Huntington National Bank 2005 Annual Report Download - page 33

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION HUNTINGTON BANCSHARES INCORPORATED
AND RESULTS OF OPERATIONS
INTRODUCTION
Huntington Bancshares Incorporated (we or our) is a multi-state diversified financial holding company organized under Maryland
law in 1966 and headquartered in Columbus, Ohio. 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, private mortgage insurance; reinsure credit life and disability insurance; and sell other insurance and financial
products and services. Our banking offices are located in Ohio, Michigan, West Virginia, Indiana, and Kentucky. Certain activities
are also conducted in Arizona, Florida, Georgia, Maryland, Nevada, New Jersey, North Carolina, Pennsylvania, South Carolina,
and Tennessee. We have a foreign office in the Cayman Islands and another in Hong Kong. The Huntington National Bank (the
Bank), organized in 1866, is our only bank subsidiary.
The following discussion and analysis provides you with information we believe necessary for understanding our financial
condition, changes in financial condition, results of operations, and cash flows and should be read in conjunction with the
financial statements, notes, and other information contained in this report.
You should note the following discussion is divided into key segments:
–I NTRODUCTION — Provides overview comments on important matters including risk factors, the now settled Securities and
Exchange Commission (SEC) investigation, any bank regulatory agreements, and critical accounting policies and the use of
significant estimates. These are essential for understanding our performance and prospects.
–D ISCUSSION OF R ESULTS OF O PERATIONS — Reviews financial performance from a consolidated company perspective. It
also includes a Significant Factors Influencing Financial Performance Comparisons section that summarizes key issues
helpful for understanding performance trends. Key consolidated balance sheet and income statement trends are also
discussed in this section.
–R ISK M ANAGEMENT AND C APITAL — Discusses credit, market, liquidity, and operational risks, including how these are
managed, as well as performance trends. It also includes a discussion of liquidity policies, how we fund ourselves, 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.
–L INES OF B USINESS D ISCUSSION — Provides an overview of financial performance for each of our major lines of business
and provides additional discussion of trends underlying consolidated financial performance.
–R ESULTS F OR T HE F OURTH Q UARTER — Provides a discussion of results for the 2005 fourth quarter compared with the
year-earlier quarter.
A reading of each section is important for you to understand fully the nature of our financial performance and prospects.
Forward-Looking Statements
This report, including Management’s Discussion and Analysis of Financial Condition and Results of Operations, contains
forward-looking statements. These include descriptions of products or services, plans or objectives for future operations, including
any pending acquisitions, and forecasts of revenues, earnings, cash flows, or other measures of economic performance. Forward-
looking statements can be identified by the fact that they do not relate strictly to historical or current facts.
By their nature, forward-looking statements are subject to numerous assumptions, risks, and uncertainties. A number of factors
could cause actual conditions, events, or results to differ significantly from those described in the forward-looking statements.
These factors include, but are not limited to, those set forth under Risk Factors of our Annual Report on Form 10-K for the year
ended December 31, 2005, and other factors described in this report and from time to time in our other filings with the SEC.
You should understand forward-looking statements to be strategic objectives and not absolute forecasts of future performance.
Forward-looking statements speak only as of the date they are made. 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.
Risk Factors
We, like other financial companies, are subject to a number of risks, many of which are outside of our direct control, though
efforts are made to manage those risks while optimizing returns. Among the risks assumed are: (1) credit risk, which is the risk
that loan and lease customers or other counterparties will be unable to perform their contractual obligations, (2) market risk,
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