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Huntington Bancshares Incorporated Reports Record Net Income of $641.0 Million, or $0.71 Per Common Share, for 2012, up 18% from

  Huntington Bancshares Incorporated Reports Record Net Income of $641.0
  Million, or $0.71 Per Common Share, for 2012, up 18% from the Prior Year

        Declares Quarterly Dividend on Common Stock of $0.04 Per Share

                Other specific highlights compared with 2011:

  *1.15% return on average assets, up from 1.01%
  *$0.60, or 12%, increase in tangible book value per common share to $5.78
  *23.3 million shares, or 2.7% of average outstandings, repurchased at an
    average price of $6.36 per share
  *$0.16 dividend paid per common share, a 2.5% dividend yield as of December
    31, 2012
  *$204.1 million, or 8%, increase in fully-taxable equivalent revenue
  *$86.8 million, or 5%, increase in net interest income, reflecting:

       *3.41% fully-taxable equivalent net interest margin, up 3 basis points
       *3% growth in average total loans
       *8% growth in average core deposits

  *$117.2 million, or 12%, increase in noninterest income
  *$107.4 million, or 6%, increase in noninterest expense
  *Delivered positive operating leverage and a modest improvement in
    efficiency ratio
  *25% decline in nonaccrual loans to 1.00% of total loans and leases, down
    from 1.39%

  2012 Fourth Quarter specific highlights compared with 2012 Third Quarter:

  *Net income and earnings per share essentially unchanged at $167.3 million
    and $0.19, respectively
  *1.19% return on average assets, unchanged from the prior quarter
  *$40.6 million, or 6%, increase in fully-taxable equivalent revenue,
    reflecting:

       *3.45% fully-taxable equivalent net interest margin, up 7 basis points
       *3% annualized growth in average total loans
       *$17.1 million increase in mortgage banking income
       *$14.1 million increase in gain on sale of loans

  *$12.3 million, or 3%, increase in noninterest expense
  *13.2 million shares repurchased at an average price of $6.33 per share

Business Wire

COLUMBUS, Ohio -- January 17, 2013

Huntington Bancshares Incorporated (NASDAQ: HBAN; www.huntington.com) reported
2012 full-year net income of $641.0 million, an increase of $98.4 million, or
18%, from the prior year. 2012 fourth quarter net income of $167.3 million was
essentially unchanged from the prior quarter. Earnings per common share for
the year and current quarter were $0.71 and $0.19, respectively, up $0.12 and
unchanged from the prior periods.

Huntington today also announced that the Board of Directors declared a
quarterly cash dividend on its common stock of $0.04 per common share. The
dividend is payable April 1, 2013, to shareholders of record on March 18,
2013.

Summary Performance Discussion

“We are pleased with the year’s financial results, which reflect steady growth
in a number of key areas including loans, deposits, and customer relationships
as well as improved profitability. This growth has occurred in a challenging
economic and regulatory environment. It demonstrates the continued benefits
from successfully executing our long-term strategic plan, including the
investments we have made during the previous three years. Those investments
added over $50 million of pre-tax income during 2012 and we expect that
benefit to grow as those investments continue to mature,” said Stephen D.
Steinour, chairman, president and chief executive officer. “While some
businesses are hesitant to invest in light of the current uncertainty in the
economy, we believe our differentiated approach to banking, coupled with
investing in our franchise through enhanced products and services, will drive
growth and improvement of our long-term profitability.”

Net income for the full year was $641.0 million, up $98.4 million, or 18%,
from the prior year. The primary drivers of the increase were a $117.2
million, or 12%, increase in noninterest income and an $81.4 million, or 5%,
increase in net interest income, partially offset by a $107.4 million, or 6%,
increase in noninterest expense.

Net income in the 2012 fourth quarter was essentially unchanged from the prior
quarter as a $40.6 million, or 6%, increase in revenue was offset by a $12.3
million, or 3%, increase in noninterest expense and $26.1 million, or 92%,
increase in the provision for income taxes.

Net interest income increased $86.8 million, or 5%, from the prior year. This
reflected a $2.1 billion, or 4%, increase in average earning assets and a 3
basis point increase in the net interest margin (NIM) to 3.41%. The increase
in the NIM reflected the positive impact of a 29 basis point decline in total
deposit costs that were partially offset by a 24 basis point decline in the
yield on earnings assets and a 2 basis point decrease related to non-deposit
funding and other items. Average noninterest bearing deposits increased $3.5
billion, or 41%, and represented 27% of total deposits.

The $2.1 billion, or 4%, increase in average earning assets was driven by the
$1.9 billion, or 10%, increase in average total commercial loans and $0.8
billion, or 277%, increase in average loans held for sale. Those were
partially offset by a $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.

For the year, average total core deposits increased $3.1 billion, or 8%,
reflecting a $3.8 billion, or 27%, increase in total demand deposits and a
$0.6 billion, or 4%, increase in money market deposits. These were partially
offset by the $1.5 billion, or 19%, decrease in core certificates of deposit.
Through our strategic focus on growing consumer households and commercial
relationships by earning their primary checking (demand deposit) accounts, we
continue to improve our overall funding mix. As previously disclosed, there
are deposits from several large relationships that are considered nonpermanent
in nature. In the 2012 fourth quarter, these deposits were reduced by
approximately $0.4 billion and less than $1 billion remains.

In the 2012 fourth quarter, net interest income increased $4.0 million, or
less than 1%, reflecting a 7 basis point increase in NIM, primarily offset by
a $0.6 billion decrease in average earnings assets. The average earning asset
decline primarily reflected the $1.0 billion reduction in loans held for sale,
which was partially offset by $0.4 billion of automobile loan growth. While
average commercial and industrial (C&I) loans did grow by slightly less than
$0.2 billion, growth continued to be moderated by the current economic pause
and the continued decline of C&I line utilization rates, which decreased
another 1.4% over the quarter and down over 3% from the year-ago quarter. Of
the 7 basis point increase in NIM, 5 basis points were temporary benefits with
the vast majority related to an increase in the purchase accounting accretion
on the Fidelity Bank acquired loan portfolio.

Noninterest income increased $117.2 million, or 12%, from the prior year. This
included a $107.7 million, or 129%, increase in mortgage banking income, a
$26.2 million, or 82%, increase in gain on sale of loans, an $18.7 million, or
8%, increase in service charges on deposit accounts, and an $11.6 million, or
32%, increase in capital market fees. These positive impacts were partially
offset by a $29.4 million, or 26%, decrease in electronic banking income,
which was negatively impacted by over $55 million from the Durbin amendment,
and a $16.0 million, or 11%, decrease in other income reflecting a $16.5
million, or 62%, decrease in automobile operating lease income.

In the 2012 fourth quarter, noninterest income increased $36.6 million, or
14%, from the prior quarter, reflecting a $17.1 million, or 38%, increase in
mortgage banking income, which included a $10.0 million net MSR hedging
related benefit, a $14.1 million increase in gain on sale of loans related to
the October automobile loan securitization, and a $7.0 million increase in
other income primarily due to an increase in loan and lease related fees.
These benefits were partially offset by a $3.3 million reduction in securities
gains.

“This year’s results clearly showed the continued benefit of our investments
and our differentiated strategy,” added Steinour. “These investments, coupled
with adding over 133,000 consumer households, a 12% increase, and 12,700
commercial relationships, a 9% increase, has allowed Huntington to grow
revenue and pretax income by more than $200 million and $117 million,
respectively.”

Noninterest expense increased $107.4 million, or 6%, from the prior year. This
included a $95.7 million, or 11%, increase in personnel costs primarily
reflecting an increase in the number of full-time equivalent employees as well
as higher incentive based compensation and a $10.4 million, or 11%, increase
in equipment primarily reflecting the implementation of strategic initiatives
including opening 37, or 6%, net new branches. These increases were offset
partially by a $9.3 million, or 12%, decrease in deposit and other insurance
expense.

The full year 2012 included $14 million of noninterest expense related to the
Fidelity acquisition, which closed on March 30, 2012.

In the 2012 fourth quarter, noninterest expense increased $12.3 million, or
3%, from the prior quarter reflecting a $6.2 million increase in personnel,
which included an increase in the number of full-time equivalent employees as
well as higher incentive-based compensation, and a $5.0 million increase in
professional services including temporary regulatory related expenses.

The provision for credit losses decreased $26.7 million, or 15%, from the
prior year. This reflected a $94.6 million, or 22%, decrease in net
charge-offs (NCOs) to $342.5 million, or 0.85% of average total loans and
leases, from $437.1 million, or 1.12% of average total loans and leases, in
the prior year. Of this year’s NCOs, $34.6 million related to regulatory
guidance requiring consumer loans discharged under Chapter 7 bankruptcy to be
charged down to collateral value. Approximately 90% continue to make payments
as scheduled. Criticized commercial loans declined by $537 million, or 25%,
resulting in lower reserves.

Reflecting the overall improvement in credit quality, the period-end allowance
for credit losses (ACL) as a percentage of total loans and leases decreased to
1.99% from 2.60% in the prior year. The ACL as a percentage of period-end
total nonaccrual loans (NALs) increased 12 percentage points to 199% as NALs
declined by $133.5 million, or 25%, to $407.6 million, or 1.00% of total
loans.

Tier 1 common risk-based capital ratio at December 31, 2012, was 10.47%, up
from 10.00% at December 31, 2011, and our tangible common equity ratio
increased to 8.76% from 8.30% over this same period. The regulatory Tier 1
risk-based capital ratio at December 31, 2012, was 12.01%, down from 12.11%,
at December 31, 2011. This decline reflected capital actions taken throughout
the year, which are discussed below.

Over the year and consistent with planned capital actions, we redeemed $230
million of trust preferred securities (TruPS) and repurchased 23.3 million
common shares at an average price of $6.36 per share. These actions included
the redemption of $36 million of TruPS and the repurchase of 13.2 million
common shares in the fourth quarter. Commenting on capital, Steinour said,
“Reinvesting excess capital to grow the business organically remains our first
priority. Importantly, through dividends and share repurchases, we have the
flexibility, subject to market conditions and regulatory approval, to return a
meaningful amount of our earnings to the owners of the company. We continue to
evaluate other capital actions. As we have shown over the last several years,
we will maintain a high level of discipline when considering M&A.”

2013 Expectations

“We expect to continue seeing the strong growth of the Midwest economy
relative to the broader United States. However, business sentiment continues
to be negatively influenced by the uncertainty in Washington and its direct
impact on the U.S. economy. We remain optimistic that when solutions are in
place, the strength of the Midwest and the soundness of our strategy will
continue to drive growth,” said Steinour.

Net interest income is expected to modestly grow over the course of 2013,
after experiencing its usual first quarter seasonal decline, as we anticipate
an increase in total loans, excluding the impact of any future loan
securitizations. However, those benefits to net interest income are expected
to be mostly offset by downward NIM pressure. NIM is not expected to fall
below the mid 3.30%’s due to continued deposit repricing and mix shift
opportunities while maintaining a disciplined approach to loan pricing.

The C&I portfolio is expected to continue to see growth in 2013, although we
expect growth will be more heavily weighted to the back half of the year when
we expect economic uncertainty driven by Washington to be resolved. Our C&I
sales pipeline remains robust with much of this reflecting the positive impact
from our strategic initiatives, focused OCR sales process, and continued
support of middle market and small business lending in the Midwest. While
on-balance sheet exposure is expected to increase, we will continue to
evaluate the use of automobile loan securitizations due to our expectation of
continued strong levels of originations and anticipate two securitizations in
2013. Residential mortgages and home equity loan balances are expected to
increase modestly. CRE loans likely will experience declines from current
levels but are expected to remain in the $5.0 to $5.5 billion range.

Excluding potential future automobile loan securitizations, 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, the continued shift
towards low- and no-cost demand deposits and money market deposit accounts,
and the previously discussed reduction in balances from several larger
relationships.

Noninterest income over the course of the year, excluding the impact of any
automobile loan sales, any net MSR impact, and typical first quarter
seasonality, is expected to be relatively stable at current levels. The
anticipated slowdown in mortgage banking activity is expected to be offset by
continued growth in new customers, increased contribution from higher
cross-sell, and the continued maturation of our previous strategic
investments.

Noninterest expense continued to run at levels above our long-term
expectations relative to revenue. In response to changes in our economic
outlook, we have moderated the pace and size of our planned investments in
order to drive positive operating leverage in 2013.

Credit quality is expected to experience improvement, and NCOs should approach
normalized levels by the end of 2013. The level of provision for credit losses
in 2012 was at the low end of our long-term expectation, and we expect some
quarterly volatility within each of the loan categories given the absolute low
level of the provision for credit losses and the uncertain and uneven nature
of the economic recovery.

We anticipate an effective tax rate for 2013 to approximate 35% of income
before income taxes less approximately $75 to $90 million of permanent
differences primarily related to tax-exempt income, tax advantaged
investments, and general business credits.

Please see the 2012 Fourth Quarter Performance Discussion for an additional
detailed review of this quarter’s performance. This document can be found at:
http://www.investquest.com/iq/h/hban/ne/news/index.htm

Conference Call / Webcast Information

Huntington’s senior management will host an earnings conference call on
Thursday, January 17, 2013, at 10:00 a.m. (Eastern Time). The call may be
accessed via a live Internet webcast at www.huntington-ir.com or through a
dial-in telephone number at (877) 684-3807; Conference ID 80675132. Slides
will be available at www.huntington-ir.com about an hour prior to the call. A
replay of the webcast will be archived in the Investor Relations section of
Huntington’s web site, www.huntington.com. A telephone replay will be
available two hours after the completion of the call through January 31, 2013
at (855) 859-2056; Conference ID 80675132.

Forward-looking Statement

This document contains certain forward-looking statements, including certain
plans, expectations, goals, projections, and statements, which are subject to
numerous assumptions, risks, and uncertainties. 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.

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 economic conditions, including impacts from the
implementation of the Budget Control Act of 2011 and the American Taxpayer
Relief Act of 2012 as well as the continuing economic uncertainty in the US,
the European Union, and other areas; (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, and regulations
including those related to the Dodd-Frank Wall Street Reform and Consumer
Protection Act; 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.
Additional factors that could cause results to differ materially from those
described above can be found in Huntington’s 2011 Annual Report on Form 10-K,
and documents subsequently filed by Huntington with the Securities and
Exchange Commission. All forward-looking statements included in this document
are based on information available at the time of the release. Huntington
assumes no obligation to update any forward-looking statement.

Basis of Presentation

Use of Non-GAAP Financial Measures

This document may contain GAAP financial measures and non-GAAP financial
measures where management believes it to be helpful in understanding
Huntington’s results of operations or financial position. Where non-GAAP
financial measures are used, the comparable GAAP financial measure, as well as
the reconciliation to the comparable GAAP financial measure, can be found in
this document, the 2012 Fourth Quarter Performance Discussion and Quarterly
Financial Review supplements to this document, the fourth quarter earnings
conference call slides, or the Form 8-K related to this document, all of which
can be found on Huntington’s website at www.huntington-ir.com.

Annualized data

Certain returns, yields, performance ratios, or quarterly growth rates are
presented on an “annualized” basis. This is done for analytical and
decision-making purposes to better discern underlying performance trends when
compared to full year or year-over-year amounts. For example, loan and deposit
growth rates, as well as net charge-off percentages, are most often expressed
in terms of an annual rate like 8%. As such, a 2% growth rate for a quarter
would represent an annualized 8% growth rate.

Fully-taxable equivalent revenue, interest income, and net interest margin

Income from tax-exempt earning assets is increased by an amount equivalent to
the taxes that would have been paid if this income had been taxable at
statutory rates. This adjustment puts all earning assets, most notably
tax-exempt municipal securities and certain lease assets, on a common basis
that facilitates comparison of results to results of competitors. Within this
document, revenue, interest income, and net interest margin data is presented
as fully-taxable equivalent unless otherwise noted.

Earnings per share equivalent data

Significant income or expense items may be expressed on a per common share
basis. This is done for analytical and decision-making purposes to better
discern underlying trends in total corporate earnings per share performance
excluding the impact of such items. Investors may also find this information
helpful in their evaluation of the company’s financial performance against
published earnings per share mean estimate amounts, which typically exclude
the impact of Significant Items. Earnings per share equivalents are usually
calculated by applying a 35% effective tax rate to a pre-tax amount to derive
an after-tax amount, which is divided by the average shares outstanding during
the respective reporting period. Occasionally, when the item involves special
tax treatment, the after-tax amount is disclosed separately, with this then
being the amount used to calculate the earnings per share equivalent.

Rounding

Please note that columns of data in this document may not add due to rounding.

About Huntington

Huntington Bancshares Incorporated is a $56 billion regional bank holding
company headquartered in Columbus, Ohio. The Huntington National Bank, founded
in 1866, provides full-service commercial, small business, and consumer
banking services; mortgage banking services; treasury management and foreign
exchange services; equipment leasing; wealth and investment management
services; trust services; brokerage services; customized insurance brokerage
and service programs; and other financial products and services. The principal
markets for these services are Huntington’s six-state banking franchise: Ohio,
Michigan, Pennsylvania, Indiana, West Virginia, and Kentucky. The primary
distribution channels include a banking network of more than 700 traditional
branches and convenience branches located in grocery stores and retirement
centers, and through an array of alternative distribution channels including
internet and mobile banking, telephone banking, and more than 1,300 ATMs.
Through automotive dealership relationships within its six-state banking
franchise area and selected other Midwest and New England states, Huntington
also provides commercial banking services to the automotive dealers and retail
automobile financing for dealer customers.

Contact:

Huntington Bancshares Incorporated
Investors
Todd Beekman, 614-480-3878
Todd.Beekman@Huntington.com
or
Mark Muth, 614-480-4720
Mark.Muth@Huntington.com
or
Media
Maureen Brown, 614-480-5512
Maureen.Brown@Huntington.com
 
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