News Column

HUNTINGTON BANCSHARES INC/MD - 10-K - : Management's Discussion and Analysis of Financial Condition and Results of Operations

February 14, 2014

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. 24



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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. 25



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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 Percent 2012 Amount Percent 2011 Interest income $ 1,860,637$ (69,626 ) (4 )% $ 1,930,263$ (39,963 ) (2 )% $ 1,970,226 Interest expense 156,029 (63,710 ) (29 ) 219,739 (121,317 ) (36 ) 341,056 Net interest income 1,704,608 (5,916 ) - 1,710,524 81,354 5 1,629,170 Provision for credit losses 90,045 (57,343 ) (39 ) 147,388 (26,671 )



(15 ) 174,059

Net interest income after provision for credit losses 1,614,563

51,427 3 1,563,136 108,025



7 1,455,111

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 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 N.R (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 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 (23,757 ) (3 )% 857,962 (5,729 ) (1 )% 863,691 Average common shares-diluted(2) 843,974 (19,428 ) (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 $ 1,704,608$ (5,916 ) - % $ 1,710,524$ 81,354 5 % $ 1,629,170 FTE adjustment 27,340 6,934 34 20,406 5,490 37 14,916 Net interest income(3) 1,731,948 1,018 - 1,730,930 86,844 5 1,644,086 Noninterest income 997,995 (99,862 ) (9 ) 1,097,857 117,234 12 980,623 Total revenue(3) $ 2,729,943$ (98,844 ) (3 )% $ 2,828,787$ 204,078



8 % $ 2,624,709

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. 27



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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. Visaฎ. Prior to the Visaฎ IPO occurring in March 2008, Visaฎ was owned by

its member banks, which included the Bank. As a result of this ownership,

we received Class B shares of Visaฎ stock at the time of the Visaฎ IPO. In

2009, we sold these Visaฎ 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. 28



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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 ) Visaฎ-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



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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 Increase (Decrease) From Previous Year Due To Previous Year Due To Fully-taxable equivalent basis(2) Yield/ Yield/ (dollar amounts in millions) Volume Rate Total Volume 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



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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



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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



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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



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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



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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. 35



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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. 36



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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.

37



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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. 38



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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. 39



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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 40



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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. 41



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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. 42



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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 Residential Home Equity 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. 43



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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 More than (dollar amounts in millions) 1 Year or Less 1 to 2 years 2 to 3 years 3 to 4 years 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. 44



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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. 45



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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. 46



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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. 47



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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 49



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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 $ 265,801 41



% $ 241,051 42 % $ 275,367 38 % $ 340,614

34 % $ 492,205 35 % Commercial real estate 162,557 11



285,369 14 388,706 14 588,251

18 751,875 21

Total commercial 428,358 52 526,420 56 664,073 52 928,865 52 1,244,080 56 Consumer: Automobile 31,053 15 34,979 11 38,282 11 49,488 15 57,951 9 Home equity 111,131 19 118,764 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 219,512 48



242,655 44 300,755 48 320,143

48 238,399 44

Total allowance for loan and lease losses 647,870 100



% 769,075 100 % 964,828 100 % 1,249,008

100 % 1,482,479 100 %

Allowance for unfunded loan commitments 62,899 40,651 48,456 42,127 48,879 Total allowance for credit losses $ 710,769$ 809,726$ 1,013,284$ 1,291,135



$ 1,531,358

Total allowance for loan and leases losses as % of: Total loans and leases

1.50 % 1.89 % 2.48 % 3.28 % 4.03 % 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 1.65 % 1.99 % 2.60 % 3.39 % 4.16 % 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. 50



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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. 51



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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. 52



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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. 53



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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. 54



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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 Held-to-Maturity Securities Securities Amortized Fair Amortized Fair (dollar amounts in thousands) Cost Value Cost 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 55



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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 3 Months 3 Months 6 Months 12 Months (dollar amounts in millions) or Less to 6 Months to 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 56



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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. 57



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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 Percent One Year One to After of (dollar amounts in millions) or Less Five Years Five Years Total 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. 58



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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 One Year 1 to 3 3 to 5 More than (dollar amounts in millions) or Less Years Years 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 60

-------------------------------------------------------------------------------- Table of Contents (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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Table of Contents (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. 62



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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. 63



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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. 64



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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 Graceฎon 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. 65



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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. 66



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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. 67



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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. 68



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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. 69



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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. 70



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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. 71



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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. 72



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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. 73



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• $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. 74



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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. 75



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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. 76



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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. 77



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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. 78



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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 79



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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 80



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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 81



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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. 82



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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. 83



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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. 84



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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. 85



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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.) 86



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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. 87



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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.


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