Good afternoon. My name is Heather and I will be your conference operator today. At this time I would like to welcome everyone to the Huntington fourth quarter earnings conference call. All lines have been placed on mute to prevent any background noise. After the speaker’s remarks there will be a question and answer session. (Operator Instructions). Mr. Gould, you may begin your conference.

Thank you, Heather, and welcome, everybody. I’m Jay Gould, Director of Investor Relations for Huntington. Copies of the slides we will be reviewing can be found on our website, huntington.com. This call is being recorded and will be available as a rebroadcast starting about one hour from the close of the call. Please call the Investor Relations department at 614-480-5676 for more information on how to access these recordings for playback or should you have difficulty getting a copy of the slides. Slides two and three note several aspects of the basis of today’s presentation. I encourage you to read these, but please let me point out one key disclosure. This presentation contains both GAAP and non-GAAP financial measures where we believe it helpful to 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 financial measure, can be found in the slide presentation, in its appendix, in the press release and the quarterly financial review supplement to today’s earnings release, and in the Form 8K which we filed earlier today, all of which can be ultimately found on our website. Today’s discussion, including Q&A, may contain forward-looking statements. Such statements are based on information and assumptions made available at this time and are subject to change, risk, and uncertainties which may cause actual results to differ materially. We assume no obligation to update such statements. For a complete discussion of risks and uncertainties please refer to slide four and material filed with the SEC, including our most recent Form 10K, 10Q, and 8K filings. Now turning to today’s presentation. As noted on slide five, participating today are Tom Hoaglin, Chairman, President, and Chief Executive Officer, Don Kimble, Executive Vice President and Chief Financial Officer, and Tim Barber, Senior Vice President and Credit Risk Management. Let’s get started. Over to you, Tom.

Thank you, Jay, and welcome, everyone. What a quarter. I join my counterparts who say that the current environment overwhelmed by the housing crisis is the most difficult or one of the most difficult in our banking careers. Turning to slide six, there are many subjects we plan to address today: Franklin and our restructuring the relationship; the credit picture unrelated to Franklin; other significant items in the fourth quarter; the net interest margin; our capital levels in common stock dividend; our 2008 outlook; merger integration progress; and our thoughts about management succession. I’ll begin with comments in my assessment of fourth quarter events and performance. Don will then review the quarter’s financials, but in more of a summary fashion. Tim will review our Franklin Credit relationship, which has changed significantly as a result of the restructuring completed at the end of last year. He will then provide a detailed look at credit quality trends and our home builder and mortgage portfolios. Don will then review our 2008 outlook, including earnings targets and performance drivers. I’ll return with summary comments followed by Q&A. Turning to slide seven, we’re obviously greatly disappointed with our $0.65 share per loss for the quarter. Regarding Franklin, on November 16th we announced we were projecting a negative impact of up to $450 million pre-tax or $300 million after-tax in the fourth quarter with Franklin-related write offs and reserve editions to reflect our lost exposure. On December 28th we successfully completed a restructure in the relationship resulting in a pre-tax impact of $424 million, which obviously reduced our capital. It also resulted in a 15 basis point one-time reduction to our fourth quarter net interest margin as it represented lost interest while this loan was on non-accrual status in November and through December. This is now…

Thanks, Tom. Turning to slide nine, our reported net loss of $239.3 million or $0.65 per common share for the quarter. These results were negatively impacted by five significant items. First, a $423.6 million charge to earnings or $0.75 per share related to the Franklin relationship. This charge reflected a provision of $405.8 million and a reversal of interest income of $17.9 million. This relationship will be reviewed in more detail later. Second, $63.5 million or $0.11 per share of net market related losses consisting of four items: $34 million of loss on loans held for sale. This loss included additional marks on the loans sold during the quarter, as well as to the remaining loans included in and held for sale; $11.6 million in net security losses related to certain investment securities backed by mortgages; $9.4 million of equity investment losses; and $8.6 million negative impact from the re-evaluation of mortgage servicing rights (inaudible). Third, $44.4 million or $0.08 per share of merger costs, including $13.4 million related to the previously announced retirement of Marty Adams. Fourth, $24.9 million or $0.04 per share of VISA indemnification charge. Our expectation is we will see value in the future IPO of VISA with receipt of stock will more than offset this charge. Lastly, $8.9 million or $0.02 per share of increases to litigation reserves on existing cases. Slide 10 provides a quick snapshot of the quarter’s performance. As previously noted, our reported loss was $0.65 per share. Our net interest margin was 3.26%, down 26 basis points. This level reflects a 15 basis point reduction due to the Franklin loans being put on non-accrual status from November until the loans were restructured in late December. All interest payments were received on time during this period but were applied to reduce the…

Thanks, Don. Turning to slide 12, Huntington negotiated a significant restructure of the Franklin relationship as of December 28th, 2007. The specifics of the restructure detailed in our January 3rd 8K filing created an appropriate level of debt given the collateral. Interest coverage for the entire bank debt after the restructure is in excess of the 1.25 based on the one-month (inaudible) rate of 4.5%. Clearly the current interest rate environment has a positive impact on the interest coverage ratio. Huntington’s exposure after the restructure is $1.2 billion with $800 million secured by purchased first and second mortgages and $400 million secured by sub-prime first originated by the Tribeca subsidiary. Huntington has a reserve of $115 million or 9.7% associated with the Franklin exposure. Huntington will carry these loans as sub-standard on our balance sheet. We firmly believe that these actions are sufficient to allow for orderly retainment of the restructured debt with no credit quality performance impact on 2008 earnings. We have an ongoing performance analysis structure in place and are committed to formal quarterly impairment testing. As part of the analysis process we engaged a third party to perform an independent review of the portfolio and our actions. This independent review confirmed our actions as appropriate. Slide 13 summarizes certain collateral performance assumptions. Conservative expected loss assumptions were modeled over the life of the over 30,000 individual first and second lien residential mortgages. These assumptions were more conservative than performance results communicated by Franklin in 2007. Our modeled results were consistent with an analysis performed by the independent third party. The model cash flows and estimated losses over the life of the mortgages are consistent with our November 2007 assumption. This results in the interest coverage that is expected to exceed the minimum interest coverage covenant of 1.25x.…

Thanks, Tim. Turning to slide 25, we provided additional detail to help analyze our earnings outlook. As we provide our usual line item review of our earnings guidance, we will provide additional detail on our net charge-off expectations, a summary of our identified revenue synergies from the Sky Financial acquisition, and then review our capital assumptions for 2008. As you know, when earnings guidance is given, it is our practice to do so on a GAAP basis unless otherwise noted. Such guidance includes the expected results of all significant forecasted activities; however guidance typically excludes selected items where the timing of the financial impact is uncertain until the impact can be reasonably forecasted; and it excludes any unusual or one-time items as well. We are targeting 2008 earnings of $1.57 to $1.62 per share, excluding merger costs which are estimated to be $0.01 to $0.02 per share. We anticipate that the economic environment will continue to be negatively impacted with weaknesses in residential real estate markets and struggles in the manufacturing sector. It continues to be our expectation that any impacts will be greatest among our borrowers in our Eastern Michigan and Northern Ohio markets. However interest rates may change, we expect to maintain our customary neutral interest rate position. Given this backdrop, here are our outlook comments. Revenue growth in the low single-digit range. This is expected to reflect a net interest margin of around 3.35%. This is down slightly from the fourth quarter adjusted level of 3.41%; that is a reported 3.26% plus the 15 basis point one-time Franklin impact. Reduction from the 3.41% reflects the impact of the lost interest income due to the charge-off on the loan along with an assumption of continued aggressive pricing in our markets. Annualized average commercial loan growth in the mid…

Thanks, Don. We’ve covered a lot of ground in a short period of time so let me recap the key points we feel are important that our investors understand as we focus on 2008. First, I realize that your confidence in us has been hurt by our experience with Franklin and we’re working hard to restore it. Based on all we know and all we are anticipating about how this credit and its underlying collateral will perform, we believe that our assumptions and reserves are appropriately conservative and that any performance issues associated with Franklin have been fully addressed. Second, we believe the remaining risk associated with future negative market-related volatility is minimal. Third, the credit quality environment is expected to remain difficult. We are expecting 2008 credit losses to exceed the 2007 level. We hope they will peak in 2008 and begin to decline in 2009. Nevertheless, we are confident that we are well-positioned to weather the storm. Also, our business model is sound and is producing results. With the intensity of merger integration efforts behind us, our focus is on credit and on sales and service execution, particularly in our new regions. While there is still some merger expense saves to be achieved, we are equally excited about the revenue opportunities before us. Lastly, I want you to hear that the team and I believe that our earnings target of $1.57 to $1.62 per share in 2008 is an achievable -- albeit not easy -- target. Through hard work and focus on performance, we are up to the task. Operator, we will now open the discussion to questions.

Your first question comes from Andrea Jao - Lehman Brothers.

Given your net charge-offs ratio of 72 bips and then your projected net charge-off ratio of 60 to 65 in 2008, what drives the decrease? When I put Slide 26 right beside Slide 19, there is no obvious driver of the decrease.

Let me make a few comments than I will ask Tim Barber to comment as well. What we have done in arriving at this estimate for 2008, we’ve taken a look at the second half of 2007; we’ve looked at name by name by name in our commercial real estate portfolio which is where much activity will come. We’ve looked at what we did in the fourth quarter as well, and both our line originators, our workout people, and our central credit risk people felt comfortable in light of all that with the CRE and middle market C&I portion of that 60 to 65 basis point range. Tim, why don’t you comment about consumer side?

On the consumer side, as you know, we have a lot of portfolio metrics. We spent a great deal of time analyzing trends and changes in our borrowers and we believe that 2008 will be exactly within the range of what we presented here in the presentation. Indirect auto will move a little higher, our home equity portfolio will be slightly higher, but pretty close to flat on an overall basis. Our residential mortgage portfolio will be flat for 2007.

The other comment I would make, Andrea, is that I am well aware that there are no guarantees in this environment. So we have done our level best to dimension what we consider to be a realistic risk to us in 2008, but our crystal ball is not any clearer than anybody else so we certainly don’t offer any guarantees, this is absolutely our best effort.

Could you give a bit more detail about the capital issuance, the magnitude, and the timing that you’re looking at if you can at this point?

We are working through those plans, Andrea, but our thought would be to have a capital issuance probably in the $250 million to $300 million size, and with that we believe that our regulatory capital ratios and our rating agency capital levels would be at or above our peer levels with that type of issuance.

Your next question comes from Matthew O’Connor - UBS. Matthew O’Connor - UBS : Not to harp on this, but it seems like it’s optimistic to assume home equity losses are flat to the current levels, given what’s going on in home prices and just the economy overall.

Matt, I guess I would address that in a couple ways. One, we’ve consistently talked through the quality of borrower versus the home price value, if the borrower quality remains high and the probability of default remains low than the value of the home is less of an issue. We’re seeing pretty consistent default rates coming through. That leads us down the path of consistent levels in 2008. We spent a lot of time looking at vintages and we’ve seen improvement in the vintages of our 2006 and 2007 originations, pretty dramatic improvements and those combined tell us 2008 will be where we’ve projected and we’re seeing 2009 a little bit lower. Matthew O’Connor - UBS : Did you talk about how much your reserve build will be this year?

Matt, we didn’t say that explicitly. We just said that the reserve would be an increase modestly from the fourth quarter levels. Matthew O’Connor - UBS : And that’s relative to loans or in absolute dollars?

In percentages, so we’re currently at 144 so we think we would have a modest increase in that going forward. Matthew O’Connor - UBS : What kind of macro assumptions are you using in your estimates?

Macro in terms of economic? Well what I would say is in our part of the world we do not expect the economy to be a very pretty picture in 2008. In some parts of Michigan, as you are well aware, there are depression-like conditions. We fully expect that will continue to be the case. Most of our other markets are either stable or fairly weak. Clearly, the sector that is impacted greatest is housing, but we fully expect in ‘08 that there will be some spillover effect in other parts of the economy. So we are not predicating growth assumptions or credit quality assumptions on a rosy picture. We do see very much continued weakness throughout the year.

Your next question comes from Tony Davis - Stifel Nicolaus.

Tim, I wonder if you could tell us what percentage of the middle-market construction development loans have you gotten updated appraisal on here in the last quarter or so? What’s the LTV average of that portfolio right now?

I can’t give you an average loan to value for the portfolio. We originate in the 65% to 75% LTV range, that’s our goal or our policies. The percentage that we have had reevaluated, I think maybe we’ll have to get back to you with a specific number on the percent. What I can tell you is as these loans come up for renewal or as there are identified issues with individual projects we absolutely get a revaluation immediately.

Of the $1.5 billion, how much of that would be in Northern Ohio and the East Michigan?

We’ve got slides in the appendix that dimension the East Michigan portfolio at $135 million and we have said Northern Ohio was about $300 million.

Tom, from a growth standpoint, I wonder what loan officers are seeing in terms of a borrow attitude outside of real estate today, for example, versus say three to six months ago? How soft does the general business environment feel in your market?

Tony, I think that an accurate answer is it varies by geography. It feels pretty bad in most of Michigan; a tremendous amount of caution there, lots of borrowers just hunkered down, if you will. When you go elsewhere -- Central Ohio, Cincinnati, Indianapolis -- a different story. We’re not talking about boom economies here, but there is a greater sense of optimism, a greater inclination to invest. Keeping in mind that parts of our footprint have significant numbers of export-related industries, many companies there are benefiting as a result of the weak dollar, so while there’s certainly a significant segment of manufacturing that is under stress, there are other portions of it in our part of the world that as captured some of that that are benefiting at the current time. So if I could generalize I’d say considerable caution but it does vary across portions of our footprint.

Final thing to you Tom. In this environment with what’s happening in asset quality, I would imagine your appetite for deals on the M&A front has been satiated for a bit. Also in that sense, what attitude are you seeing among your smaller competitors?

Well, an accurate description Tony would be I am stuffed and I’m suffering from indigestion to continue the metaphor. This period of time I think is one of considerable focus on behalf of Huntington for better and better execution of what we have today relative to smaller competitors. Time will tell whether I’m right or not, I am sensing that everybody is focused on its own challenges now, credit, margin, otherwise, there really is not a focus on M&A activity to any significant degree.

Your next question comes from Bob Hughes - KBW.

I hate to harp on the issue, as Matt said before, but still a little incredulous as to the home equity assumptions. It seems to me that even if you felt like the quality of your borrowers was holding up and the probability of default was not materially changed, that your loss default would have to be going up in this environment based on what you’re seeing in the rest of your portfolio and the actions you are taking against the construction book. Can you help me understand why that would not be the case.

Our loss given default assumption is essentially 100% on our home equity portfolio so if a borrower defaults, 100% of that flows right through to the loss line and that’s been consistent over the past couple years. There are segments if there is a very low original loan-to-value as an example, that aren’t at 100, but overall the number actually calculates in the high 90% range. That’s really why we’ve spent so much time focusing on the probability of default because we’re assuming 100% loss, given default.

When you look at that borrower base there, based on your own internal analysis can you tell me what you are basing that assumption on? Is that based on FICO scores? Do you believe that to be the number one determinant?

As we look at our portfolio we update FICO scores on a quarterly basis. The migration of those scorers, the percent in low score categories, as examples, are the things that we look at as primary indicators of our future LTVs.

Because it strikes me that we’ve heard from a number of other companies and maybe your experience will be different, but I’ve heard from a number of other companies that they view FICOs as almost being irrelevant to some degree and that LTV is the number one determining factor. Would you differ from that view?

From a predicting default standpoint?

Yes.

I think that if you are assuming a loss given default of 100%, then the prediction of the default has much more to do with the FICO score. We’ve got years of analysis that would indicate that it is highly predictive. Is it the only factor? Absolutely not. Can you have a high FICO borrower that ends up in an underwater position and something else happens that could cause them to default? Sure. What we are generally predicating the concept on is if there is repayment capability then you’re going to stay in the house whether or not it happens to be upside down given market conditions. People are not just running out and turning in the keys to their homes because the value has fallen. So that’s why I would say FICO from a predicting PD standpoint is more important than the loan-to-value.

A follow-up as far as the home equity charge off outlook. There’s two things I think you talked about before that are really impacting that too is that we are seeing less of an impact from the brokered origination that was cut out two years ago. I think you had also talked about the better performances of the recent vintages and those current loss rates were less than half of what they were two and three years ago.

Right I think you mentioned hearing from peers or hearing from other institutions and clearly there has been a trend last quarter and certainly this quarter regarding material increases in home equity losses forecasted. I think we are different because we made some of the adjustments that banks are making today or very recently back in 2005 and 2006 and the broker channel is probably the best and most obvious indicator or example. We completely exited it in early 2007 but we began reducing our exposure to the broker channel back in 2005. If not explicitly stated, the underlying assumptions in some of these other banks’ announcements has been significant deterioration in broker channel performance.

I do agree and you got out earlier than most.

That’s probably the most visible example of why we think we’re a little different than the rest of the market. Clearly our numbers are up but our numbers are not up to the same extent or at the same ratios as some of these that we’re seeing announced recently.

Ex the dollar and charges you had this quarter, would you add a $0.35 run rate? I think by my math you could maybe add $0.03 or so that you get back in the first quarter from the reversal of accrued income I think on Franklin, if that’s accurate? What other adjustments would you make to that $0.38 level going forward that makes your guidance for ‘08 look reasonable?

Bob, I think the biggest difference there is just as we talked about before, the fourth quarter included 72 basis points of charge-offs and a build of about $37 million of the allowance and our guidance for 2008 based on the conservative review that Tom had talked about would be for 60 to 65 basis points in charge-offs and continued modest increases in the allowance. So that would be the primary reason for the difference between those.

Your next question comes from David Booth - ELP Partners.

Hi, I just spent the last few days looking at the Franklin loan restructuring. To be honest with you, my opinion, I haven’t seen accounting this misleading since Enron. My question regards the accounting treatment of the loan. This is a $1.8 billion loan that we’re contingently liable for along with the other lenders to a $7 million market cap company; we’re almost 45% of the portfolio, the $2 billion portfolio is in default as of second quarter and Franklin is saying that trends are getting worse. I don’t know how you guys can continue to call this a commercial loan and continue accrual on it when absent our forgiveness of $300 million of that loan, it looks to me like Franklin might be bankrupt right now. Substantially, economically, you have to think that if Huntington took possession of the collateral, how much of that portfolio would go to non-accrual versus the carrying value as you guys carry it as a commercial loan presently?

I’ll take a first crack at this and Tim can go ahead and step in with additional color here, but keep in mind that what we’re looking at as far as the collection of our loans that we have on our books is the cash flows are generated from the $2 billion of the underlying consumer mortgage loans that are outstanding. The total loans that we have on our books today are less than $1.2 billion. We think that the cash flows that are –

We’re specifically liable for $400 million additional, is that right? The other lenders have recourse to us?

No, no other recourse is owed from Huntington to the other lenders. No, that’s not correct.

So if Franklin fails those other lenders wouldn’t have recourse?

They would not have recourse against Huntington, no.

Okay, because I thought your 10-Q said something.

No, that does not exist and we’ll go back and check our Q and Ks we filed to make sure that’s not stated that way; that’s not our understanding.

I’m just trying to understand how you can call it a commercial loan when Franklin is a $7 million market cap company that they, in their recent filings, said that with the trends in the portfolio that it would pretty much wipe out their equity. How you can continue to call that a commercial loan and continue to accrue on it, I think in my opinion, the proper accounting would be to look at that as underlying collateral and say, how do we treat this if we brought this on balance sheet? Because substantially Huntington is the lender that’s keeping them afloat.

David, we have definitely looked at the underlying collateral and we believe that the loans is a loan to essentially a pool of loans, and we believe that the collateral and the cash flows that are generated from that collateral more than adequately support the loan balance that we have on our books as well as the loan balances that are carried by the participants in that relationship.

Can you talk about the underlying credit trends in the Franklin portfolio presently and then how it would be reflected if you brought it on balance sheet to Huntington? How much of it would go into non-accrual versus your treatment as a commercial loan presently?

David, we believe that we have an accruing loans that is well secured and we believe that we have perfectly accounted for that and have it reflected in our balance sheet. If you would like to talk about this further please feel free to give either Jay Gould or give me a call and we could talk about this more one-on-one if you’d like.

Your next questions comes from Heather Wolf - Merrill Lynch.

A quick question on the commercial portfolio. Given the view on the economic backdrop and given that unsecured commercial credit quality can be very dependent upon the underlying economy, why do you think the C&I loss rates are going to hold in ‘08?

What we are concerned about in C&I is anything in C&I that somehow would be dependent upon housing. So in building our loss estimates of C&I, we’ve certainly taken into consideration the direct impact the housing sector might have on it. But on the other hand, with the knowledge of our C&I book, which continues to perform very well, and the composition of the sectors within the C&I book, we decided, again from the relationship to the housing sector, we feel comfortable in maintaining the targeted estimates that we have. That’s the best that I could do to help you out.

Heather I was just going to add something. In your question you mentioned unsecured and we have really very little C&I unsecured so if you’re thinking about maybe shared national credit or some structure like that, that’s not what the Huntington portfolio looks like.

Tim, can you give us a sense for the typical rate of change or rate of credit migration on a C&I loan? How quickly do they usually move through your watch list and delinquency lists?

Heather, the answer to that really varies dramatically. Some hit the criticized world and then go relatively quickly to loss. Others hit the criticized world and stay there for a while as the company sorts out issues or performance stabilize before returning possibly to the past category. I’m not sure I could give you a general answer to that. Clearly, we have seen over the last few quarters, downward migration as reflected in our increased reserves.

Tim I think that’s particularly the case in commercial real estate as opposed to middle-market C&I, where you are subject to periodic updates with regard to appraisals, changing market conditions, thus in some cases triggering downgrades from past to substandard. We really don’t see that kind of precipitous decline generally speaking in the middle market C&I.

That’s exactly right, the significant migrations are the two-step downgrades, in the commercial real estate phenomenon and we’ve experienced that. The C&I book tends to be more one grade steps as they move but they have not moved with anywhere near the volume that we’ve seen in the commercial real estate side.

Just as a refresher, what were your peak C&I losses in the last cycle?

The last cycle in early 2007, I think 2001 or 2002 may have been the peak, and I can’t remember the number specifically. I can get back to you with that. I would say that those numbers were heavily influenced by the shared national credit portfolio that was on the books at the time. That simply doesn’t exist today and so we’ve materially changed what that C&I portfolio looks like. If you go back or when we get back to you we can give you some names that you can recognize along with the rates, so I don’t think that is a comparable comparison. It could be ex-ed again given the change in the portfolio.

Your next question comes from Andrea Jao - Lehman Brothers.

I just wanted to make sure I heard correctly. You sold $73 million, $74 million held for sale non-performer from Sky after the quarter ended?

No we sold that prior to quarter end. We also took an additional haircut on the remaining portfolio based on the sales price we received.

Okay, great so prior to quarter end.

That’s correct.

There are no further questions at this time.

Thank you to everybody for participating in our conference call. If you have follow-up questions, please give myself or Jack a call. Thank you again.