<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington D.C., 20549
FORM 11-K
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL
YEAR ENDED DECEMBER 31, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION
PERIOD FROM TO .
------------- ---------------
COMMISSION FILE NO. 0-2525
A. Full Title of the Plan and the address of the Plan, if different from
that of the issuer named below:
HUNTINGTON INVESTMENT AND TAX SAVINGS PLAN
B. Name of issuer of the securities held pursuant to the Plan and the
address of its principal executive office:
HUNTINGTON BANCSHARES INCORPORATED
HUNTINGTON CENTER
41 SOUTH HIGH STREET
COLUMBUS, OHIO 43287
<PAGE> 2
HUNTINGTON INVESTMENT AND TAX SAVINGS PLAN
------------------------------------------
REQUIRED INFORMATION
--------------------
Item 4. Financial Statements and Supplemental Schedules for the Plan.
The Huntington Investment and Tax Savings Plan (the "Plan") is subject to the
Employee Retirement Income Security Act of 1974 ("ERISA"). In lieu of the
requirements of Items 1-3 of this Form, the Plan is filing financial statements
and supplemental schedules prepared in accordance with the financial reporting
requirements of ERISA. The Plan financial statements and supplemental schedules
for the fiscal year ended December 31, 1998, are included as Exhibit 99.1 to
this report on Form 11-K and are incorporated herein by reference. The Plan
financial statements and supplemental schedules have been audited by Ernst &
Young LLP, Independent Auditors, and their report is included therein.
EXHIBITS
--------
23.1 Consent of Independent Auditors, Ernst & Young LLP
99.1 Financial statements and supplemental schedules of The Huntington
Investment and Tax Savings Plan for the fiscal year ended December 31,
1998, prepared in accordance with the financial reporting requirements
of ERISA.
SIGNATURES
----------
Pursuant to the requirements of the Securities Exchange Act of 1934, Huntington
Bancshares Incorporated, the Plan administrator, has duly caused this annual
report to be signed by the undersigned thereunto duly authorized.
HUNTINGTON INVESTMENT
AND TAX SAVINGS PLAN
Date: June 29, 1999 By: /s/ Leslie P. Ridout
--------------- ---------------------
Leslie P. Ridout
Executive Vice President
Huntington Bancshares Incorporated
2
<PAGE> 1
Exhibit 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in Post-effective Amendment No. 1
to the Registration Statement (Form S-8 No. 33-46327) pertaining to the
Huntington Investment and Tax Savings Plan of Huntington Bancshares Incorporated
and in the related Prospectus of our report dated June 29, 1999 with respect to
the financial statements and schedules of the Huntington Investment and Tax
Savings Plan included in this Annual Report (Form 11-K) for the year ended
December 31, 1998.
s/ Ernst & Young LLP
Columbus, Ohio
June 29, 1999
3
<PAGE> 1
Exhibit 99.1
HUNTINGTON INVESTMENT AND TAX SAVINGS PLAN
------------------------------------------
FOR THE YEAR ENDED DECEMBER 31, 1998
------------------------------------
INDEX
-----
<TABLE>
<CAPTION>
Page
----
<S> <C>
Audited Financial Statements
- ----------------------------
Report of Independent Auditors 5
Statements of Net Assets Available for Benefits 6
December 31, 1998 and 1997
Statements of Changes in Net Assets Available for Benefits For the Years 7
Ended December 31, 1998, 1997 and 1996
Notes to Financial Statements 8
Schedules
- ---------
Assets Held for Investment Purposes - Item 27(a) as of December 31, 1998 17
Reportable Transactions - Item 27(d) for the year ended December 31, 1998 18
</TABLE>
4
<PAGE> 2
Report of Independent Auditors
Huntington Investment and Tax Savings
Plan Committee
We have audited the accompanying statements of net assets available for benefits
of the Huntington Investment and Tax Savings Plan as of December 31, 1998 and
1997, and the related statements of changes in net assets available for benefits
for each of the three years in the period ended December 31, 1998. These
financial statements are the responsibility of the Plan's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Huntington
Investment and Tax Savings Plan at December 31, 1998 and 1997, and the changes
in its net assets available for benefits for each of the three years in the
period ended December 31, 1998, in conformity with generally accepted accounting
principles.
Our audits were performed for the purpose of forming an opinion on the financial
statements taken as a whole. The accompanying supplemental schedules of assets
held for investment purposes as of December 31, 1998, and reportable
transactions for the year then ended, are presented for purposes of complying
with the Department of Labor's Rules and Regulations for Reporting and
Disclosure under the Employee Retirement Income Security Act of 1974, and are
not a required part of the financial statements. The supplemental schedules have
been subjected to the auditing procedures applied in our audits of the financial
statements and, in our opinion, are fairly stated in all material respects in
relation to the financial statements taken as a whole.
s/ Ernst & Young LLP
Columbus, Ohio
June 29, 1999
5
<PAGE> 3
HUNTINGTON INVESTMENT AND TAX SAVINGS PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
<TABLE>
<CAPTION>
December 31,
1998 1997
------------ ------------
<S> <C> <C>
ASSETS
Investments, at market value:
Huntington Bancshares Incorporated
Common Stock (Cost: $143,550,760 in 1998, and
$130,274,025 in 1997) $328,677,822 $379,640,497
The Huntington National Bank sponsored
Common Trust Fund -- 2,341,818
Mutual Funds 36,100,609 --
------------ ------------
Total Investments 364,778,431 381,982,315
Contributions receivable
From participants 585,186 --
From Huntington Bancshares Incorporated 322,880 --
Participant notes receivable 584,630 --
Accrued dividends, interest receivable,
and other assets 2,201,648 2,120,482
Cash and cash equivalents 165,503 1,574,561
------------ ------------
TOTAL ASSETS 368,638,278 385,677,358
LIABILITIES
Investment purchases payable and other liabilities 405,512 1,658,801
------------ ------------
NET ASSETS AVAILABLE FOR BENEFITS $368,232,766 $384,018,557
============ ============
</TABLE>
See notes to financial statements.
6
<PAGE> 4
HUNTINGTON INVESTMENT AND TAX SAVINGS PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
<TABLE>
<CAPTION>
Years Ended December 31,
1998 1997 1996
------------- ------------- -------------
<S> <C> <C> <C>
ADDITIONS
- ---------
Investment income:
Cash dividends on
Huntington Bancshares
Incorporated Common Stock $ 9,909,536 $ 8,283,293 $ 7,730,005
Interest 164,371 27,074 25,939
------------- ------------- -------------
10,073,907 8,310,367 7,755,944
Contributions:
Employees 14,296,646 10,430,340 9,902,941
Employer 8,239,405 8,586,785 7,872,953
------------- ------------- -------------
22,536,051 19,017,125 17,775,894
Assets of merged plans 47,491,634 -- --
------------- ------------- -------------
Total Additions 80,101,592 27,327,492 25,531,838
DEDUCTIONS
- ----------
Benefit distributions and
other withdrawals 62,142,383 47,533,239 28,052,979
------------- ------------- -------------
Total Deductions 62,142,383 47,533,239 28,052,979
Net realized and unrealized
(depreciation) appreciation in market
value of investments (33,745,000) 132,179,182 46,623,096
------------- ------------- -------------
Net (decrease) increase (15,785,791) 111,973,435 44,101,955
Net assets available for
benefits at beginning of year 384,018,557 272,045,122 227,943,167
------------- ------------- -------------
Net assets available for
benefits at end of year $ 368,232,766 $ 384,018,557 $ 272,045,122
============= ============= =============
</TABLE>
See notes to financial statements.
7
<PAGE> 5
HUNTINGTON INVESTMENT AND TAX SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
December 31, 1998
Note 1 - Plan Description and Accounting Policies
- -------------------------------------------------
The financial statements of the Huntington Bancshares Investment and Tax Savings
Plan (the "Plan") are presented on the accrual basis and are prepared in
conformity with generally accepted accounting principles, which requires
management to make estimates and assumptions that affect amounts reported in the
financial statements. Actual results could differ from those estimates.
Description of the Plan
- -----------------------
The Plan, formerly the Huntington Stock Purchase and Tax Savings Plan and Trust,
was initially adopted by the Board of Directors of Huntington Bancshares
Incorporated ("Huntington") on September 29, 1977, to be effective January 1,
1978. On August 19, 1992, the Plan was amended and restated, effective January
1, 1987, to comply with the Internal Revenue Code of 1986, as amended. The Plan
was again restated October 13, 1994, with a general effective date of January 1,
1987, to incorporate provisions concerning merged plans. The Plan was again
amended and restated November 19, 1997, effective at April 1, 1998. The
following summary describes the provisions of the Plan in effect as of the Plan
year ending December 31, 1998.
Funding and Vesting
- -------------------
Eligible employees may enroll on the first day of the month following six months
of employment and attainment of age 21. Participants may elect to make pre-tax
matched contributions of up to 15% of their eligible compensation. Huntington
will make a matching contribution equal to 100% on the first 3% of participant
elective deferrals and 50% on the next 2% of participant elective deferrals.
Employee and employer contributions are fully vested at all times. Prior to
April 1, 1998, Plan assets were invested primarily in Huntington Bancshares
Incorporated Common Stock. Plan participants are now permitted to direct pre-tax
elective deferrals and employer matching contributions to any combination of ten
investment options, including Huntington Bancshares Incorporated Common Stock.
An active participant may change or suspend pre-tax elective deferrals pursuant
to the terms set forth in the Plan document.
Prior to the April 1, 1998 amendment, eligible employees of Huntington and its
participating affiliates could choose between a pre-tax, after-tax, or a
combined pre-tax and after-tax employee contribution. Participants could elect
to make pre-tax matched contributions of up to 6% of their eligible
compensation. Participants could also elect to make after-tax matched
contributions of up to 3% of their eligible compensation, provided the sum of
the participant's pre-tax matched and after-tax non-matched contributions
equaled at least 3% of their eligible compensation. A participant's combined
pre-tax and after-tax matched contributions could not exceed 6% of the
participant's eligible compensation. A participant who designated the maximum 6%
matched contribution could make voluntary "after-tax non-matched" contributions
to the Plan up to an additional 10% of eligible
8
<PAGE> 6
compensation. A participant who designated less than a 6% matched contribution
could make after-tax non-matched contributions to the Plan subject to the
following rules. If the pre-tax matched contributions of a participant were less
than 3% of eligible compensation, after-tax contributions were treated first as
after-tax non-matched contributions until the sum of the pre-tax matched
contributions and the after-tax non-matched contributions equaled 3% of eligible
compensation. Thereafter, after-tax contributions were treated as after-tax
matched contributions, up to the limits described above, and then as after-tax
non-matched contributions. Huntington made a matching contribution equal to 75%
of an employee's contribution up to 6% of eligible compensation provided that no
more than 3% of compensation was contributed on an after-tax basis. In addition,
Huntington could make additional matching contributions, up to 25% of pre-tax
and after-tax matched contributions, at the discretion of the Board of
Directors.
Administration
- --------------
The Plan administrator is Huntington Bancshares Incorporated. Administration of
the Plan has been delegated by the Plan administrator to a committee of
employees appointed by the Board of Directors of Huntington.
Employee and Employer contributions to participants' accounts in the Plan are
invested pursuant to the participants' investment direction elections on file at
the time the contributions are allocated to the participants' accounts. Plan
assets are held in mutual funds or Huntington Bancshares Incorporated Common
Stock by the trust division of The Huntington National Bank (the "Plan
Trustee"), a wholly-owned subsidiary of Huntington. The Plan Trustee purchases
and sells shares of these mutual funds or Huntington Bancshares Incorporated
Common Stock on the open market at market prices. Additionally, the Plan Trustee
may directly purchase from and sell to, Huntington at market prices shares of
Huntington Bancshares Incorporated Common Stock.
Trustee and most administrative fees are paid from the general assets of
Huntington. However, participants are charged a nominal amount for
administration of the Plan.
Distributions and Withdrawals
- -----------------------------
Distributions from the Plan are paid in cash. A participant may request that the
portion of his or her account that is invested in the Huntington Bancshares
Incorporated Common Stock Fund be distributed in shares of Huntington Bancshares
Incorporated Common Stock with cash paid in lieu of any fractional shares.
Distributions and withdrawals are reported at market value.
Participants are permitted to take distributions and withdrawals from their
accounts in the Plan under the circumstances set forth in the Plan document.
Generally, participants may request withdrawal of funds in their account
attributable to: (i) rollover contributions; (ii) after-tax contributions; and
(iii) pre-April 1, 1998 Employer contributions that have been in the
participants' accounts for at least 24 months.
9
<PAGE> 7
Employee pre-tax elective deferrals and post April 1, 1998, Employer matching
contributions are subject to special withdrawal rules and generally may not be
withdrawn from the Plan prior to a participant's death, disability, termination
of employment, or attainment of age 59 1/2. Certain distributions of Employee
pre-tax deferrals may be made, however, in the event a participant requests a
distribution due to financial hardship as defined by the Plan. Participants
should refer to the Summary Plan Description for a complete summary of the Plan
provisions.
Participants may withdraw up to 100% of their account balances in the Plan for
any reason after they have reached age 59 1/2.
Dividends and Interest Income
- -----------------------------
Dividends are recognized as of the record date. Interest is recorded on an
accrual basis when earned.
Investments
- -----------
Subsequent to April 1, 1998, the separate investment options offered by the Plan
are as follows:
Huntington Bancshares Incorporated Common Stock Fund: This fund is invested
primarily in Huntington Bancshares Incorporated Common Stock. A small percentage
of this fund (usually 1% or less) is invested in a money market fund to maintain
liquidity for Plan distributions and participant fund reallocations. Unit values
are assigned to participants.
Huntington Money Market Fund: This fund seeks to provide safety of principal and
interest, a reasonable rate of interest income, little or no fluctuation of
principal, and liquidity. Investments typically include short-term debt
securities, including commercial paper, certificates of deposit, bankers
acceptances and government securities.
Bond Fund of America: This fund seeks to provide as high a level of current
income as is consistent with the preservation of capital by investing primarily
in bonds. The fund invests substantially all of its assets in marketable
corporate debt securities, U.S. government securities, mortgage-related
securities, other asset-backed securities and cash or money market instruments.
Normally, at least 65% of the fund assets will be invested in bonds.
Vanguard Wellington Fund: This fund seeks to conserve capital and to provide
moderate long-term growth and moderate income by investing in stocks, bonds and
money market instruments. The fund invests 60% to 70% of its assets in
dividend-paying stocks of large and medium sized companies. The remaining 30% to
40% of assets are invested in high-quality longer-term corporate bonds, with
some investment in Treasury, government agency and mortgage backed bonds.
Huntington Income-Equity Trust Fund: This fund seeks to achieve current income
and moderate appreciation of both capital and income by investing in
income-producing securities, such as stocks of companies having the potential to
pay attractive dividends.
10
<PAGE> 8
Vanguard Index 500 Fund: This fund seeks to mirror, as closely as possible, the
performance of the Standard and Poor's 500 Composite Stock Price Index, which
emphasizes stocks of large U.S. companies. Accordingly, the fund invests in
stocks which are included in the Standard and Poor's 500 Composite Stock Price
Index.
MFS Massachusetts Investors Fund: This fund seeks to provide current income and
long-term growth of capital and income. Investments include stocks and other
equity securities of companies emphasizing above average growth potential.
Neuberger & Berman Partners Trust Fund: This fund is designed to achieve
long-term capital growth by investing in common stocks of established medium to
large capitalization companies.
Franklin Small Cap Growth I Fund: This fund seeks long-term growth of capital by
investing in common stocks of smaller capitalization companies.
EuroPacific Growth Fund: This fund seeks long-term growth of capital by
investing in securities of companies domiciled outside of the United States,
usually located in Europe and the Pacific Basin. However, the fund may invest in
securities of developing countries as well.
Participant Notes Receivable
- ----------------------------
In conjunction with the merger of First Michigan Bank Corporation into
Huntington, the First Michigan Bank Corporation Cash Option Plan (the "First
Michigan Plan") merged into the Plan effective as of April 1, 1998. The loan
fund represents the transfer of the outstanding participant loan balances in the
First Michigan Plan to the Plan. While the Plan does not allow participants to
take loans against their account balances, participants with outstanding loans
in the First Michigan Plan at the time of its merger into the Plan are permitted
to repay outstanding loans. The First Michigan Plan was amended in 1997 to
discontinue participant loans. Therefore, no loans were made from the First
Michigan Plan during 1998. Each loan, by its terms, must be repaid within 5
years, unless it is a loan for a participant's principal residence. The loans
bear interest at a market rate fixed at the date of origination. Principal and
interest is paid by participants through payroll deductions authorized by the
participant currently employed by Huntington. Individuals terminated from
employment repay principal and interest on an installment basis.
11
<PAGE> 9
Plan Funds
- ----------
The following summarizes balances of the Plan's funds at December 31, 1998:
<TABLE>
<CAPTION>
MUTUAL FUNDS
HUNTINGTON ------------------------------
BANCSHARES
INCORPORATED HUNTINGTON
COMMON MONEY BOND FUND
STOCK FUND* MARKET* OF AMERICA
------------------ -------------- ---------------
<S> <C> <C> <C>
ASSETS
Investments, at market value:
Huntington Bancshares Incorporated
Common Stock* $ 328,677,822
Mutual Funds $ 4,664,322 $ 3,195,599
------------------ ------------- ---------------
Total Investments 328,677,822 4,664,322 3,195,599
Contributions Receivable
From participants 362,363 10,823 11,878
From Huntington Bancshares 214,368 5,410 6,050
Participant Notes Receivable --- --- ---
Accrued dividends, interest receivable
and other assets 2,182,381 19,267 ---
Cash and cash equivalents 162,751 --- ---
------------------ ------------- ---------------
TOTAL ASSETS 331,599,685 4,699,822 3,213,527
LIABILITIES
Investment purchases payable and other liabilities 17,267 55,565 17,941
------------------ ------------- ---------------
NET ASSETS AVAILABLE FOR BENEFITS $ 331,582,418 $ 4,644,257 $ 3,195,586
================== =============== ===============
MUTUAL FUNDS
----------------------------------------------------------------
HUNTINGTON
INCOME- MFS
VANGUARD EQUITY VANGUARD MASSACHUSETTS
WELLINGTON TRUST* INDEX 500 INVESTORS
-------------- ------------ ------------------ --------------
<S> <C> <C> <C> <C>
ASSETS
Investments, at market value:
Huntington Bancshares Incorporated
Common Stock*
Mutual Funds $ 5,252,872 $ 939,604 $ 10,125,248 $ 6,371,795
-------------- ------------ ------------------ ---------------
Total Investments 5,252,872 939,604 10,125,248 6,371,795
Contributions Receivable
From participants 32,300 8,334 70,971 33,239
From Huntington Bancshares 16,587 4,360 33,625 15,985
Participant Notes Receivable --- --- --- ---
Accrued dividends, interest receivable
and other assets --- --- --- ---
Cash and cash equivalents 2,734 --- --- 1
-------------- ------------ ------------------ ---------------
TOTAL ASSETS 5,304,493 952,298 10,229,844 6,421,020
LIABILITIES
Investment purchases payable and other liabilities 48,724 12,428 110,626 51,143
-------------- ------------ ------------------ ---------------
NET ASSETS AVAILABLE FOR BENEFITS $ 5,255,769 $ 939,870 $ 10,119,218 $ 6,369,877
============== ============ ================== ===============
MUTUAL FUNDS
--------------------------------------------------
NEUBERGER & FRANKLIN
BERMAN SMALL CAP EUROPACIFIC
TRUST GROWTH I GROWTH
-------------- ---------------- --------------
<S> <C> <C> <C>
ASSETS
Investments, at market value:
Huntington Bancshares Incorporated
Common Stock*
Mutual Funds $ 3,528,675 $ 1,213,091 $ 809,403
-------------- ---------------- ---------------
Total Investments 3,528,675 1,213,091 809,403
Contributions Receivable
From participants 26,077 20,633 8,568
From Huntington Bancshares 12,945 9,585 3,965
Participant Notes Receivable --- --- ---
Accrued dividends, interest receivable
and other assets --- --- ---
Cash and cash equivalents --- --- ---
-------------- ---------------- ---------------
TOTAL ASSETS 3,567,697 1,243,309 821,936
LIABILITIES
Investment purchases payable and other liabilities 42,368 33,605 15,845
-------------- ---------------- ---------------
NET ASSETS AVAILABLE FOR BENEFITS $ 3,525,329 $ 1,209,704 $ 806,091
============== ================ ===============
TOTAL HUNTINGTON
LOAN INVESTMENT AND
FUND TAX SAVINGS PLAN
------------ ------------------
<S> <C> <C>
ASSETS
Investments, at market value:
Huntington Bancshares Incorporated
Common Stock* $ 328,677,822
Mutual Funds 36,100,609
----------------
Total Investments 364,778,431
Contributions Receivable
From participants 585,186
From Huntington Bancshares 322,880
Participant Notes Receivable $ 584,630 584,630
Accrued dividends, interest receivable
and other assets --- 2,201,648
Cash and cash equivalents 17 165,503
------------ ----------------
TOTAL ASSETS 584,647 368,638,278
LIABILITIES
Investment purchases payable and other liabilities --- 405,512
------------ ----------------
NET ASSETS AVAILABLE FOR BENEFITS $ 584,647 $ 368,232,766
============ ================
</TABLE>
* - Indicates party-in-interest to the Plan.
12
<PAGE> 10
Statements Of Changes In Net Assets Available For Benefits
- ----------------------------------------------------------
The following summarizes the changes in net assets available for benefits by
fund for the year ended December 31, 1998:
<TABLE>
<CAPTION>
MUTUAL FUNDS
HUNTINGTON ------------------------------------
BANCSHARES
HUNTINGTON INCORPORATED HUNTINGTON
EMPLOYEE STOCK COMMON MONEY BOND FUND
PURCHASE PLAN* STOCK FUND* MARKET* OF AMERICA
------------------- ------------------ ---------------- ---------------
<S> <C> <C> <C> <C>
ADDITIONS
Investment income:
Cash dividends $ 2,064,678 $ 6,624,254 $ --- $ 152,282
Interest 12,318 33,449 118,583 ---
------------------- ------------------ ---------------- ---------------
2,076,996 6,657,703 118,583 152,282
Contributions:
Employees 3,212,787 6,917,899 253,413 331,400
Employer 2,603,698 3,932,768 66,745 93,189
------------------- ------------------ ---------------- ---------------
5,816,485 10,850,667 320,158 424,589
Assets of merged plans 109,968 46,591,327 51,636 ---
------------------- ------------------ ---------------- ---------------
Total Additions 8,003,449 64,099,697 490,377 576,871
DEDUCTIONS
Benefit distributions and other withdrawals 23,504,702 33,706,959 1,071,350 436,917
------------------- ------------------ ---------------- ---------------
Total Deductions 23,504,702 33,706,959 1,071,350 436,917
Net realized and unrealized
appreciation (depreciation) in
market value of investments 9,467,233 (43,458,713) --- (90,975)
Interfund Transfers (377,984,537) 344,648,393 5,225,230 3,146,607
------------------- ------------------ ---------------- ---------------
Net (decrease) increase (384,018,557) 331,582,418 4,644,257 3,195,586
Net assets available for benefits
at beginning of year 384,018,557 --- --- ---
------------------- ------------------ ---------------- ---------------
Net assets available for benefits
at end of year $ --- $ 331,582,418 $ 4,644,257 $ 3,195,586
================== =================== ================= ================
MUTUAL FUNDS
--------------------------------------------------------------------------
HUNTINGTON
INCOME- MFS
VANGUARD EQUITY VANGUARD MASSACHUSETTS
WELLINGTON TRUST* INDEX 500 INVESTORS
-------------- ------------ ----------------- ----------------
<S> <C> <C> <C> <C>
ADDITIONS
Investment income:
Cash dividends $ 517,452 $ 26,934 $ 106,313 $ 279,969
Interest --- --- --- 2
-------------- ------------ ----------------- ----------------
517,452 26,934 106,313 279,971
Contributions:
Employees 539,576 212,002 1,196,250 537,215
Employer 261,400 61,104 517,051 254,309
-------------- ------------ ----------------- ----------------
800,976 273,106 1,713,301 791,524
Assets of merged plans --- --- --- ---
-------------- ------------ ----------------- ----------------
Total Additions 1,318,428 300,040 1,819,614 1,071,495
DEDUCTIONS
Benefit distributions and other withdrawals 402,746 64,034 1,371,174 894,882
-------------- ------------ ----------------- ----------------
Total Deductions 402,746 64,034 1,371,174 894,882
Net realized and unrealized
appreciation (depreciation) in
market value of investments (368,928) 27,312 879,073 103,362
Interfund Transfers 4,709,015 676,552 8,791,705 6,089,902
-------------- ------------ ----------------- ----------------
Net (decrease) increase 5,255,769 939,870 10,119,218 6,369,877
Net assets available for benefits
at beginning of year --- --- --- ---
-------------- ------------ ----------------- ----------------
Net assets available for benefits
at end of year $ 5,255,769 $ 939,870 $ 10,119,218 $ 6,369,877
=============== ============= ================ ===============
MUTUAL FUNDS
--------------------------------------------------
NEUBERGER & FRANKLIN TOTAL HUNTINGTON
BERMAN SMALL CAP EUROPACIFIC LOAN INVESTMENT AND
TRUST GROWTH I GROWTH FUND TAX SAVINGS PLAN
--------------- -------------- ------------ -------------- -----------------
<S> <C> <C> <C> <C> <C>
ADDITIONS
Investment income:
Cash dividends $ 86,503 $ 16,398 $ 34,753 $ 9,909,536
Interest --- --- --- $ 19 164,371
--------------- -------------- ------------ -------------- ---------------
86,503 16,398 34,753 19 10,073,907
Contributions:
Employees 512,697 377,530 205,877 --- 14,296,646
Employer 229,981 151,521 67,639 --- 8,239,405
--------------- -------------- ------------ -------------- ---------------
742,678 529,051 273,516 --- 22,536,051
Assets of merged plans --- --- --- 738,703 47,491,634
--------------- -------------- ------------ -------------- ---------------
Total Additions 829,181 545,449 308,269 738,722 80,101,592
DEDUCTIONS
Benefit distributions and other withdrawals 628,819 34,149 26,651 --- 62,142,383
--------------- -------------- ------------ -------------- ---------------
Total Deductions 628,819 34,149 26,651 --- 62,142,383
Net realized and unrealized
appreciation (depreciation) in
market value of investments (275,997) (17,826) (9,541) --- (33,745,000)
Interfund Transfers 3,600,964 716,230 534,014 (154,075) ---
--------------- -------------- ------------ -------------- ---------------
Net (decrease) increase 3,525,329 1,209,704 806,091 584,647 (15,785,791)
Net assets available for benefits
at beginning of year --- --- --- --- 384,018,557
--------------- -------------- ------------ -------------- ---------------
Net assets available for benefits
at end of year $ 3,525,329 $ 1,209,704 $ 806,091 $ 584,647 $ 368,232,766
================ =============== ============= =============== ===============
</TABLE>
* - Indicates party-in-interest to the Plan.
13
<PAGE> 11
Note 2 - Cash and Cash Equivalents
- ----------------------------------
Cash and cash equivalents primarily represent funds temporarily invested in the
Huntington Money Market Fund to provide liquidity for fund reallocations and
distributions from the Huntington Bancshares Incorporated Common Stock Fund.
Note 3 - Federal Income Taxes
- -----------------------------
The Plan has received a determination letter from the Internal Revenue Service
dated June 13, 1995, stating that the Plan is qualified under Section 401(a) of
the Internal Revenue Code (the "Code") and, therefore, the related trust is
exempt from taxation. The Plan is required to operate in conformity with the
Code to maintain its qualification. The Plan Administrator believes the Plan is
being operated in compliance with the applicable requirements of the Code and,
therefore, believes that the Plan is qualified and the related trust is tax
exempt.
Note 4 - Net Realized and Unrealized (Depreciation) Appreciation of Investments
- -------------------------------------------------------------------------------
During each of the three years in the period ended December 31, 1998, the Plan's
investments, including investments bought, sold, as well as held during the
year, (depreciated)/appreciated in market value as follows:
<TABLE>
<CAPTION>
Net
(Depreciation)
Appreciation Market Value
in Market Value at End
During Year of Year
------------- -------------
<S> <C> <C>
Year ended December 31, 1998
- ----------------------------
Huntington Bancshares Incorporated
Common Stock $ (33,991,480) $ 328,677,822
Huntington Money Market Fund -- 4,827,073
Bond Fund of America (90,975) 3,195,599
Vanguard Wellington Fund (368,928) 5,252,872
Huntington Income-Equity Trust Fund 27,312 939,604
Vanguard Index 500 Fund 879,073 10,125,248
MFS Massachusetts Investors Fund 103,362 6,371,795
Neuberger & Berman Trust Fund (275,997) 3,528,675
Franklin Small Cap Growth I Fund (17,826) 1,213,091
EuroPacific Growth Fund (9,541) 809,403
------------- -------------
$ (33,745,000) $ 364,941,182
============= =============
</TABLE>
14
<PAGE> 12
<TABLE>
<CAPTION>
Net
Appreciation Market Value
in Market Value at End
During Year of Year
------------ ------------
<S> <C> <C>
Year ended December 31, 1997
- ----------------------------
Huntington Bancshares Incorporated
Common Stock $131,773,663 $379,640,497
The Huntington National Bank sponsored
Common Trust Fund 405,519 2,341,818
------------ ------------
$132,179,182 $381,982,315
============ ============
</TABLE>
<TABLE>
<CAPTION>
Net
Appreciation Market Value
in Market Value at End
During Year of Year
------------ ------------
<S> <C> <C>
Year ended December 31, 1996
- ----------------------------
Huntington Bancshares Incorporated
Common Stock $ 46,345,414 $266,307,490
The Huntington National Bank sponsored
Common Trust Fund 277,682 2,395,425
------------ ------------
$ 46,623,096 $268,702,915
============ ============
</TABLE>
Note 5 - Plan Mergers
- ---------------------
During 1998, approximately $47.3 million was transferred to the Plan as a result
of the previous acquisition of First Michigan Bank Corporation, Holland,
Michigan. In addition, approximately $.2 million was transferred to the Plan as
a result of the previous acquisition of the Bank of Winter Park, Winter Park,
Florida.
Note 6 - Terminated Participants
- --------------------------------
Included in net assets available for benefits are amounts allocated to
individuals who have withdrawn from the Plan. Amounts allocated to these
participants were $1,620,153 at December 31, 1998. There were no amounts
allocated at December 31, 1997.
15
<PAGE> 13
Note 7 - Party-In-Interest Transactions
- ---------------------------------------
The Plan held the following party-in-interest investments (at fair value) at
December 31:
<TABLE>
<CAPTION>
1998 1997
------------ ------------
<S> <C> <C>
Huntington Bancshares Incorporated
Common Stock $328,677,822 $379,640,497
The Huntington National Bank sponsored
Common Trust Fund -- 2,341,818
Huntington Money Market Fund 4,827,073 1,568,691
Huntington Income-Equity Trust Fund 939,604 --
</TABLE>
Costs and expenses incurred in administering the Plan paid by Huntington,
including brokerage commissions and fees in connection with each purchase of
securities, totaled $894,357, $735,545, and $540,450 for 1998, 1997, and 1996,
respectively.
Note 8 - Year 2000 (Unaudited)
- ------------------------------
The Year 2000 problem is the result of many existing computer programs using
only the last two-digits, as opposed to four digits, to indicate the year. Such
computer systems may be unable to recognize a year that begins with "20" instead
of "19". If not corrected, many computer programs could cause systems failures
or other computer errors, leading to possible disruptions in operations or
creation of erroneous results.
Huntington, in an enterprise-wide effort, is taking steps to ensure that its
internal systems are secure from such failure and that its current products will
perform. Huntington's Year 2000 Plan addresses all systems, software, hardware,
and infrastructure components, including those of the Plan. Huntington, on
behalf of the Plan, prioritized the various systems that could be affected by
the Year 2000, including those maintained by the Plan's third party vendors,
suppliers, and service providers. Efforts to ensure compliance of core systems
deemed critical have been substantially completed. In addition, Huntington is
presently working with the Plan's business partners and suppliers to ensure the
potential problem is adequately addressed. None of the costs associated with
compliance efforts have been or will be borne by the Plan.
The Year 2000 problem is unique in that it has never previously occurred; thus,
it is not possible to completely foresee or quantify the overall or any specific
financial or operational impacts to Huntington, the Plan, or to third parties
which provide critical services to the Plan.
16
<PAGE> 14
Supplemental Schedule 27(a)
HUNTINGTON INVESTMENT AND TAX SAVINGS PLAN
ASSETS HELD FOR INVESTMENT PURPOSES
December 31, 1998
<TABLE>
<CAPTION>
Current
Issuer Description of Investment Cost Value
- ---------------------------------- ------------------------- ------------ ------------
<S> <C> <C> <C>
Huntington Bancshares Incorporated
Common Stock* 143,713,511 shares $143,550,760 $328,677,822
Huntington Money Market Fund* 4,827,073 units 4,827,073 4,827,073
Bond Fund of America Fund 234,797 units 3,268,933 3,195,599
Vanguard Wellington Fund 178,973 units 5,608,811 5,252,872
Huntington Income-Equity
Trust Fund* 23,001 units 911,266 939,604
Vanguard Index 500 Fund 88,856 units 9,219,851 10,125,248
MFS Massachusetts Investors Fund 314,655 units 6,240,505 6,371,795
Neuberger & Berman Trust Fund 195,277 units 3,721,590 3,528,675
Franklin Small Cap Growth I Fund 53,746 units 1,213,095 1,213,091
EuroPacific Growth Fund 28,499 units 813,362 809,403
Participant loans 6.00% to 10.00% 0 584,630
</TABLE>
* Indicates party-in-interest to the Plan.
17
<PAGE> 15
Supplemental Schedule 27(d)
HUNTINGTON INVESTMENT AND TAX SAVINGS PLAN
SCHEDULE OF REPORTABLE TRANSACTIONS
YEAR ENDED DECEMBER 31, 1998
<TABLE>
<CAPTION>
Purchases Sales
-------------------------- -----------
Number of Number of
Identity of Party Involved Description of Asset Transactions Dollars Transactions
- -------------------------------------- ------------------------------- ------------ ------- ------------
Catergory (iii) - Series of transactions greater than 5% of Plan assets.
- ------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Huntington Bancshares Incorporated Huntington Bancshares Incorporated 41 7,640,323 28
BHC Securities Common Stock
Dean Witter
Jefferies & Co.
McDonald & Company Securities
Ohio Company
Huntington Bancshares Incorporated Huntington Money Market Fund 132 13,621,983 67
Sales
---------------------------
Gain
Identity of Party Involved Description of Asset Dollars (Loss)
- -------------------------------------- ------------------------------- ---------- ----------
Catergory (iii) - Series of transactions greater than 5% of Plan assets.
- ------------------------------------------------------------------------
Huntington Bancshares Incorporated Huntington Bancshares Incorporated 12,825,887 7,949,566
BHC Securities Common Stock
Dean Witter
Jefferies & Co.
McDonald & Company Securities
Ohio Company
Huntington Bancshares Incorporated Huntington Money Market Fund 10,526,352 n/a
</TABLE>
There were no category (i), (ii), or (iv) reportable transactions during the
year ended December 31, 1998.
18
