COLUMBUS, Ohio, April 19, 2017 /PRNewswire/ -- Huntington Bancshares Incorporated (NASDAQ: HBAN; www.huntington.com) reported net income for the 2017 first quarter of $208 million, a $37 million, or 21%, increase from the year-ago quarter. Earnings per common share for the 2017 first quarter were $0.17, down $0.03, or 15%, from the year-ago quarter. Excluding approximately $71 million pretax, or $0.04 per common share after tax, of FirstMerit acquisition-related net expenses, adjusted earnings per common share were $0.21. Tangible book value per share as of 2017 first quarter-end was $6.55, an 8% year-over-year decrease but a 2% increase from 2016 year-end. Return on average assets was 0.84%, return on average common equity was 8.2%, and return on average tangible common equity was 11.3%. Total revenue increased 40% over the year-ago quarter.

"We had a good start to the year and are encouraged by the momentum we're currently seeing," said Steve Steinour, chairman, president and CEO. "Among our many accomplishments in the first quarter, we successfully completed our data and systems conversion. We are particularly pleased with our ability to retain customer deposits."

"We delivered solid performance in the first quarter and continue to manage the business for the long-term. Our strategy has driven consistent organic growth over the past several years," Steinour said. "We are seeing improving pipelines across our business lines as we leverage our expanded capabilities and markets to reach more customers and prospects than ever before."

Specific 2017 First Quarter Highlights:


    --  Completion of FirstMerit branch conversion and the conversion of the
        majority of FirstMerit systems
    --  Consolidation of 110 branches (10% of prior quarter-end total branches),
        including 101 branches related to the FirstMerit conversion
    --  $300 million, or 40%, year-over-year increase in fully-taxable
        equivalent revenue, comprised of a $230 million, or 45%, increase in
        fully-taxable equivalent net interest income and a $71 million, or 29%,
        increase in noninterest income
    --  Net interest margin of 3.30%, an increase of 19 basis points from the
        year-ago quarter
    --  $216 million, or 44%, year-over-year increase in noninterest expense,
        including a net increase of $67 million of FirstMerit
        acquisition-related expense
    --  $16.4 billion, or 32%, year-over-year increase in average loans and
        leases, comprised of a $9.4 billion, or 36%, increase in commercial
        loans and a $6.9 billion, or 28%, increase in consumer loans
    --  $8.6 billion, or 57%, year-over-year increase in average securities,
        including a net increase of $0.7 billion of direct purchase municipal
        instruments in our Commercial Banking segment
    --  $20.1 billion, or 39%, year-over-year increase in average core deposits,
        driven by a $9.0 billion, or 116%, increase in interest-bearing demand
        deposits, a $6.7 billion, or 126%, increase in savings and other
        domestic deposits, and a $5.4 billion, or 33%, increase in
        noninterest-bearing demand deposits
    --  Net charge-offs equated to 0.24% of average loans and leases,
        representing the twelfth consecutive quarter below the long-term target
        range of 0.35% to 0.55%
    --  Nonperforming asset ratio of 0.68%, down from 0.72% a quarter ago and
        1.02% a year ago
    --  $0.57, or 8%, year-over-year decrease in tangible book value per common
        share (TBVPS) to $6.55

Table 1 - Earnings Performance Summary



                                 2017                                                              2016
                                 ----

    ($ in millions,
     except per
     share data)              First           Fourth             Third           Second     First
    ---------------

                    Quarter                    Quarter           Quarter          Quarter   Quarter
                    -------                    -------           -------          -------   -------

    Net Income                           $208                               $239                           $127               $175    $171

    Diluted
     earnings per
     common share                0.17                       0.20                       0.11                 0.19      0.20


    Return on
     average assets             0.84%                     0.95%                     0.58%               0.96%    0.96%

    Return on
     average common
     equity                       8.2                        9.4                        5.4                  9.6      10.4

    Return on
     average
     tangible
     common equity               11.3                       12.9                        7.0                 11.0      11.9

    Net interest
     margin                      3.30                       3.25                       3.18                 3.06      3.11

    Efficiency
     ratio                       65.7                       61.6                       75.0                 66.1      64.6


    Tangible book
     value per
     common share                       $6.55                              $6.43                          $6.48              $7.29   $7.12

    Cash dividends
     declared per
     common share                0.08                       0.08                       0.07                 0.07      0.07

    Average diluted
     shares
     outstanding
     (000's)                1,108,617                  1,104,358                    952,081              810,371   808,349


    Average earning
     assets                           $91,139                            $91,463                        $79,687            $67,863 $66,234

    Average loans
     and leases (1)            66,981                     66,405                     60,722               51,932    50,618

    Average core
     deposits                  71,500                     72,070                     62,022               51,895    51,363


    Tangible common
     equity /
     tangible
     assets ratio               7.28%                     7.16%                     7.14%               7.96%    7.89%

    Common equity
     Tier 1 risk-
     based capital
     ratio                       9.67                       9.56                       9.09                 9.80      9.73


    NCOs as a % of
     average loans
     and leases                 0.24%                     0.26%                     0.26%               0.13%    0.07%

    NAL ratio                    0.60                       0.63                       0.61                 0.88      0.97

    ACL as a % of
     total loans
     and leases                  1.14                       1.10                       1.06                 1.33      1.34


    (1)       Excludes loans
     held for sale

Table 2 lists certain items that we believe are significant in understanding corporate performance and trends (see Basis of Presentation). There was one Significant Item in the 2017 first quarter: $71 million of FirstMerit acquisition-related net expense.

Table 2 - Significant Items Influencing Earnings



    Three Months Ended                            Pre-Tax                 After-Tax Impact
                                                  Impact

    ($ in millions, except per
     share)                                       Amount         Amount (1)                EPS (2)
    --------------------------                    ------         ---------                 ------

    March 31, 2017 - net income                                                    $208                $0.17

    --                     Merger and acquisition-
                          related net expenses             $(71)                              (46)  (0.04)

    December 31, 2016 - net income                                              $239                $0.20

    --                     Merger and acquisition-
                          related net expenses             $(96)                              (63)  (0.06)

    --                     Reduction to litigation
                          reserves                           $42                                 27     0.02

    September 30, 2016 - net income                                             $127                $0.11

    --                     Merger and acquisition-
                          related net expenses            $(159)                             (107)  (0.11)

    June 30, 2016 - net income                                                  $175                $0.19

    --                     Merger and acquisition-
                          related net expenses             $(21)                              (14)  (0.02)

    March 31, 2016 - net income                                                 $171                $0.20

    --                     Merger and acquisition-
                          related net expenses              $(6)                               (4)  (0.01)


    (1)     Favorable (unfavorable)
     impact on net income.

    (2)     EPS reflected on a fully
     diluted basis.

Net Interest Income, Net Interest Margin, and Average Balance Sheet

Table 3 - Net Interest Income and Net Interest Margin Performance Summary - Purchase Accounting Accretion Drives Year-over-Year NIM Expansion



                                 2017                                                 2016
                                 ----

    ($ in millions)          First           Fourth         Third          Second       First            Change (%)
    --------------

                     Quarter                 Quarter        Quarter        Quarter      Quarter   LQ                YOY
                     -------                 -------        -------        -------      -------  ---                ---

    Net interest
     income                             $730                          $735                         $625                                        $506        $503         (1)% 45%


    FTE adjustment                 12                    13                        11                 10                                   9           (8)          33
                                  ---                   ---                       ---                ---                                 ---           ---          ---

    Net interest
     income -FTE                  742                   748                       636                516                                 512           (1)          45

    Noninterest
     income                       312                   334                       302                271                                 242           (7)          29

    Total revenue -
     FTE                              $1,054                        $1,082                         $938                                        $787        $754         (3)% 40%




                                                                                                                           Change bp

    Yield / Cost                                                                                                       LQ                    YOY
    ------------                                                                                                       ---                   ---

    Total earning
     assets                     3.70%                3.60%                    3.52%             3.41%                              3.44%            10          26

    Total loans and
     leases                      4.07                  3.95                      3.81               3.63                                3.67            12           40

    Total securities             2.54                  2.58                      2.47               2.56                                2.56           (4)         (2)

    Total interest-
     bearing
     liabilities                 0.54                  0.48                      0.49               0.50                                0.46             6            8

    Total interest-
     bearing
     deposits                    0.26                  0.23                      0.22               0.23                                0.24             3            2


    Net interest
     rate spread                 3.16                  3.12                      3.03               2.91                                2.98             4           18

    Impact of
     noninterest-
     bearing funds
     on margin                   0.14                  0.13                      0.15               0.15                                0.13             1            1

    Net interest
     margin                     3.30%                3.25%                    3.18%             3.06%                              3.11%             5          19
                                 ====                  ====                      ====               ====                                ====           ===          ===


    See Pages 6-8 of Quarterly
     Financial Supplement for
     additional detail.

    Note: 2016 third quarter results
     reflect inclusion of FirstMerit
     since August 16, 2016.

Fully-taxable equivalent (FTE) net interest income for the 2017 first quarter increased $230 million, or 45%, from the 2016 first quarter. This reflected the benefit from the $24.9 billion, or 38%, increase in average earning assets coupled with a 19 basis point improvement in the FTE net interest margin (NIM) to 3.30%. Average earning asset growth included a $16.4 billion, or 32%, increase in average loans and leases and an $8.6 billion, or 57%, increase in average securities. The NIM expansion reflected a 26 basis point increase in earning asset yields and a 1 basis point increase in the benefit from noninterest-bearing funds, partially offset by an 8 basis point increase in funding costs. FTE net interest income during the 2017 first quarter included $36 million, or approximately 16 basis points, of purchase accounting impact.

Compared to the 2016 fourth quarter, FTE net interest income decreased $6 million, or 1%. Average earning assets decreased $0.3 billion, or less than 1%, sequentially, while the NIM increased 5 basis points. The increase in the NIM reflected a 10 basis point increase in earning asset yields and a 1 basis point increase in the benefit from noninterest-bearing funds, partially offset by a 6 basis point increase in the cost of interest-bearing liabilities. The purchase accounting impact on the net interest margin was approximately 16 basis points in the 2017 first quarter compared to approximately 18 basis points in the prior quarter.

Table 4 - Average Earning Assets - Commercial Drives Year-over-year and Linked-quarter Loan Growth



                                 2017                                                           2016
                                 ----

    ($ in billions)           First           Fourth           Third          Second               First           Change (%)
    --------------

                     Quarter          Quarter        Quarter         Quarter            Quarter     LQ          YOY
                     -------          -------        -------         -------            -------     ---         ---

    Commercial and industrial           $27.9                           $27.7                            $25.0                     $21.3      $20.6           1%     35%

    Commercial real estate        7.4                      7.2                      6.4                     5.2                5.2          2             41
                                  ---                      ---                      ---                     ---                ---        ---            ---

    Total commercial             35.3                     34.9                     31.3                    26.6               25.9          1             36
                                 ----                     ----                     ----                    ----               ----        ---            ---

    Automobile                   11.1                     10.9                     11.4                    10.1                9.7          2             14

    Home equity                  10.1                     10.1                      9.3                     8.4                8.4          -            19

    Residential mortgage          7.8                      7.7                      7.0                     6.2                6.0          1             29

    RV and marine finance         1.9                      1.8                      0.9                       -                 -         2         NM

    Other consumer                0.9                      1.0                      0.8                     0.6                0.6        (4)            60
                                  ---                      ---                      ---                     ---                ---

    Total consumer               31.7                     31.5                     29.4                    25.4               24.8          1             28
                                 ----                     ----                     ----                    ----               ----        ---

    Total loans and leases       67.0                     66.4                     60.7                    51.9               50.6          1             32
                                 ----                     ----                     ----                    ----               ----        ---            ---

    Total securities             23.6                     22.4                     18.2                    15.3               15.1          5             57

    Held-for-sale and other
     earning assets               0.5                      2.6                      0.8                     0.7                0.6       (81)          (17)

    Total earning assets                $91.1                           $91.5                            $79.7                     $67.9      $66.2            - %   38%
                                        =====                           =====                            =====                     =====      =====          === === ===


    See Page 6 of Quarterly
     Financial Supplement for
     additional detail.

    Note: 2016 third quarter results
     reflect inclusion of FirstMerit
     since August 16, 2016.

Average earning assets for the 2017 first quarter increased $24.9 billion, or 38%, from the year-ago quarter, primarily reflecting the impact of the FirstMerit acquisition. Average securities increased $8.6 billion, or 57%, which included $2.8 billion of direct purchase municipal instruments in our commercial banking segment compared to $2.1 billion in the year-ago quarter. Average residential mortgage loans increased $1.8 billion, or 29%, as we continue to see increased demand for residential mortgage loans across our footprint.

Compared to the 2016 fourth quarter, average earning assets decreased $0.3 billion, or less than 1%. On a reported basis, average securities increased $1.2 billion, or 5%, reflecting the reinvestment of the proceeds from the 2016 fourth quarter automobile loan securitization into securities qualifying as High Quality Liquid Assets for the Liquidity Coverage Ratio (LCR). Average loans and leases increased $0.6 billion, or 1%, primarily reflecting growth in automobile loans and core middle market and small business C&I lending. Average loans held for sale and other earnings assets decreased $2.1 billion, or 80%, primarily reflecting the $1.5 billion automobile loan securitization and the balance sheet optimization-related loan sales completed during the 2016 fourth quarter.

Table 5 - Average Liabilities - Relationship-Focus Continues to Drive Strong Year-over-year Core Deposit Growth



                                     2017                                              2016
                                     ----

                                 First           Fourth       Third         Second       First             Change (%)

    ($ in billions)             Quarter         Quarter      Quarter       Quarter      Quarter         LQ            YOY
    --------------              -------         -------      -------       -------      -------        ---            ---

    Demand deposits -
     noninterest-bearing                  $21.7                      $23.2                      $20.0                          $16.5        $16.3         (7)%  33%

    Demand deposits -
     interest-bearing                16.8               15.3                      12.4             8.4                     7.8           10           116
                                     ----               ----                      ----             ---                     ---          ---           ---

    Total demand deposits            38.5               38.5                      32.4            24.9                    24.1            -           60

    Money market deposits            18.7               18.6                      18.5            19.5                    19.7            -          (5)

    Savings and other domestic
     deposits                        12.0               12.3                       8.9             5.4                     5.3          (2)          126

    Core certificates of
     deposit                          2.3                2.6                       2.3             2.0                     2.3         (11)            3
                                      ---                ---                       ---             ---                     ---          ---           ---

    Total core deposits              71.5               72.0                      62.1            51.8                    51.4          (1)           39

    Other domestic deposits of
     $250,000 or more                 0.5                0.4                       0.4             0.4                     0.5           20             3

    Brokered deposits and
     negotiable CDs                   4.0                4.3                       3.9             2.9                     2.9          (7)           37

    Deposits in foreign offices         -               0.2                       0.2             0.2                     0.3        (100)        (100)

    Total deposits                        $76.0                      $76.9                      $66.6                          $55.3        $55.1         (1)%  38%
                                          =====                      =====                      =====                          =====        =====          ===   ===


    Short-term borrowings                  $3.8                       $2.6                       $1.3                           $1.0         $1.1          44% 231%

    Long-term debt                    8.5                8.6                       8.5             7.9                     7.2          (1)           18
                                      ---                ---                       ---             ---                     ---          ---           ---

    Total debt                            $12.3                      $11.2                       $9.8                           $8.9         $8.3          10%  42%
                                          =====                      =====                       ====                           ====         ====          ===   ===


    Total interest-bearing
     liabilities                          $66.5                      $64.9                      $56.3                          $47.8        $47.0           3%  42%


    See Page 6 of Quarterly
     Financial Supplement for
     additional detail.

    Note: 2016 third quarter results
     reflect inclusion of FirstMerit
     since August 16, 2016.

Average total deposits for the 2017 first quarter increased $21.0 billion, or 38%, from the year-ago quarter, while average total core deposits increased $20.1 billion, or 39%. Average total interest-bearing liabilities increased $19.5 billion, or 42%, from the year-ago quarter. These increases primarily reflect the impact of the FirstMerit acquisition. Average demand deposits increased $14.4 billion, or 60%, comprised of a $10.3 billion, or 67%, increase in average commercial demand deposits and a $4.2 billion, or 47%, increase in average consumer demand deposits. Average short-term borrowings increased $2.6 billion, or 231%, reflecting the maintenance of excess liquidity surrounding the branch conversion. Average long-term debt increased $1.3 billion, or 18%, reflecting the issuance of $3.0 billion and maturity of $1.0 billion of senior debt over the past five quarters.

Compared to the 2016 fourth quarter, average total core deposits decreased $0.6 billion, or 1%, primarily reflecting the divestiture of $0.6 billion of deposits and thirteen branches in the 2016 fourth quarter. Average demand deposits were flat as a $1.5 billion, or 10%, increase in average interest-bearing demand deposits offset a $1.5 billion, or 7%, decrease in average noninterest-bearing demand deposits. Average total debt increased $1.1 billion, driven by an increase in short-term borrowings of $1.2 billion, or 44%, reflecting the maintenance of excess liquidity surrounding the branch conversion.

Noninterest Income (see Basis of Presentation)

Table 6 - Noninterest Income (GAAP) - Implementation of FirstMerit-Related Revenue Enhancements Well Under Way



                           2017                                            2016
                           ----

                       First          Fourth       Third        Second       First            Change (%)

    ($ in millions)   Quarter        Quarter      Quarter      Quarter      Quarter        LQ            YOY
    --------------    -------        -------      -------      -------      -------       ---            ---
                                                                                                                                                 19
    Service charges
     on deposit
     accounts                    $83                       $92                       $87                          $76           $70         (9)%         %

    Cards and payment
     processing
     income                  47                49                       44             39                     36           (4)          29

    Mortgage banking
     income                  32                38                       41             32                     19          (16)          71

    Trust and
     investment
     management
     services                34                34                       29             22                     23             -          48

    Insurance income         15                16                       16             16                     16           (7)         (6)

    Brokerage income         16                17                       15             15                     16           (7)           2

    Capital markets
     fees                    14                19                       15             13                     13          (24)           9

    Bank owned life
     insurance income        18                17                       14             13                     14             3           30

    Gain on sale of
     loans                   13                25                        8              9                      5          (49)         138

    Securities gains
     (losses)                 -              (2)                       1              1                      -        (100)         NM

    Other income             41                30                       33             36                     30            38           35

    Total noninterest
     income                     $312                      $334                      $302                         $271          $242         (7)%    29%
                                ====                      ====                      ====                         ====          ====          ===     ===

Table 7 - Impact of Significant Items



                          2017                                         2016
                          ----

                       First        Fourth      Third         Second         First

    ($ in millions)   Quarter      Quarter     Quarter       Quarter        Quarter
    --------------    -------      -------     -------       -------        -------

    Service charges
     on deposit
     accounts                $   -                    $   -                        $   -   $   -   $   -

    Cards and payment
     processing
     income                  -              -                       -                  -   -

    Mortgage banking
     income                  -              -                       -                  -   -

    Trust and
     investment
     management
     services                -              -                       -                  -   -

    Insurance income         -              -                       -                  -   -

    Brokerage income         -              -                       -                  -   -

    Capital markets
     fees                    -              -                       -                  -   -

    Bank owned life
     insurance income        -              -                       -                  -   -

    Gain on sale of
     loans                   -              -                       -                  -   -

    Securities gains
     (losses)                -              -                       -                  -   -

    Other income             2             (1)                       -                  -   -

    Total noninterest
     income                     $2                      $(1)                        $   -   $   -   $   -
                               ===                       ===                       === === === === === ===

Table 8 - Adjusted Noninterest Income (Non-GAAP)



                           2017                                            2016
                           ----

                       First          Fourth       Third        Second       First            Change (%)

    ($ in millions)   Quarter        Quarter      Quarter      Quarter      Quarter        LQ            YOY
    --------------    -------        -------      -------      -------      -------       ---            ---

    Service charges
     on deposit
     accounts                    $83                       $92                       $87                          $76           $70       (9)% 19%

    Cards and payment
     processing
     income                  47                49                       44             39                     36           (4)        29

    Mortgage banking
     income                  32                38                       41             32                     19          (16)        71

    Trust and
     investment
     management
     services                34                34                       29             22                     23             -        48

    Insurance income         15                16                       16             16                     16           (7)       (6)

    Brokerage income         16                17                       15             15                     16           (7)         2

    Capital markets
     fees                    14                19                       15             13                     13          (24)         9

    Bank owned life
     insurance income        18                17                       14             13                     14             3         30

    Gain on sale of
     loans                   13                25                        8              9                      5          (49)       138

    Securities gains
     (losses)                 -              (2)                       1              1                      -        (100)         -

    Other income             39                31                       33             36                     30            26         30
                                             ---                      ---

    Total noninterest
     income                     $310                      $335                      $302                         $271          $242       (7)% 28%
                                ====                      ====                      ====                         ====          ====        ===  ===


    See Pages 9-10 of Quarterly
     Financial Supplement for
     additional detail.

    Note: 2016 third quarter results
     reflect inclusion of FirstMerit
     since August 16, 2016.

Reported noninterest income for the 2017 first quarter increased $71 million, or 29%, from the year-ago quarter, primarily reflecting the impact of the FirstMerit acquisition. Service charges on deposit accounts increased $13 million, or 19%, reflecting the benefit of the FirstMerit acquisition and continued new customer acquisition. Of the increase, $8 million was attributable to consumer deposit accounts, and $6 million was attributable to commercial deposit accounts. Mortgage banking income increased $13 million, or 71%, reflecting a 35% increase in mortgage origination volume and an $8 million increase from net mortgage servicing rights (MSR) hedging-related activities.

Compared to the 2016 fourth quarter, reported noninterest income decreased $22 million, or 7%. Gain on sale of loans decreased $12 million, or 49%, primarily reflecting the $11 million of gains related to the balance sheet optimization strategy completed in the 2016 fourth quarter. Service charges on deposit accounts decreased $8 million, or 9%, primarily reflecting a $7 million seasonal decline in service charges on consumer accounts. Mortgage banking income decreased $6 million, or 16%, primarily driven by a decline in net MSR activity. These decreases were partially offset by an $11 million, or 38%, increase in other income, primarily reflecting the $8 million unfavorable impact during the prior quarter related to ineffectiveness of derivatives used to hedge fixed-rate, long-term debt.

Noninterest Expense (see Basis of Presentation)

Table 9 - Noninterest Expense (GAAP) - Continued Focus on Implementation of FirstMerit-Related Cost Savings



                         2017                                           2016
                         ----

                      First         Fourth       Third        Second       First           Change (%)

    ($ in millions)  Quarter       Quarter      Quarter      Quarter      Quarter        LQ           YOY
    --------------   -------       -------      -------      -------      -------       ---           ---

    Personnel costs           $382                      $360                      $405                         $299      $285       6% 34%

    Outside data
     processing and
     other services        87                89                      91              63                     62       (2)       41

    Equipment              47                60                      41              32                     33      (22)       43

    Net occupancy          68                49                      41              31                     31        37       115

    Professional
     services              18                23                      47              21                     14      (21)       35

    Marketing              14                21                      14              15                     12      (35)       13

    Deposit and
     other insurance
     expense               20                16                      15              12                     11        27        79

    Amortization of
     intangibles           14                14                       9               4                      4         2       287

    Other expense          57                49                      48              47                     39        16        46

    Total
     noninterest
     expense                  $707                      $681                      $712                         $524      $491       4% 44%
                              ====                      ====                      ====                         ====      ====      ===  ===

    (in thousands)
    -------------

    Number of
     employees
     (Average full-
     time
     equivalent)         16.3              16.0                    14.5            12.4                   12.4        2%      31%

Table 10 - Impacts of Significant Items



                         2017                                         2016
                         ----

                      First        Fourth      Third        Second       First

    ($ in millions)  Quarter      Quarter     Quarter      Quarter      Quarter
    --------------   -------      -------     -------      -------      -------

    Personnel costs           $20                     $(5)                      $76         $5  $  -

    Outside data
     processing and
     other services        14              15                      28               3     -

    Equipment               6              20                       5               -    -

    Net occupancy          23               7                       7               -    -

    Professional
     services               4               9                      34              11     4

    Marketing               1               4                       1               -    -

    Deposit and
     other insurance
     expense                -              -                      -              -    -

    Amortization of
     intangibles            -              -                      -              -    -

    Other expense           5               3                       8               2     1
                          ---             ---                     ---             ---   ---

    Total
     noninterest
     expense                  $73                      $53                      $159        $21    $6
                              ===                      ===                      ====        ===   ===

Table 11 - Adjusted Noninterest Expense (Non-GAAP)



                          2017                                         2016
                          ----

                      First          Fourth     Third        Second      First            Change (%)

    ($ in millions)  Quarter        Quarter    Quarter      Quarter     Quarter        LQ            YOY
    --------------   -------        -------    -------      -------     -------       ---            ---

    Personnel costs            $362                    $365                     $329                        $294      $285     (1)% 27%

    Outside data
     processing and
     other services         73              73                      63             60                    62         -      18

    Equipment               41              40                      36             32                    33         3       24

    Net occupancy           44              42                      34             30                    31         5       42

    Professional
     services               14              14                      13             11                     9         -      56

    Marketing               13              17                      14             15                    12      (24)       8

    Deposit and
     other insurance
     expense                20              16                      15             12                    11        27       79

    Amortization of
     intangibles            14              14                       9              4                     4         2      287

    Other expense           52              47                      40             46                    38        11       37

    Total
     noninterest
     expense                   $634                    $628                     $553                        $503      $485       1% 31%
                               ====                    ====                     ====                        ====      ====      ===  ===


    See Page 9 of Quarterly
     Financial Supplement for
     additional detail.

    Note: 2016 third quarter results
     reflect inclusion of FirstMerit
     since August 16, 2016.

Reported noninterest expense for the 2017 first quarter increased $216 million, or 44%, from the year-ago quarter, primarily reflecting the impact of the FirstMerit acquisition, including Significant Items. Personnel costs increased $97 million, or 34%, primarily reflecting $20 million of acquisition-related personnel expense and a 32% increase in average full-time equivalent employees. Other expense increased $18 million, or 46%, including a $5 million increase in OREO and foreclosure expense as well as the $4 million net increase in acquisition-related expenses. Deposit and other insurance expense increased $9 million, or 79%, reflecting the larger assessment base as well as the FDIC Large Institution Surcharge implemented during the 2016 third quarter.

Reported noninterest expense increased $26 million, or 4%, from the 2016 fourth quarter, including a $20 million net increase in Significant Items. Personnel costs increased $22 million, or 6%, primarily related to the $18 million gain on the settlement of a portion of the FirstMerit pension plan liability during the 2016 fourth quarter. Other expense increased $8 million, or 16%, primarily reflecting the $6 million benefit related to the extinguishment of trust preferred securities in the 2016 fourth quarter. Marketing expense decreased $8 million, or 35%, primarily reflecting the $3 million net decrease in acquisition-related expenses and the timing of advertising campaigns.

Credit Quality

Table 12 - Credit Quality Metrics - NALs and NPAs Decrease Sequentially, while NCOs Remain Better Than Long-Term Expectations



                                2017                                                         2016
                                ----

    ($ in millions)        March 31,      December 31,        September 30,      June 30,     March 31,
    --------------         ---------      ------------        -------------      --------     ---------

    Total nonaccrual loans
     and leases                      $401                                   $423                           $404            $461 $499

    Total other real
     estate                       50                       51                             71                  29        26

    Other NPAs (1)                 7                        7                              -                  -        -
                                 ---                      ---                            ---                ---      ---

    Total nonperforming
     assets                      458                      481                            475                 490       525

    Accruing loans and
     leases past due 90
     days or more                128                      129                            135                  99       106

    NPAs + accruing loans
     and lease past due 90
     days or more                    $586                                   $610                           $610            $589 $631
                                     ====                                   ====                           ====            ==== ====

    NAL ratio (2)              0.60%                   0.63%                         0.61%              0.88%    0.97%

    NPA ratio (3)               0.68                     0.72                           0.72                0.93      1.02

    (NPAs+90
     days)/(Loans+OREO)         0.87                     0.91                           0.92                1.12      1.22

    Provision for credit
     losses                           $68                                    $75                            $64             $25  $28

    Net charge-offs               39                       44                             40                  17         9

    Net charge-offs /
     Average total loans       0.24%                   0.26%                         0.26%              0.13%    0.07%

    Allowance for loans
     and lease losses                $673                                   $638                           $617            $623 $614

    Allowance for unfunded
     loan commitments and
     letters of credit            92                       98                             88                  74        75

    Allowance for credit
     losses (ACL)                    $765                                   $736                           $705            $697 $689
                                     ====                                   ====                           ====            ==== ====

    ACL as a % of:

    Total loans and leases     1.14%                   1.10%                         1.06%              1.33%    1.34%

    NALs                         190                      174                            174                 151       138

    NPAs                         167                      153                            148                 142       131


    (1)       Other nonperforming assets
     include certain impaired investment
     securities.

    (2)       Total NALs as a % of total
     loans and leases.

    (3)       Total NPAs as a % of sum of
     loans and leases and other real
     estate.

    See Pages 11-14 of Quarterly Financial
     Supplement for additional detail.

Overall asset quality remains strong, with some modest volatility. The overall consumer credit metrics continue to perform as expected, with slightly improved results compared to the prior quarter. The commercial portfolios continue to experience some quarter to quarter volatility, with the current quarter reporting a significantly lower net loss despite limited recoveries compared to prior periods. The modest volatility is the result of the absolute low level of problem loans.

Nonaccrual loans and leases (NALs) decreased $97 million, or 20%, from the year-ago quarter to $401 million, or 0.60% of total loans and leases. The year-over-year decrease was centered in the Commercial portfolio and was primarily associated with the improved performance of a small number of energy sector loan relationships that were added to NALs in the 2016 first quarter. While the energy portfolio was a primary driver of the decrease in NALs over the past year, that portfolio continues to represent less than 1% of total loans outstanding. Nonperforming assets (NPAs) decreased $67 million, or 13%, from the year-ago quarter to $458 million, or 0.68% of total loans and leases and OREO. NALs decreased $21 million, or 5%, from the prior quarter, while NPAs decreased $23 million, or 5%, from the prior quarter. The linked-quarter decreases primarily resulted from pay-downs and NALs that returned to accruing status.

The provision for credit losses increased $40 million year-over-year to $68 million in the 2017 first quarter. Net charge-offs (NCOs) increased $31 million to $39 million primarily as a result of material CRE recoveries in the year-ago quarter as well as charge-offs on the acquired FirstMerit portfolio. NCOs represented an annualized 0.24% of average loans and leases in the current quarter, down from 0.26% in the prior quarter but up from 0.07% in the year-ago quarter. We continue to be pleased with the net charge-off performance within each portfolio and in total.

The period-end allowance for credit losses (ACL) as a percentage of total loans and leases decreased to 1.14% from 1.34% a year ago, while the ACL as a percentage of period-end total NALs increased to 190% from 138%. We believe the level of the ACL is appropriate given the improvement in the credit quality metrics and the current composition of the overall loan and lease portfolio. The year-over-year decline in the coverage ratios is primarily a function of the purchase accounting impact associated with the FirstMerit acquisition.

Capital

Table 13 - Capital Ratios - FirstMerit Acquisition Effectively Deploys Capital



                        2017                                                                      2016
                        ----

    ($ in
     millions)     March 31,         December 31,        September 30,         June 30,  March 31,
    ----------     ---------         ------------        -------------         --------  ---------

    Tangible
     common equity
     /tangible
     assets ratio      7.28%                       7.16%                           7.14%                7.96%    7.89%

    Common equity
     tier 1 risk-
     based capital
     ratio (1)         9.67%                       9.56%                           9.09%                9.80%    9.73%

    Regulatory
     Tier 1 risk-
     based capital
     ratio (1)        11.04%                      10.92%                          10.40%               11.37%   10.99%

    Regulatory
     Total risk-
     based capital
     ratio (1)        13.15%                      13.05%                          12.56%               13.49%   13.17%

    Total risk-
     weighted
     assets (1)              $78,082                                   $78,263                          $80,513        $60,721 $59,798


    (1)       Figures are estimated
     and are presented on a Basel III
     standardized approach basis.

    See Pages 15-16 of Quarterly
     Financial Supplement for
     additional detail.

The tangible common equity to tangible assets ratio was 7.28% at March 31, 2017, down 61 basis points from a year ago. Common Equity Tier 1 (CET1) risk-based capital ratio was 9.67% at March 31, 2017, down from 9.73% a year ago. The regulatory Tier 1 risk-based capital ratio was 11.04% compared to 10.99% at March 31, 2016. Capital ratios were impacted by the $1.3 billion of goodwill created and the issuance of $2.8 billion of common stock as part of the FirstMerit acquisition. The regulatory Tier 1 risk-based and total risk-based capital ratios benefited from the issuance of $200 million of Class D preferred equity during the 2016 second quarter and the issuance of $100 million of Class C preferred equity during the 2016 third quarter in exchange for FirstMerit preferred equity in conjunction with the acquisition. The total risk-based capital ratio was impacted by the repurchase of $20 million of trust preferred securities during the 2016 third quarter and $40 million of trust preferred securities during the 2016 fourth quarter, both of which were executed under the de minimis clause of the Federal Reserve's CCAR rules. In addition, $5 million of trust preferred securities were acquired in the FirstMerit acquisition and subsequently were redeemed. There were no common shares repurchased over the past five quarters.

Income Taxes

The provision for income taxes in the 2017 first quarter was $59 million, compared to $55 million in the 2016 first quarter. The effective tax rates for the 2017 first quarter and 2016 first quarter were 22.2% and 24.3%, respectively. At March 31, 2017, we had a net federal deferred tax asset of $91 million and a net state deferred tax asset of $41 million.

Expectations - 2017

"We expect ongoing consumer and business confidence to translate into private sector investment fueling continued economic momentum," Steinour said. "We are seeing solid manufacturing and infrastructure growth in the Midwest. Businesses are adding jobs and investing more, and growth in our pipelines has followed. We will continue to leverage our increased scale, capabilities, and additional expertise. We are on pace to meet our previously-announced commitments for $255 million of annualized cost savings and $100 million of annualized revenue enhancements from the FirstMerit acquisition."

We expect full-year revenue growth to be in excess of 20%. While continuing to proactively invest in the franchise, we will manage the expense base with respect to our annual goal to deliver positive operating leverage. We remain on track to implement all FirstMerit-related cost savings by the end of the 2017 third quarter.

We expect average balance sheet growth, driven largely by the FirstMerit acquisition, to be in excess of 20%. On a period-end basis, we expect loan growth of 4% to 6%.

Overall, asset quality metrics are expected to remain near current levels, although moderate quarterly volatility also is expected, given the current low level of problem assets and credit costs. We anticipate NCOs will remain below our long-term normalized range of 35 to 55 basis points, while provision expense will continue to normalize.

The effective tax rate for 2017 is expected to be in the range of 24% to 27%, excluding Significant Items.

Conference Call / Webcast Information

Huntington's senior management will host an earnings conference call on April 19, 2017, at 9:00 a.m. (Eastern Daylight Time). The call may be accessed via a live Internet webcast at the Investor Relations section of Huntington's website, www.huntington.com, or through a dial-in telephone number at (877) 407-8029; Conference ID #13657845. Slides will be available in the Investor Relations section of Huntington's website about an hour prior to the call. A replay of the webcast will be archived in the Investor Relations section of Huntington's website. A telephone replay will be available approximately two hours after the completion of the call through April 28, 2017 at (877) 660-6853 or (201) 612-7415; conference ID #13657845.

Please see the 2017 First Quarter Quarterly Financial Supplement for additional detailed financial performance metrics. This document can be found on Huntington's Investor Relations website, www.huntington-ir.com.

Caution regarding Forward-Looking Statements

This communication contains certain forward-looking statements, including, but not limited to, certain plans, expectations, goals, projections, and statements, which are not historical facts and 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: 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; movements in interest rates; competitive pressures on product pricing and services; success, impact, and timing of our business strategies, including market acceptance of any new products or services implementing our "Fair Play" banking philosophy; 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; the possibility that the anticipated benefits of the merger with FirstMerit Corporation are not realized when expected or at all, including as a result of the impact of, or problems arising from, the integration of the two companies or as a result of the strength of the economy and competitive factors in the areas where we do business; diversion of management's attention from ongoing business operations and opportunities; potential adverse reactions or changes to business or employee relationships, including those resulting from the completion of the merger with FirstMerit Corporation; our ability to complete the integration of FirstMerit Corporation successfully; and other factors that may affect our future results. Additional factors that could cause results to differ materially from those described above can be found in our Annual Report on Form 10-K for the year ended December 31, 2016, which is on file with the Securities and Exchange Commission (the "SEC") and available in the "Investor Relations" section of our website, http://www.huntington.com, under the heading "Publications and Filings" and in other documents we file with the SEC.

All forward-looking statements speak only as of the date they are made and are based on information available at that time. We do not assume any 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.

Basis of Presentation

Use of Non-GAAP Financial Measures

This document contains GAAP financial measures and non-GAAP financial measures where management believes it to be helpful in understanding Huntington's results of operations or financial position. Where non-GAAP financial measures are used, the comparable GAAP financial measure, as well as the reconciliation to the comparable GAAP financial measure, can be found in this document, conference call slides, or the Form 8-K related to this document, all of which can be found on Huntington's website at www.huntington-ir.com.

Annualized Data

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

Fully-Taxable Equivalent Interest Income and Net Interest Margin

Income from tax-exempt earning assets is increased by an amount equivalent to the taxes that would have been paid if this income had been taxable at statutory rates. This adjustment puts all earning assets, most notably tax-exempt municipal securities and certain lease assets, on a common basis that facilitates comparison of results to results of competitors.

Earnings per Share Equivalent Data

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

Rounding

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

Significant Items

From time to time, revenue, expenses, or taxes are impacted by items judged by Management 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 Management 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 Management 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 write-downs, etc., reflect ordinary banking activities and are, therefore, typically excluded from consideration as a Significant Item.

Management believes the disclosure of "Significant Items", when appropriate, aids analysts/investors in better understanding corporate performance and trends so that they can ascertain which of such items, if any, they may wish to include/exclude from their analysis of the company's performance - i.e., within the context of determining how that performance differed from their expectations, as well as how, if at all, to adjust their estimates of future performance accordingly. To this end, Management has adopted a practice of listing "Significant Items" in its external disclosure documents (e.g., earnings press releases, quarterly performance discussions, 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. A number of items could materially impact these periods, including those described in Huntington's 2016 Annual Report on Form 10-K and other factors described from time to time in Huntington's other filings with the Securities and Exchange Commission.

About Huntington

Huntington Bancshares Incorporated is a regional bank holding company headquartered in Columbus, Ohio, with $100 billion of assets and a network of 996 branches and 1,855 ATMs across eight Midwestern states. Founded in 1866, The Huntington National Bank and its affiliates provide consumer, small business, commercial, treasury management, wealth management, brokerage, trust, and insurance services. Huntington also provides auto dealer, equipment finance, national settlement and capital market services that extend beyond its core states. Visit huntington.com for more information.

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