<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington D.C., 20549
FORM 11-K
[X] ANNUAL REPORT PURSUANT TO SECTION 15(D) OF THE
SECURITIES AND EXCHANGE ACT OF 1934 FOR THE
FISCAL YEAR ENDED DECEMBER 31, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(D) OF THE
SECURITIES AND EXCHANGE ACT OF 1934
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 Supplemental Stock Purchase and Tax Savings Plan and Trust
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
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HUNTINGTON SUPPLEMENTAL STOCK PURCHASE AND
TAX SAVINGS PLAN AND TRUST
INDEX TO FINANCIAL STATEMENTS
-----------------------------
<TABLE>
<CAPTION>
Page
----
<S> <C>
Report of Independent Auditors 3
Statements of Financial Condition -
December 31, 1998 and 1997 4
Statements of Income and Changes in Plan Equity -
For the years ended December 31, 1998, 1997, and 1996 5
Notes to Financial Statements 6
Exhibit
Consent of Independent Auditors 11
</TABLE>
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Report of Independent Auditors
Board of Directors
Huntington Bancshares Incorporated
We have audited the accompanying statements of financial condition of the
Huntington Supplemental Stock Purchase and Tax Savings Plan and Trust (the
Plan) as of December 31, 1998 and 1997, and the related statements of income
and changes in plan equity 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 financial position of the Supplemental Stock
Purchase and Tax Savings Plan and Trust at December 31, 1998 and 1997, and the
results of its operations and the changes in its plan equity for each of the
three years in the period ended December 31, 1998, in conformity with
generally accepted accounting principles.
/s/ Ernst & Young LLP
Columbus, Ohio
March 30, 1999
3
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HUNTINGTON SUPPLEMENTAL STOCK PURCHASE AND
TAX SAVINGS PLAN AND TRUST
STATEMENTS OF FINANCIAL CONDITION
<TABLE>
<CAPTION>
December 31,
1998 1997
---------- ----------
<S> <C> <C>
ASSETS
- ------
Investments, at market value:
Huntington Bancshares Incorporated
Common Stock: 79,453 shares in 1998
and 113,403 shares in 1997;
Cost: $1,096,404 in 1998 and $1,590,957
in 1997 (Note 4) $2,388,516 $4,082,581
Contributions, income and other receivables 143,492 22,368
Cash and cash equivalents (Note 2) 955 19,804
---------- ----------
TOTAL ASSETS $2,532,963 $4,124,753
========== ==========
LIABILITIES AND PLAN EQUITY
- ---------------------------
Stock purchase payable and other liabilities $ 122,952 $ 42,121
Plan Equity
2,410,001 4,082,632
---------- ----------
TOTAL LIABILITIES AND PLAN EQUITY $2,532,963 $4,124,753
========== ==========
</TABLE>
See notes to financial statements.
4
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HUNTINGTON SUPPLEMENTAL STOCK PURCHASE AND
TAX SAVINGS PLAN AND TRUST
STATEMENTS OF INCOME AND CHANGES IN PLAN EQUITY
<TABLE>
<CAPTION>
Year ended December 31,
1998 1997 1996
----------- ----------- -----------
<S> <C> <C> <C>
Investment income:
Cash dividends on Huntington Bancshares
Incorporated Common Stock $ 75,784 $ 83,418 $ 72,117
Interest 1,330 260 163
----------- ----------- -----------
77,114 83,678 72,280
Realized gains on investments (Note 4) 766,692 43,407 66,836
Unrealized (depreciation) appreciation of
investments (Note 4) (1,199,512) 1,270,631 375,420
Contributions:
Employees 169,405 117,192 123,143
Employer 71,890 87,895 92,358
----------- ----------- -----------
241,295 205,087 215,501
Distributions (1,558,220) (88,839) (159,936)
----------- ----------- -----------
Net (decrease) increase in Plan Equity (1,672,631) 1,513,964 570,101
Plan Equity - Beginning of Period 4,082,632 2,568,668 1,998,567
----------- ----------- -----------
Plan Equity - End of Period $ 2,410,001 $ 4,082,632 $ 2,568,668
=========== =========== ===========
</TABLE>
See notes to financial statements.
5
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HUNTINGTON SUPPLEMENTAL STOCK PURCHASE AND
TAX SAVINGS PLAN AND TRUST
NOTES TO FINANCIAL STATEMENTS
December 31, 1998
Note 1 - Summary of Accounting Policies
---------------------------------------
Description of the Plan
-----------------------
Huntington Bancshares Incorporated ("Huntington") adopted the Huntington
Supplemental Stock Purchase and Tax Savings Plan and Trust (the "Plan")
effective March 1, 1989. Huntington subsequently amended the Plan on May 24,
1989, February 9, 1990, and November 19, 1997. The following summary
describes the Plan as amended and restated.
The Plan is in the form of a trust agreement between Huntington and the trust
division of its wholly-owned subsidiary, The Huntington National Bank (the
"Trustee"). The purpose of the Plan is to provide a supplemental savings
program for eligible employees of Huntington and its related companies who
are unable to make contributions to the Huntington Investment and Tax Savings
Plan (the "Qualified Plan") because the employees have made the maximum
elective deferrals under Internal Revenue Code section 402(g) or the maximum
elective contributions under the terms of the Qualified Plan. Prior to
January 1, 1998, eligible employees are defined as individuals who are unable
to defer compensation by Internal Revenue Code sections 402(g) or 401(a)(17),
respectively. Effective January 1, 1998, eligible employees are defined as
individuals who are determined by the Compensation and Stock Option Committee
of the Huntington Board of Directors to be members of a select group of
management or highly compensated employees and who are designated by such
committee to be Eligible Employees under the Plan.
Each eligible employee may elect to have all or any portion of the pre-tax
contributions that he or she elected to defer under the Qualified Plan, but
which cannot be allocated to his or her pre-tax account under such plan
because of the annual limitation on deferrals imposed by applicable tax laws,
allocated to his or her account under the Plan.
Concurrently with the payment of the participant's supplemental pre-tax
contributions, his or her employer shall make a matching contribution to the
Plan on behalf of the participant. Before April 1, 1998, the matching
contributions were equal to 75% of the participant's supplemental pre-tax
contributions to the Plan. Effective April 1, 1998, the matching
contributions were equal to 100% of the participant's supplemental pre-tax
contributions to the Plan up to the first 3% of the participant's
compensation and 50% of the participant's supplemental pre-tax contributions
to the Plan on the 4th and 5th percent of the participant's compensation.
Matching contributions may be made in the form of cash or Huntington
Bancshares Incorporated common stock ("Common Stock"), or a combination
thereof.
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Amounts held in the trust fund are invested by the Trustee in Common Stock.
The Trustee maintains a separate account for each participant, which reflects
such participant's share of assets held in the Plan. Employee and employer
contributions are fully vested at all times.
Distributions are made in a lump sum upon death or termination of employment
with Huntington or its affiliates.
The Plan is administered by an administrative committee (the "Committee"),
which is appointed annually by Huntington's Board of Directors (the "Board").
The Committee members serve until they resign and their successors are
appointed or until they are removed with or without cause by the Board. None
of the members of the Committee receives compensation from the assets of the
Plan.
The Board may amend or terminate the Plan at any time provided that no such
amendment or termination will affect the rights of participants to amounts
previously credited to their accounts.
Investments
-----------
The Trustee invests contributed amounts primarily in Common Stock. These
shares are carried at market value as determined by quoted prices reported by
The NASDAQ Stock Market. The cost of specific investments sold is used to
compute realized gains and losses.
Distributions
-------------
Distributions are made from the Plan in shares of Common Stock and are
reported at market value.
Income and Expenses
-------------------
Cash dividends are recognized as of the record date. All costs and expenses
incurred in administering the Plan, including brokerage commissions and fees
in connection with the purchase of securities, are paid by Huntington and
participating affiliates. Expenses incurred in administering the Plan totaled
$23,800, $10,954, and $8,083, for 1998, 1997, and 1996, respectively.
Note 2 - Cash Equivalents
-------------------------
The Plan temporarily invests cash and cash equivalents in The Huntington
National Bank sponsored Huntington Funds.
Note 3 - Federal Income Taxes
-----------------------------
The Plan is established as an unfunded deferred compensation plan under the
Internal Revenue Code. Accordingly, a participant will not incur federal
income tax liability when compensation is deferred pursuant to the Plan, when
matching contributions are made to the Plan, when Common
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Stock is purchased for a participant's account, or when dividends are paid to
a participant's account on such shares. Rather, a participant will incur
federal income tax liability for such contributions and income only when
distributions are made to a participant.
The Plan is not qualified under Section 401(a) of the Internal Revenue Code.
Huntington is subject to federal income taxes arising from taxable income of
the Plan. Accordingly, no provision for federal income taxes is included in
the financial statements of the Plan.
Note 4 - Net Realized and Unrealized Appreciation of Investments
----------------------------------------------------------------
The following tables summarize the net realized and unrealized appreciation of
the Plan's investments in Common Stock for each of the three years in the
period ended December 31, 1998:
<TABLE>
<CAPTION>
1998 1997 1996
----------- ----------- -----------
<S> <C> <C> <C>
Aggregate proceeds $ 1,558,220 $ 88,839 $ 159,936
Aggregate cost 791,528 45,432 93,100
----------- ----------- -----------
Net realized gains $ 766,692 $ 43,407 $ 66,836
=========== =========== ===========
</TABLE>
<TABLE>
<CAPTION>
1998 1997 1996
----------- ----------- -----------
<S> <C> <C> <C>
Market value $ 2,388,516 $ 4,082,581 $ 2,549,615
Cost 1,096,404 1,590,957 1,328,622
----------- ----------- -----------
Accumulated unrealized appreciation $ 1,292,112 $ 2,491,624 $ 1,220,993
=========== =========== ===========
Change in accumulated unrealized
appreciation between years $(1,199,512) $ 1,270,631 $ 375,420
=========== =========== ===========
</TABLE>
Note 5 - 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
to fail 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
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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. Huntington has,
however, implemented several proactive processes to identify and mitigate
risk involving systems and processes over which it has control. Huntington's
senior management believes successful modifications to existing systems and
conversions to new systems will substantially reduce the risk of Year 2000
disruption to the systems or processes of Huntington and the Plan.
9
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SIGNATURES
----------
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Committee of the Huntington Supplemental Stock Purchase and Tax Savings Plan
and Trust has duly caused this annual report to be signed by the undersigned
thereunto duly authorized.
HUNTINGTON SUPPLEMENTAL STOCK PURCHASE AND
TAX SAVINGS PLAN AND TRUST
Date: March 30, 1999 By: /s/ Leslie P. Ridout
------------------------ ---------------------------------------
Leslie P. Ridout, Jr.
Executive Vice President
Huntington Bancshares Incorporated
10
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Exhibit to the Annual Report
(Form 11-K) of the
Huntington Supplemental
Stock Purchase and Tax
Savings Plan and Trust
for the year ended
December 31, 1998
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. 33-44208) pertaining to the
Huntington Supplemental Stock Purchase and Tax Savings Plan and Trust and in the
related Prospectus of our report dated March 30, 1999, with respect to the
financial statements of the Huntington Supplemental Stock Purchase and Tax
Savings Plan and Trust included in this Annual Report (Form 11-K) for the year
ended December 31, 1998.
/s/ Ernst & Young LLP
Columbus, Ohio
March 30, 1999
11
