments to Achieve Common Fair Value

Measurement and Disclosure Requirements in U.S. GAAP and IFRSs. The ASU amends Topic 820 to add both

additional clarifications to existing fair value measurement and disclosure requirements and changes to existing

principles and disclosure guidance. Clarifications were made to the relevancy of the highest and best use valuation

concept, measurement of an instrument classified in an entity’s shareholders’ equity and disclosure of quantitative

information about the unobservable inputs for level 3 fair value measurements. Changes to existing principles and

disclosures included measurement of financial instruments managed within a portfolio, the application of premiums

and discounts in fair value measurement, and additional disclosures related to fair value measurements. The updated

guidance was effective for our quarterly and annual financial statements for 2012 (See Note 19). The amendments

did not have a material impact on Huntington’s Consolidated Financial Statements.

ASU 2011-05 — Other Comprehensive Income (Topic 220), Presentation of Comprehensive Income. The ASU

amends Topic 220 to require an entity to present the total of comprehensive income, the components of net income,

and the components of other comprehensive income either in a single continuous statement of comprehensive

income or in two separate but consecutive statements. An entity is also required to present on the face of the

financial statements reclassification adjustments for items that are reclassified from other comprehensive income to

net income in the statement(s) where the components of net income and the components of other comprehensive

income are presented. The amendments do not change items that must be reported in other comprehensive income or

when an item of other comprehensive income must be reclassified to net income, only the format for presentation.

Other than the deferral of the requirements related to reclassifications, the updated guidance was effective for our

quarterly and annual financial statements for 2012. Also see ASU 2013-02.

ASU 2011-10 — Property, Plant, and Equipment (Topic 360): Derecognition of In-Substance Real Estate. The

ASU amends Topic 360 to clarify that when a reporting entity ceases to have a controlling financial interest (as

described in ASC 810 “Consolidation”) in a subsidiary that is in-substance real estate as a result of default on the

subsidiary’s nonrecourse debt, the reporting entity should apply the guidance in Subtopic 360-20 to determine

whether it should derecognize the in-substance real estate. The amendments were effective for our financial

statements beginning in the third quarter of 2012. The amendments did not have a material impact on Huntington’s

Consolidated Financial Statements.

ASU 2011-11 — Balance Sheet (Topic 210): Disclosures about Offsetting Assets and Liabilities. The ASU

amends Topic 210 by requiring additional improved information to be disclosed regarding financial instruments and

derivative instruments that are offset in accordance with the conditions under ASC 210-20-45 or ASC 810-10-45 or

subject to an enforceable master netting arrangement or similar agreement. The amendments were effective for

annual and interim reporting periods beginning on or after January 1, 2013. The disclosures required by the

amendments should be applied retrospectively for all comparative periods presented. The amendments did not have

a material impact on Huntington’s Consolidated Financial Statements.

ASU 2013-01— Balance Sheet (Topic 210): Clarifying the Scope of Disclosures about Offsetting Assets and

Liabilities. The ASU amends Update 2011-11 to clarify that the scope applies to derivatives, repurchase and reverse

repurchase agreements, and securities borrowing and lending transactions that are either offset in accordance with

Section 210-20-45 or Section 815-10-45 or subject to master netting or similar arrangements. Other types of

financial assets and liabilities subject to master netting or similar arrangements are not subject to the disclosure

requirements in Update 2011-11. The amendments were effective for fiscal years beginning on or after January 1,

2013, and interim periods within those annual periods. The amendments did not have a material impact on

Huntington’s Consolidated Financial Statements.

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ASU 2013-02— Comprehensive Income (Topic 220): Reporting of Amounts Reclassified Out of Accumulated

Other Comprehensive Income. The ASU requires an entity to provide information about the amounts reclassified

out of accumulated other comprehensive income by component. In addition, an entity is required to present, either

on the face of the statement where net income is presented or in the notes, significant amounts reclassified out of

accumulated other comprehensive income by the respective line items of net income but only if the amount

reclassified is required under U.S. GAAP to be reclassified to net income in its entirety in the same reporting period.

The amendments were effective prospectively for reporting periods beginning after December 15, 2012. The

amendments did not have a material impact on Huntington’s Consolidated Financial Statements.

ASU 2013-11— Income Taxes (Topic 740): Presentation of an Unrecognized Tax Benefit When a Net

Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists. The ASU requires

that an unrecognized tax benefit, or a portion of an unrecognized tax benefit, be presented in the financial statements

as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit

carryforward. However, if a net operating loss carryforward, a similar tax loss, or a tax credit carryforward is not

available at the reporting date under the tax law of the applicable jurisdiction to settle any additional income taxes

that would result from the disallowance of a tax position or the tax law of the applicable jurisdiction does not require

the entity to use, and the entity does not intend to use, the deferred tax asset for such purpose, the unrecognized tax

benefit should be presented in the financial statements as a liability and should not be combined with deferred tax

assets. The amendments were effective for fiscal years, and interim periods within those years, beginning after

December 15, 2013. The amendments are not expected to have a material impact on Huntington’s Consolidated

Financial Statements.

ASU 2014-01— Investments (Topic 323): Accounting for Investments in Affordable Housing Projects. The

ASU revises the necessary criteria that need to be met in order for an entity to account for investments in affordable

housing projects net of the provision for income taxes. It also changes the method of recognition from an effective

amortization approach to a proportional amortization approach. Additional disclosures were also set forth in this

update. The amendments are effective for annual periods, and interim reporting periods within those annual periods,

beginning after December 15, 2014. The amendments are required to be applied retrospectively to all periods

presented. Early adoption is permitted. Management is currently evaluating the impact of the guidance on

Huntington’s Consolidated Financial Statements.

ASU 2014-04— Receivables (Topic 310): Reclassification of Residential Real Estate Collateralized Consumer

Mortgage Loans upon Foreclosure. The ASU clarifies that an in substance repossession or foreclosure occurs

upon either the creditor obtaining legal title to the residential real estate property or the borrower conveying all

interest in the residential real estate property to the creditor to satisfy that loan through completion of a deed in lieu

of foreclosure or through a similar legal agreement. The amendments are effective for annual periods, and interim

reporting periods within those annual periods, beginning after December 15, 2014. The amendments may be adopted

using either a modified retrospective transition method or a prospective transition method. Early adoption is

permitted. Management does not believe the amendments will have a material impact on Huntington’s Consolidated

Financial Statements.

3. LOANS AND LEASES AND ALLOWANCE FOR CREDIT LOSSES

Loans and leases for which Huntington has the intent and ability to hold for the foreseeable future, or until

maturity or payoff, are classified in the Consolidated Balance Sheets as loans and leases. Except for loans which are

accounted for at fair value, loans and leases are carried at the principal amount outstanding, net of unamortized

deferred loan origination fees and costs and net of unearned income. At December 31, 2013 and 2012, the aggregate

amount of these net unamortized deferred loan origination fees and net unearned income was $192.9 million and

$174.5 million, respectively.

Loan and Lease Portfolio Composition

The table below summarizes the Company’s primary portfolios. For ACL purposes, these portfolios are

further disaggregated into classes which are also summarized in the table below.

Portfolio Class Commercial and industrial Owner occupied

Purchased credit-impaired Other commercial and industrial

Commercial real estate Retail properties Multi family Office Industrial and warehouse Purchased credit-impaired Other commercial real estate

Automobile NA (1)

Home equity Secured by first-lien Secured by junior-lien

Residential mortgage Residential mortgage Purchased credit-impaired

Other consumer Other consumer Purchased credit-impaired

(1) Not applicable. The automobile loan portfolio is not further segregated into classes.

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Effective December 31, 2013 approximately $600.4 million of direct purchase municipal instruments were

reclassified from C&I loans to available-for-sale securities.

Direct Financing Leases

Huntington’s loan and lease portfolio includes lease financing receivables consisting of direct financing leases

on equipment, which are included in C&I loans. Lease financing receivables at December 31, 2012 also included a

minimal amount of automobile leases, which were included in Consumer loans. Net investments in lease financing

receivables by category at December 31, 2013 and 2012 were as follows:

At December 31, (dollar amounts in thousands) 2013 2012 Commercial and industrial:

Lease payments receivable $ 1,426,928 $ 1,477,296 Estimated residual value of leased assets 409,184 332,369

Gross investment in commercial lease financing

receivables 1,836,112 1,809,665 Net deferred origination costs 3,105 2,805 Unearned income (165,052 ) (142,904 )

Total net investment in commercial lease financing

receivables $ 1,674,165 $ 1,669,566

Consumer:

Total net investment in consumer lease financing

receivables $ — $ 615

The future lease rental payments due from customers on direct financing leases at December 31, 2013, totaled

$1.4 billion and were as follows: $0.6 billion in 2014, $0.3 billion in 2015, $0.2 billion in 2016, $0.1 billion in 2017,

$0.1 billion in 2018, and $0.1 thereafter.

Fidelity Bank acquisition

On March 30, 2012, Huntington acquired the loans of Fidelity Bank located in Dearborn, Michigan from the

FDIC. Under the agreement, loans were transferred to Huntington and recorded at fair value in accordance with

applicable accounting guidance, ASC 805. The fair values for the loans were estimated using discounted cash flow

analyses using interest rates currently being offered for loans with similar terms (Level 3), and reflected an estimate

of probable losses and the credit risk associated with the loans.

Purchased Credit-Impaired Loans

The fair values for purchased credit-impaired loans were estimated using discounted cash flow analyses,

including interest rates currently being offered for loans with similar terms (Level 3) and prepayment assumptions.

This value was reduced by an estimate of probable losses and the credit risk associated with the loans.

The following table presents a rollforward of the accretable yield for the year ended December 31, 2013 and

2012:

(dollar amounts in thousands) 2013 2012 Balance at January 1, $ 23,251 $ — Impact of acquisition on March 30, 2012 — 27,586 Adjustments resulting from changes in purchase price

allocation — 3,625 Accretion (15,931 ) (7,960 ) Reclassification from nonaccretable difference 20,675 —

Balance at December 31, $ 27,995 $ 23,251

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The allowance for loan losses recorded on the purchased credit-impaired loan portfolio at December 31, 2013

and 2012 was $2.4 million and none, respectively. The following table reflects the ending and unpaid balances of all

contractually required payments and carrying amounts of the acquired loans at December 31, 2013 and

December 31, 2012:

December 31, 2013 December 31, 2012

(in thousands) Ending Balance

Unpaid Balance

Ending Balance

Unpaid Balance

Commercial and industrial $ 35,526 $ 50,798 $ 54,472 $ 80,294 Commercial real estate 82,073 154,869 126,923 226,093 Residential mortgage 2,498 3,681 2,243 4,104 Other consumer 129 219 140 245

Total $ 120,226 $ 209,567 $ 183,778 $ 310,736

Loan Purchases and Sales

The following table summarizes significant portfolio loan purchase and sale activity for the years ended

December 31, 2013, and 2012. The table below excludes mortgage loans originated for sale.

Commercial

and Industrial Commercial Real Estate Automobile

Home Equity

Residential Mortgage

Other Consumer Total

(dollar amounts in thousands) Portfolio loans purchased

during the:

Year ended December 31,

2013 $ 109,723 $ — $ — $ — $ — $ — $ 109,723 Year ended December 31,

2012 568,467 378,122 — 13,025 62,324 85 1,022,023 Portfolio loans sold or

transferred to loans

held for sale during

the:

Year ended December 31,

2013 225,930 4,767 — — 205,334 — 436,031 Year ended December 31,

2012 238,121 74,703 2,783,748 — 389,603 — 3,486,175

In 2012, $2.3 billion automobile loans were securitized with the resulting residual sold. In 2013, Huntington

did not securitize any automobile loans. The securitizations were treated as a sale.

NALs and Past Due Loans

The following table presents NALs by loan class for the years ended December 31, 2013 and 2012 (1):

December 31, (dollar amounts in thousands) 2013 2012 Commercial and industrial:

Owner occupied $ 38,321 $ 53,009 Other commercial and industrial 18,294 37,696

Total commercial and industrial $ 56,615 $ 90,705 Commercial real estate:

Retail properties $ 27,328 $ 31,791 Multi family 9,289 19,765 Office 18,995 30,341 Industrial and warehouse 6,310 6,841 Other commercial real estate 11,495 38,390

Total commercial real estate $ 73,417 $ 127,128 Automobile $ 6,303 $ 7,823 Home equity:

Secured by first-lien $ 36,288 $ 27,091 Secured by junior-lien 29,901 32,434

Total home equity $ 66,189 $ 59,525 Residential mortgage $ 119,532 $ 122,452 Other consumer $ — $ —

Total nonaccrual loans $ 322,056 $ 407,633

(1) December 31, 2013 and 2012, amounts included $75.5 million and $60.1 million related to Chapter 7 bankruptcy loans.

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The amount of interest that would have been recorded under the original terms for total NAL loans was $23.4

million, $40.4 million, and $38.4 million for 2013, 2012, and 2011, respectively. The total amount of interest

recorded to interest income for these loans was $5.0 million, $4.8 million, and $5.1 million in 2013, 2012, and 2011,

respectively.

The following table presents an aging analysis of loans and leases for the years ended December 31, 2013 and

2012 (1):

December 31, 2013 (dollar amounts in thousands) Past Due

Total Loans and Leases

90 or more days past due and accruing 30-59 days

60-

89 days 90 or more days Total Current Commercial and

industrial:

Owner occupied $ 5,935 $ 1,879 $ 25,658 $ 33,472 $ 4,314,400 $ 4,347,872 $ —

Purchased credit-

impaired 241 433 14,562 15,236 20,290 35,526 14,562 (2) Other commercial

and industrial 10,342 3,075 11,210 24,627 13,186,251 13,210,878 —

Total commercial and

industrial $ 16,518 $ 5,387 $ 51,430 $ 73,335 $ 17,520,941 $ 17,594,276 $ 14,562 Commercial real estate:

Retail properties $ 19,372 $ 1,228 $ 5,252 $ 25,852 $ 1,237,717 $ 1,263,569 $ —

Multi family 2,425 943 6,726 10,094 1,015,497 1,025,591 — Office 1,635 545 12,700 14,880 927,413 942,293 — Industrial and

warehouse 465 3,714 4,395 8,574 464,319 472,893 — Purchased credit-

impaired 1,311 — 39,142 40,453 41,620 82,073 39,142 (2) Other commercial

real estate 5,922 1,134 7,192 14,248 1,049,427 1,063,675 —

Total commercial real

estate $ 31,130 $ 7,564 $ 75,407 $ 114,101 $ 4,735,993 $ 4,850,094 $ 39,142 Automobile $ 45,174 $ 8,863 $ 5,140 $ 59,177 $ 6,579,536 $ 6,638,713 $ 5,055 Home equity:

Secured by first-

lien $ 20,551 $ 8,746 $ 28,472 $ 57,769 $ 4,784,375 $ 4,842,144 $ 6,338 Secured by

junior-lien 28,965 13,071 31,392 73,428 3,420,746 3,494,174 7,645

Total home equity $ 49,516 $ 21,817 $ 59,864 $ 131,197 $ 8,205,121 $ 8,336,318 $ 13,983 Residential mortgage

Residential

mortgage $ 101,584 $ 41,784 $ 158,956 $ 302,324 $ 5,016,266 $ 5,318,590 $ 90,115 (3) Purchased credit-

impaired 194 — 339 533 1,965 2,498 339 (2)

Total residential

mortgage $ 101,778 $ 41,784 $ 159,295 $ 302,857 $ 5,018,231 $ 5,321,088 $ 90,454 Other consumer

Other consumer $ 6,465 $ 1,276 $ 998 $ 8,739 $ 371,143 $ 379,882 $ 998

Purchased credit-

impaired 69 — — 69 60 129 — (2)

Total other consumer $ 6,534 $ 1,276 $ 998 $ 8,808 $ 371,203 $ 380,011 $ 998 Total loans and leases $ 250,650 $ 86,691 $ 352,134 $ 689,475 $ 42,431,025 $ 43,120,500 $ 164,194

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December 31, 2012 90 or more (dollar amounts in thousands) Past Due Total Loans days past due 30-59 days 60-89 days 90 or more days Total Current and Leases and accruing Commercial and

industrial:

Owner occupied $ 11,409 $ 6,302 $ 31,997 $ 49,708 $ 4,236,211 $ 4,285,919 $ —

Purchased credit-

impaired 986 3,533 26,648 31,167 23,305 54,472 26,648 (2) Other commercial

and industrial 20,273 4,211 14,786 39,270 12,591,028 12,630,298 —

Total commercial and

industrial $ 32,668 $ 14,046 $ 73,431 $ 120,145 $ 16,850,544 $ 16,970,689 $ 26,648 Commercial real estate:

Retail properties $ 3,459 $ 4,203 $ 9,677 $ 17,339 $ 1,413,520 $ 1,430,859 $ —

Multi family 7,961 1,314 12,062 21,337 963,063 984,400 — Office 1,054 2,415 23,335 26,804 909,310 936,114 — Industrial and

warehouse 6,597 118 5,433 12,148 584,754 596,902 — Purchased credit-

impaired 556 1,751 56,660 58,967 67,956 126,923 56,660 (2) Other commercial

real estate 2,725 2,192 25,463 30,380 1,293,662 1,324,042 —

Total commercial real

estate $ 22,352 $ 11,993 $ 132,630 $ 166,975 $ 5,232,265 $ 5,399,240 $ 56,660 Automobile $ 36,267 $ 7,803 $ 4,438 $ 48,508 $ 4,585,312 $ 4,633,820 $ 4,418 Home equity:

Secured by first-

lien $ 26,288 $ 9,992 $ 28,322 $ 64,602 $ 4,315,985 $ 4,380,587 $ 5,202 Secured by junior-

lien 34,365 16,553 35,150 86,068 3,868,687 3,954,755 12,998

Total home equity 60,653 $ 26,545 $ 63,472 $ 150,670 $ 8,184,672 $ 8,335,342 $ 18,200 Residential mortgage

Residential 118,582 $ 44,747 $ 164,035 $ 327,364 $ 4,640,065 $ 4,967,429 $ 92,925 (4)

mortgage Purchased credit-

impaired 58 — 609 667 1,576 2,243 609 (2)

Total residential

mortgage $ 118,640 $ 44,747 $ 164,644 $ 328,031 $ 4,641,641 $ 4,969,672 $ 93,534 Other consumer

Other consumer 7,431 $ 2,117 $ 1,672 $ 11,220 $ 408,302 $ 419,522 $ 1,672

Purchased credit-

impaired — 76 — 76 64 140 — (2)

Total other consumer $ 7,431 $ 2,193 $ 1,672 $ 11,296 $ 408,366 $ 419,662 $ 1,672 Total loans and leases $ 278,011 $ 107,327 $ 440,287 $ 825,625 $ 39,902,800 $ 40,728,425 $ 201,132

(1) NALs are included in this aging analysis based on the loan’s past due status. (2) All amounts represent accruing purchased credit-impaired loans related to the FDIC-assisted Fidelity Bank

acquisition. Under the applicable accounting guidance (ASC-310-30), the loans were recorded at fair value

upon acquisition and remain in accruing status. (3) Includes $87,985 thousand guaranteed by the U.S. government. (4) Includes $90,816 thousand guaranteed by the U.S. government.

Allowance for Credit Losses

The ACL is increased through recoveries and the provision for credit losses that is charged to earnings, based

on Management’s quarterly evaluation, and is reduced by NCOs and the ACL associated with securitized or sold

loans. There were no material changes in assumptions or estimation techniques compared with prior periods that

impacted the determination of the current period’s ALLL and AULC.

During a 2013 review of our consumer portfolios, we identified additional loans associated with borrowers

who had filed Chapter 7 bankruptcy and had not reaffirmed their debt, thus meeting the definition of collateral

dependent per OCC regulatory guidance. These loans were not identified in the 2012 third quarter implementation of

the OCC’s regulatory guidance. The bankruptcy court’s discharge of the borrower’s debt is considered a concession

when the discharged debt is not reaffirmed, and as such, the loan is placed on nonaccrual status, and written down to

collateral value, less anticipated selling costs. As a result of the review of our existing consumer portfolios,

additional NCOs of $22.8 million were recorded in 2013. The majority of the NCO impact was in the home equity

portfolio and relates to junior-lien loans that meet the regulatory guidance.

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The following table presents ALLL and AULC activity by portfolio segment for the years ended

December 31, 2013, 2012, and 2011:

(dollar amounts in thousands) Commercial

and Industrial Commercial

Real Estate Automobile Home

Equity Residential

Mortgage Other

Consumer Total

Year ended December 31,

2013:

ALLL balance,

beginning of period $ 241,051 $ 285,369 $ 34,979 $ 118,764 $ 61,658 $ 27,254 $ 769,075 Loan charge-offs (45,904 ) (69,512 ) (23,912 ) (98,184 ) (34,236 ) (34,568 ) (306,316 ) Recoveries of

loans

previously

charged-off 29,514 44,658 13,375 15,921 7,074 7,108 117,650 Provision for

loan and lease 41,140 (97,958 ) 6,611 74,630 5,417 37,957 67,797

losses Allowance for

loans sold or

transferred to

loans held for

sale — — — — (336 ) — (336 )

ALLL balance, end of

period $ 265,801 $ 162,557 $ 31,053 $ 111,131 $ 39,577 $ 37,751 $ 647,870

AULC balance,

beginning of period $ 33,868 $ 4,740 $ — $ 1,356 $ 3 $ 684 $ 40,651 Provision for

unfunded loan

commitments

and letters of

credit 15,728 5,151 — 407 6 956 22,248

AULC balance, end of

period $ 49,596 $ 9,891 $ — $ 1,763 $ 9 $ 1,640 $ 62,899

ACL balance, end of

period $ 315,397 $ 172,448 $ 31,053 $ 112,894 $ 39,586 $ 39,391 $ 710,769

(dollar amounts in thousands) Year ended December 31,

2012:

ALLL balance,

beginning of period $ 275,367 $ 388,706 $ 38,282 $ 143,873 $ 87,194 $ 31,406 $ 964,828 Loan charge-offs (101,475 ) (118,051 ) (26,070 ) (124,286 ) (52,228 ) (33,090 ) (455,200 ) Recoveries of

loans

previously

charged-off 37,227 39,622 16,628 7,907 4,305 7,049 112,738 Provision for loan

and lease

losses 29,932 (24,908 ) 12,964 91,270 24,046 21,889 155,193 Allowance for

loans sold or

transferred to

loans held for

sale — — (6,825 ) — (1,659 ) — (8,484 )

ALLL balance, end of

period $ 241,051 $ 285,369 $ 34,979 $ 118,764 $ 61,658 $ 27,254 $ 769,075

AULC balance,

beginning of period $ 39,658 $ 5,852 $ — $ 2,134 $ 1 $ 811 $ 48,456 Provision for

unfunded loan

commitments

and letters of

credit (5,790 ) (1,112 ) — (778 ) 2 (127 ) (7,805 )

AULC balance, end of

period $ 33,868 $ 4,740 $ — $ 1,356 $ 3 $ 684 $ 40,651

ACL balance, end of

period $ 274,919 $ 290,109 $ 34,979 $ 120,120 $ 61,661 $ 27,938 $ 809,726

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(dollar amounts in thousands) Year Ended December 31,

2011:

ALLL balance,

beginning of period $ 340,614 $ 588,251 $ 49,488 $ 150,630 $ 93,289 $ 26,736 $ 1,249,008 Loan charge-

offs (134,385 ) (182,759 ) (33,593 ) (109,427 ) (65,069 ) (32,520 ) (557,753 ) Recoveries of

loans

previously

charged-off 44,686 34,658 18,526 7,630 8,388 6,776 120,664 Provision for

loan and

lease losses 24,452 (51,444 ) 17,042 95,040 52,226 30,414 167,730 Allowance for

loans sold or

transferred to

loans held for

sale — — (13,181 ) — (1,640 ) — (14,821 )

ALLL balance, end of

period $ 275,367 $ 388,706 $ 38,282 $ 143,873 $ 87,194 $ 31,406 $ 964,828

AULC balance,

beginning of period $ 32,726 $ 6,158 $ — $ 2,348 $ 1 $ 894 $ 42,127 Provision for

unfunded

loan

commitments

and letters-of-

credit 6,932 (306 ) — (214 ) — (83 ) 6,329

AULC balance, end of

period 39,658 5,852 — 2,134 1 811 48,456

ACL balance, end of

period $ 315,025 $ 394,558 $ 38,282 $ 146,007 $ 87,195 $ 32,217 $ 1,013,284

Credit Quality Indicators

To facilitate the monitoring of credit quality for C&I and CRE loans, and for purposes of determining an

appropriate ACL level for these loans, Huntington utilizes the following categories of credit grades:

Pass - Higher quality loans that do not fit any of the other categories described below.

OLEM - The credit risk may be relatively minor yet represent a risk given certain specific

circumstances. If the potential weaknesses are not monitored or mitigated, the loan may weaken or the

collateral may be inadequate to protect Huntington’s position in the future. For these reasons,

Huntington considers the loans to be potential problem loans.

Substandard - Inadequately protected loans by the borrower’s ability to repay, equity, and/or the

collateral pledged to secure the loan. These loans have identified weaknesses that could hinder normal

repayment or collection of the debt. It is likely Huntington will sustain some loss if any identified

weaknesses are not mitigated.

Doubtful - Loans that have all of the weaknesses inherent in those loans classified as Substandard, with

the added elements of the full collection of the loan is improbable and that the possibility of loss is high.

The categories above, which are derived from standard regulatory rating definitions, are assigned upon initial

approval of the loan or lease and subsequently updated as appropriate.

Commercial loans categorized as OLEM, Substandard, or Doubtful are considered Criticized loans.

Commercial loans categorized as Substandard or Doubtful are also considered Classified loans.

For all classes within all consumer loan portfolios, each loan is assigned a specific PD factor that is partially

based on the borrower’s most recent credit bureau score (FICO), which we update quarterly. A FICO credit bureau

score is a credit score developed by Fair Isaac Corporation based on data provided by the credit bureaus. The FICO

credit bureau score is widely accepted as the standard measure of consumer credit risk used by lenders, regulators,

rating agencies, and consumers. The higher the FICO credit bureau score, the higher likelihood of repayment and

therefore, an indicator of higher credit quality.

Huntington assesses the risk in the loan portfolio by utilizing numerous risk characteristics. The classifications

described above, and also presented in the table below, represent one of those characteristics that are closely

monitored in the overall credit risk management processes. The table below also shows an increase in FICO scores

less than 650 for the automobile portfolio. This increase is proportional to growth in the portfolio and does not

reflect a deterioration in asset quality for the portfolio, as other risk characteristics mitigate any increased level of

risk associated with the FICO score distribution.

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The following table presents each loan and lease class by credit quality indicator for the years ended

December 31, 2013 and 2012: December 31, 2013 Credit Risk Profile by UCS classification (dollar amounts in thousands) Pass OLEM Substandard Doubtful Total Commercial and industrial:

Owner occupied $ 4,052,579 $ 130,645 $ 155,994 $ 8,654 $ 4,347,872 Purchased impaired 5,015 661 27,693 2,157 35,526 Other commercial and industrial 12,630,512 211,860 364,343 4,163 13,210,878

Total commercial and industrial $ 16,688,106 $ 343,166 $ 548,030 $ 14,974 $ 17,594,276 Commercial real estate:

Retail properties $ 1,153,747 $ 16,003 $ 93,819 $ — $ 1,263,569 Multi family 972,526 16,540 36,411 114 1,025,591 Office 847,411 4,866 87,722 2,294 942,293 Industrial and warehouse 431,057 14,138 27,698 — 472,893 Purchased impaired 13,127 3,586 62,577 2,783 82,073 Other commercial real estate 977,987 16,270 68,653 765 1,063,675

Total commercial real estate $ 4,395,855 $ 71,403 $ 376,880 $ 5,956 $ 4,850,094

Credit Risk Profile by FICO score (1) 750+ 650-749 <650 Other (2) Total Automobile $ 2,987,323 $ 2,517,756 $ 945,604 $ 188,030 $ 6,638,713 Home equity:

Secured by first-lien $ 3,018,784 $ 1,412,445 $ 299,681 $ 111,234 $ 4,842,144 Secured by junior-lien 1,811,102 1,213,024 413,695 56,353 3,494,174

Total home equity $ 4,829,886 $ 2,625,469 $ 713,376 $ 167,587 $ 8,336,318 Residential mortgage:

Residential mortgage $ 2,837,590 $ 1,710,183 $ 699,541 $ 71,276 $ 5,318,590 Purchased impaired 588 989 921 — 2,498

Total residential mortgage $ 2,838,178 $ 1,711,172 $ 700,462 $ 71,276 $ 5,321,088 Other consumer

Other consumer $ 161,858 $ 157,675 $ 45,370 $ 14,979 $ 379,882 Purchased impaired — 60 69 — 129

Total other consumer loans $ 161,858 $ 157,735 $ 45,439 $ 14,979 $ 380,011

December 31, 2012 Credit Risk Profile by UCS classification (dollar amounts in thousands) Pass OLEM Substandard Doubtful Total Commercial and industrial:

Owner occupied $ 3,970,597 $ 108,731 $ 205,822 $ 769 $ 4,285,919 Purchased impaired 1,663 6,555 46,254 — 54,472 Other commercial and industrial 12,146,017 145,111 337,805 1,365 12,630,298

Total commercial and industrial $ 16,118,277 $ 260,397 $ 589,881 $ 2,134 $ 16,970,689 Commercial real estate:

Retail properties $ 1,184,987 $ 63,976 $ 181,896 $ — $ 1,430,859 Multi family 902,616 24,098 57,548 138 984,400 Office 826,533 26,488 83,093 — 936,114 Industrial and warehouse 540,484 15,132 41,286 — 596,902 Purchased impaired 10,052 18,085 98,786 — 126,923 Other commercial real estate 1,177,213 43,454 103,262 113 1,324,042

Total commercial real estate $ 4,641,885 $ 191,233 $ 565,871 $ 251 $ 5,399,240

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Credit Risk Profile by FICO score (1) 750+ 650-749 <650 Other (2) Total Automobile $ 2,233,439 $ 1,900,824 $ 682,518 $ 117,039 $ 4,933,820 (3) Home equity:

Secured by first-lien 2,618,888 1,345,621 357,019 59,059 4,380,587 Secured by junior-lien 2,046,143 1,375,636 491,226 41,750 3,954,755

Total home equity $ 4,665,031 $ 2,721,257 $ 848,245 $ 100,809 $ 8,335,342 Residential mortgage:

Residential mortgage 2,561,210 1,673,485 711,750 20,984 4,967,429 Purchased impaired 373 1,303 567 — 2,243

Total residential mortgage 2,561,583 $ 1,674,788 $ 712,317 $ 20,984 $ 4,969,672 Other consumer

Other consumer 169,792 167,389 59,815 22,526 419,522 Purchased impaired — 93 47 — 140

Total other consumer loans 169,792 $ 167,482 $ 59,862 $ 22,526 $ 419,662

(1) Reflects currently updated customer credit scores. (2) Reflects deferred fees and costs, loans in process, loans to legal entities, etc. (3) Includes $0.3 billion of loans reflected as loans held for sale.

Impaired Loans

A loan is considered to be impaired when, based on current information and events, it is probable that not all

amounts due according to the contractual terms of the loan agreement will be collected. The following tables present