Huntington Bancshares Incorporated Announces 2008 Second Quarter Net Charge-Off and...

Huntington Bancshares Incorporated Announces 2008 Second Quarter Net
Charge-Off and Loan Loss Provision Expectations and Confirms Franklin Credit
Management Corporation Relationship Continues to Perform to Expectations

COLUMBUS, Ohio, June 19 /PRNewswire-FirstCall/ -- Huntington Bancshares
Incorporated (Nasdaq: HBAN) announced that it expects to report 2008 second
quarter net charge-offs of an annualized 0.60%-0.65% of average total loans
and leases. Also, Huntington's 2008 full-year outlook for net charge-offs
would be near the high end of the previously targeted range of 0.60%-0.65% of
average total loans and leases.
Huntington also noted that it expects the 2008 second quarter provision
for credit losses to exceed net charge-offs by approximately $55-$65 million,
compared to $40.2 million in the first quarter, reflecting continued economic
weakness in many of its markets. The outlook for the second half of 2008 is
for the allowance for loan and lease losses to increase at a slower pace than
in the first half of 2008.
In addition, Huntington announced that the Franklin Credit Management
Corporation (Franklin) relationship continues to perform consistent with
expectations and that through May, second quarter cash flows were slightly
higher than those in the comparable 2008 first quarter period. Huntington
also expects to remove the tranche A portion of the Franklin loans from
non-performing asset status in the second quarter. The tranche A loans were
$786 million as of March 31, 2008.
During the second quarter, Huntington issued $569 million of convertible
preferred stock to bolster capital levels during this period of increased
economic uncertainty. As indicated at the time this capital issuance was
announced, the additional capital was not raised as a result of any known
major credit challenges, and this remains the case. Huntington'sJune 30,
2008 Tier 1 capital ratio is expected to be at least 8.80%, significantly
higher than 7.56% at the end of the first quarter. In addition, and
reflecting expected earnings and the benefit of the previously announced
common stock dividend reduction, Huntington expects this ratio to increase
15-20 basis points each quarter throughout 2008.
"Over the last several weeks, there has been market speculation that a
significant deterioration in our credit quality performance was about to
happen," said Thomas E. Hoaglin, chairman, president, and chief executive
officer. "As a result, our stock price has declined materially. The purpose
of our announcement today is to reassure our shareholders that while credit
quality remains under pressure given the continued economic weakness in our
markets, our full year 2008 net charge-off outlook has remained fairly
consistent, and we are pleased with the performance of the Franklin
relationship. Investor skepticism is not surprising, especially given recent
announcements by other banks in our markets."
"Beginning in 2001, we took steps to reduce our credit risk profile," he
continued. "For example, we reduced our exposure to shared national credits
and other outsized commercial loan relationships. When we expanded our
residential mortgage lending in late 2001, we did so with high underwriting
standards. We did not originate sub-prime mortgage loans, option ARMS, or
negative amortizing loans. We underwrote according to a borrower's ability to
pay. In 2005, we became concerned with some of the risks identified in home
equity lending and began our exit from the broker channel. As a result, less
than 10% of our home equity loans today are from the broker channel
environment, and those are mostly pre-2005 originations. This is in contrast
with announcements from other banks where they have noted significant home
equity loan deterioration in their broker-channel originated products,
especially those originated since 2005. We have also tightened loan to value
limits and raised FICO and custom score standards as warranted by the
environment. We expect 2008 full- year home equity net charge-offs to be
higher than historical levels, but to remain at a very manageable level."
"Our auto loan originations over the last several years have been to very
high FICO scored borrowers, and the portfolio has continued to perform within
our expectations. We have witnessed a decline in used car prices, especially
for trucks and SUV's, and have factored this into our loss estimates. Our
underwriting, pricing, and market knowledge continue to serve our investors
well. Perhaps the most important credit strategy has been that we have
remained committed to our core markets and core customers, both of which we
understand well, and have taken into consideration in our credit underwriting
decisions and process."
"We are fully aware that the economic environment remains difficult and
could continue to get even more so. Nevertheless, we believe it important
that our investors know that we firmly believe the actions we have taken over
the last several years will result in better relative credit quality
performance throughout this cycle," he concluded.
About Huntington
Huntington Bancshares Incorporated is a $56 billion regional bank holding
company headquartered in Columbus, Ohio. Huntington has more than 142 years of
serving the financial needs of its customers. Huntington's banking subsidiary,
The Huntington National Bank, provides innovative retail and commercial
financial products and services through over 600 regional banking offices in
Indiana, Kentucky, Michigan, Ohio, Pennsylvania, and West Virginia. Huntington
also offers retail and commercial financial services online at huntington.com;
through its technologically advanced, 24-hour telephone bank; and through its
network of almost 1,400 ATMs. Selected financial service activities are also
conducted in other states including: Dealer Sales offices in Arizona, Florida,
Nevada, New Jersey, New York, Tennessee, and Texas; Private Financial and
Capital Markets Group offices in Florida; and Mortgage Banking offices in
Maryland and New Jersey. Huntington Insurance offers retail and commercial
insurance agency services in Ohio, Pennsylvania, Michigan, Indiana, and West
Virginia. International banking services are made available through the
headquarters office in Columbus, a limited purpose office located in the
Cayman Islands, and another located in Hong Kong.
SOURCE Huntington Bancshares Incorporated

Investors: Jay Gould, +1-614-480-4060, or Jack Pargeon, +1-614-480-3878, or
Media; Jeri Grier, +1-614-480-5413, all of Huntington Bancshares Incorporated