UNIZ Unizan Financial (MM)

Unizan Financial Corp. Reports First Quarter 2004 Financial Results CANTON, Ohio, April 26 /PRNewswire-FirstCall/ -- Unizan Financial Corp. , today announced its first quarter financial results. Net income for the first quarter of 2004 was $2.4 million, or $0.11 per diluted share. This compares with net income of $7.0 million, or $0.32 per diluted share, for the first quarter of 2003, and net income of $2.6 million, or $0.12 per diluted share for the fourth quarter of 2003. During the period, Unizan recognized an expense of $3.6 million pre-tax, or $2.4 million after-tax, in relation to the exercise of certain stock options and an additional expense of $1.2 million pre-tax, or $944 thousand after-tax, for merger-related professional fees. Net income for the first quarter of 2004, excluding the option charge and merger-related expenses, was $5.7 million, or $0.26 per diluted share. On January 27, 2004, Huntington Bancshares Incorporated (NASDAQ:HBAN) and Canton, Ohio-based Unizan Financial Corp. announced the signing of a definitive agreement to merge the two organizations. Under the terms of the agreement, Unizan shareholders will receive 1.1424 shares of Huntington common stock, on a tax-free basis, for each share of Unizan. The merger is expected to close promptly following the end of the second quarter, pending customary regulatory approvals, as well as Unizan shareholder approval. The shareholder meeting is scheduled to take place on Tuesday, May 25, 2004. "Unizan Financial Corp.'s results were slightly above the expectations we set for the first quarter of 2004," said Roger Mann, Unizan Financial Corp.'s president and chief executive officer. "I am especially pleased as our net charge-offs remained relatively low." Net interest income -- Net interest income was $18.8 million for the three months ended March 31, 2004, up 1.0% from the previous quarter and down 11.7% from the same quarter last year. The net interest margin was 3.08% for the first quarter of 2004 compared to 3.04% for the fourth quarter of 2003 and 3.54% for the first quarter of 2003. The increase from the previous quarter was attributable principally to a reduction in the cost of interest bearing liabilities to 2.48% compared to 2.55% the prior quarter. Other income -- Other income, excluding net securities gains and losses, was $6.9 million for the first quarter of 2004 compared with $7.0 million for the same period in 2003 and $6.6 million for the fourth quarter of 2003. Customer service fees, representing service charges on deposits and fees for other banking services, increased by $291 thousand, or 18.7%, from the first quarter of 2003 and declined by $263 thousand, or 12.5%, from the fourth quarter of 2003. The increase from the first quarter 2003 was mainly attributed to increased activity and charges within demand deposit accounts. Gains on sales of loans totaled $1.2 million, compared with $2.1 million in the first quarter of 2003 and $1.0 million in the fourth quarter of 2003. During the first quarter of 2004, gains from the sale of the guaranteed portion of its Small Business Administration (SBA) and other government guaranteed loans were $797 thousand, compared with $760 thousand of gains in the first quarter of 2003 and $797 thousand of gains in the fourth quarter of 2003. Gains from the sale of residential mortgage loans in the first quarter of 2004 were $448 thousand compared with $1.4 million of gains recognized in the first quarter of 2003 and $196 thousand of gains in the fourth quarter of 2003. With the recent rise in rates, fees associated with the mortgage related business have declined as refinancing activity slowed. Net security gains and losses, in the first quarter of 2004, included gains of $71 thousand compared to losses of $502 thousand in the prior quarter. The losses in the fourth quarter of 2003 related to the sales of equity securities and the write-down of a trust preferred security. Other expense -- Other expense was $21.4 million for the three months ended March 31, 2004, up 12.8% from the previous quarter and 28.2% from the same quarter last year. The principal reason for the increase in other expense compared to the previous quarter and the first quarter last year was the recognition of a $3.6 million expense related to the settlement of options in cash or with shares held less than six months. Additionally, the company recognized a $1.2 million expense for investment banker fees, due upon the signing of the merger agreement and for the fairness opinion, associated with the pending merger. Provision for income taxes -- The effective tax rate for the three months ended March 31, 2004 was 28.9% compared to 39.7% in the previous quarter and 31.4% in the same quarter last year. Balance sheet -- Total assets at March 31, 2004 were relatively stable at $2.8 billion compared to the same period last year and year-end 2003. In comparison to the prior quarter, assets increased by 1.2%. Assets declined a modest 1.6% versus the prior year with securities declining by 6.6% and loans increasing by 0.6% from the prior year period. Commercial real estate loans increased by $23.8 million, or 3.7%, from March 31, 2003 to March 31, 2004. Commercial real estate loans increased by $3.6 million, or 2.2%, on an annualized basis, from December 31, 2003 to March 31, 2004. Total deposits decreased by 3.6% compared to the prior year. From March 31, 2003 to March 31, 2004, interest bearing deposits declined by 9.7% and certificate of deposits declined by 12.2% while non-interest bearing deposits increased 11.7% and savings deposits, including money market accounts, increased by 13.9%. This is consistent with management's strategy to increase core deposits. Asset quality -- Non-performing loans to total loans increased to 1.45% at March 31, 2004 from 0.88% at March 31, 2003 and 1.32% at December 31, 2003. Non-performing loans at March 31, 2004 were $28.6 million compared to $17.2 million at March 31, 2003 and $25.9 million at December 31, 2003. Non-performing loans, excluding the portion of the loans guaranteed by the government, at March 31, 2004 were $21.7 million compared to $14.2 million at March 31, 2003 and $19.4 million at December 31, 2003. The 66.2% increase in non-performing loans from March 31, 2003 was mainly due to a $3.1 million increase in non-performing commercial real estate loans, a $1.9 million increase in non-performing aircraft loans and a $4.6 million increase in non- performing SBA guaranteed loans, of which $3.9 million is guaranteed by the government. The 10.6% increase from December 31, 2003 was due primarily to a $1.6 million increase in non-performing commercial real estate loans and a $1.8 million increase in non-performing aircraft loans. Net charge-offs were $1.0 million for the first quarter of 2004 compared to $1.3 million for the first quarter of 2003 and $1.5 million for the fourth quarter of 2003. Net charge-offs to average total loans were 0.20% for the first quarter of 2004 compared to 0.26% for the first quarter of 2003 and 0.31% for the fourth quarter of 2003. The decline in net charge-offs was attributed to a reduction in consumer charge-offs. About Unizan Unizan Financial Corp., a $2.8 billion holding company, is a premier financial services organization headquartered in Canton, Ohio. The company operates 43 full-service retail financial centers in five metropolitan markets in Ohio -- Canton, Columbus, Dayton, Newark and Zanesville. Through Unizan Financial Corp.'s subsidiaries, Unizan Bank, National Association; Unizan Financial Services Group, National Association; Unizan Banc Financial Services, Inc.; and Unizan Financial Advisors, Inc., the company offers its client base corporate and retail banking, Internet banking and wealth management products and services. Additionally, the company operates niche businesses in government guaranteed loan programs through its business lending centers in Cincinnati, Cleveland, Columbus and Dayton, Ohio; Detroit, Michigan; Mt. Arlington, New Jersey; and Indianapolis, Indiana; as well as aircraft lending centers in Columbus; Orlando, Florida; and Sacramento, California. For more information on Unizan Financial Corp. and its subsidiaries, visit the company on the Web at http://www.unizan.com/ . About Huntington Huntington Bancshares Incorporated is a $31 billion regional bank holding company headquartered in Columbus, Ohio. Through its affiliated companies, Huntington has more than 138 years of serving the financial needs of its customers. Huntington provides innovative retail and commercial financial products and services through more than 300 regional banking offices in Indiana, Kentucky, Michigan, Ohio and West Virginia. Huntington also offers retail and commercial financial services online at http://www.huntington.com/ ; through its technologically advanced, 24-hour telephone bank; and through its network of nearly 700 ATMs. Selected financial service activities are also conducted in other states including: Dealer Sales offices in Florida, Georgia, Tennessee, Pennsylvania and Arizona; Private Financial Group offices in Florida; and Mortgage Banking offices in Florida, Maryland and New Jersey. International banking services are made available through the headquarters office in Columbus and additional offices located in the Cayman Islands and Hong Kong. Additional information about the merger and where to find it: Huntington and Unizan filed relevant documents concerning the transaction with the Securities and Exchange Commission, including a registration statement on Form S-4 which includes a proxy statement/prospectus. Stockholders will be able to obtain a free copy of the proxy statement/prospectus, as well as other filings containing information about Huntington and Unizan, at the Securities and Exchange Commission's internet site ( http://www.sec.gov/ ). Copies of the proxy statement/prospectus and the filings with the Securities and Exchange Commission that will be incorporated by reference in the proxy statement/prospectus can also be obtained, without charge, by directing a request to Huntington Bancshares Incorporated, Huntington Center, 41 South High Street, Columbus, Ohio 43287, Attention: Investor Relations, 614-480-4060, or Unizan Financial Corp., 220 Market Avenue South, Canton, Ohio, 44702, Attn: Media Relations, 330-438-4858. Stockholders are urged to read the proxy statement/prospectus, and other relevant documents filed with the Securities and Exchange Commission regarding the proposed transaction, because they contain important information. The directors and executive officers of Unizan and other persons may be deemed to be participants in the solicitation of proxies in respect of the proposed merger. Information regarding Unizan's directors and executive officers is available in its annual report on Form 10-K filed with the SEC by Unizan on March 12, 2004. Other information regarding the participants in the proxy solicitation and a description of their direct and indirect interests, by security holdings or otherwise, are contained in the proxy statement/prospectus and other relevant materials filed with the SEC. Unizan Financial Corp. CONSOLIDATED BALANCE SHEETS (In thousands except per share data) 03/31/04 12/31/03 9/30/03 ASSETS Federal funds sold and interest bearing deposits with banks $5,080 $1,942 $4,517 Securities, net 487,316 474,636 489,758 Federal Home Loan Bank stock, at cost 35,061 34,716 34,369 Loans originated and held for sale 4,744 2,679 8,138 Loans: Commercial, financial and agricultural 258,677 261,167 272,129 Aircraft 134,889 133,277 136,388 Commercial real estate 662,289 658,699 634,344 Residential real estate 449,057 450,398 425,030 Consumer 464,323 464,943 465,324 Total Loans less unearned income 1,969,235 1,968,484 1,933,215 Less allowance for loan losses 24,611 24,611 24,612 Net loans 1,944,624 1,943,873 1,908,603 Total earning assets 2,501,436 2,482,457 2,469,997 Cash and cash equivalents 71,924 56,558 86,869 Premises and equipment, net 24,641 25,353 26,049 Goodwill 91,971 91,971 91,971 Other intangible assets 17,836 18,661 19,500 Accrued interest receivable and other assets 77,987 76,860 76,402 Total Assets $2,761,184 $2,727,249 $2,746,176 LIABILITIES Deposits: Non-interest bearing deposits $214,844 $206,501 $211,404 Demand - interest bearing 257,012 276,037 282,391 Savings 531,437 531,134 522,703 Certificates and other time deposits 942,850 962,120 993,797 Total deposits 1,946,143 1,975,792 2,010,295 Total borrowings 483,093 421,885 406,436 Accrued taxes, expenses and other liabilities 25,262 26,749 26,920 Total Liabilities 2,454,498 2,424,426 2,443,651 SHAREHOLDERS' EQUITY Common stock ($1.00 stated value, 100,000,000 shares authorized; 22,123,069 shares issued) 22,123 22,123 22,123 Paid-in capital 228,806 223,613 223,863 Retained earnings 74,461 74,993 75,355 Stock held by deferred compensation plan, 118,616, 118,616, 115,808, 113,126 and 89,418 shares at cost, respectively (2,016) (2,016) (1,966) Treasury stock, 368,389, 440,276, 474,665, 495,714 and 508,949 (14,392) (11,515) (12,126) shares at cost, respectively Accumulated other comprehensive loss (2,296) (4,375) (4,724) Total Shareholders' Equity 306,686 302,823 302,525 Total Liabilities and Shareholders' Equity $2,761,184 $2,727,249 $2,746,176 Unizan Financial Corp. CONSOLIDATED BALANCE SHEETS (In thousands except per share data) 6/30/03 3/31/03 ASSETS Federal funds sold and interest bearing deposits with banks $2,600 $3,989 Securities, net 506,245 521,585 Federal Home Loan Bank stock, at cost 34,026 33,691 Loans originated and held for sale 17,364 17,660 Loans: Commercial, financial and agricultural 277,642 265,945 Aircraft 135,255 130,122 Commercial real estate 625,003 638,494 Residential real estate 439,862 480,510 Consumer 450,950 442,563 Total Loans less unearned income 1,928,712 1,957,634 Less allowance for loan losses 24,917 25,281 Net loans 1,903,795 1,932,353 Total earning assets 2,488,947 2,534,559 Cash and cash equivalents 75,522 77,895 Premises and equipment, net 26,747 27,025 Goodwill 91,971 91,971 Other intangible assets 20,344 21,190 Accrued interest receivable and other assets 75,575 77,373 Total Assets $2,754,189 $2,804,732 LIABILITIES Deposits: Non-interest bearing deposits $205,674 $192,318 Demand - interest bearing 301,009 284,646 Savings 517,154 466,725 Certificates and other time deposits 1,041,413 1,074,264 Total deposits 2,065,250 2,017,953 Total borrowings 363,646 455,731 Accrued taxes, expenses and other liabilities 26,098 33,300 Total Liabilities 2,454,994 2,506,984 SHAREHOLDERS' EQUITY Common stock ($1.00 stated value, 100,000,000 shares authorized; 22,123,069 shares issued) 22,123 22,123 Paid-in capital 221,509 221,288 Retained earnings 71,471 67,608 Stock held by deferred compensation plan, 118,616, 118,616, 115,808, 113,126 and 89,418 shares at cost, respectively (1,857) (1,394) Treasury stock, 368,389, 440,276, 474,665, 495,714 and 508,949 (10,052) (10,479) shares at cost, respectively Accumulated other comprehensive loss (3,999) (1,398) Total Shareholders' Equity 299,195 297,748 Total Liabilities and Shareholders' Equity $2,754,189 $2,804,732 Unizan Financial Corp. COMPARATIVE STATEMENTS OF INCOME (In thousands except per share data) Three months ended 03/31/04 12/31/03 9/30/03 Interest income: Interest on federal funds sold and interest bearing deposits with banks $8 $8 $11 Interest and dividends on securities 4,597 4,127 4,290 Interest and fees on loans and loans held for sale 27,674 28,401 28,238 Total interest income 32,279 32,536 32,539 Interest expense: Interest on deposits 9,150 9,764 10,576 Interest on borrowings 4,337 4,164 5,148 Total interest expense 13,487 13,928 15,724 Net interest income 18,792 18,608 16,815 Provision for loan losses 1,000 1,492 1,026 Net interest income after provision for loan losses 17,792 17,116 15,789 Other income: Trust, financial planning, brokerage and insurance sales 1,870 1,691 1,695 Customer service fees 1,844 2,107 1,996 Gains on sale of loans 1,245 993 1,796 Security gains/(losses), net 71 (502) 1,821 Other operating income 1,984 1,834 2,535 Total other income 7,014 6,123 9,843 Other expense: Salaries, wages, pension and benefits 12,774 10,659 8,146 Occupancy expense 867 828 844 Furniture and equipment expense 534 562 586 Taxes other than income taxes 630 504 505 Intangible amortization expense 825 839 844 Other operating expense 5,784 5,598 4,744 Total other expense 21,414 18,990 15,669 Income before income taxes 3,392 4,249 9,963 Provision for income taxes 980 1,685 3,121 Net Income $2,412 $2,564 $6,842 Earnings per share: Basic $0.11 $0.12 $0.32 Diluted $0.11 $0.12 $0.31 Dividends per share $0.14 $0.14 $0.14 Weighted average number of shares: Basic 21,733,289 21,656,687 21,632,719 Diluted 21,972,349 21,940,831 22,134,304 NOTE: Per share data is based on the weighted average number of shares outstanding adjusted for stock dividends or splits calculated under the treasury method using the average and end of period stock market price for basic and diluted shares, respectively. Unizan Financial Corp. COMPARATIVE STATEMENTS OF INCOME (In thousands except per share data) Three months ended 6/30/03 3/31/03 Interest income: Interest on federal funds sold and interest bearing deposits with banks $145 $9 Interest and dividends on securities 6,394 5,934 Interest and fees on loans and loans held for sale 29,906 31,397 Total interest income 36,445 37,340 Interest expense: Interest on deposits 11,621 11,051 Interest on borrowings 4,807 4,998 Total interest expense 16,428 16,049 Net interest income 20,017 21,291 Provision for loan losses 1,046 1,269 Net interest income after provision for loan losses 18,971 20,022 Other income: Trust, financial planning, brokerage and insurance sales 2,101 1,712 Customer service fees 1,708 1,553 Gains on sale of loans 2,206 2,130 Security gains/(losses), net 454 - Other operating income 1,215 1,557 Total other income 7,684 6,952 Other expense: Salaries, wages, pension and benefits 9,482 8,932 Occupancy expense 849 911 Furniture and equipment expense 609 558 Taxes other than income taxes 525 517 Intangible amortization expense 846 858 Other operating expense 4,489 4,934 Total other expense 16,800 16,710 Income before income taxes 9,855 10,264 Provision for income taxes 3,074 3,228 Net Income $6,781 $7,036 Earnings per share: Basic $0.31 $0.32 Diluted $0.30 $0.32 Dividends per share $0.14 $0.14 Weighted average number of shares: Basic 21,615,036 21,831,377 Diluted 22,459,500 22,290,839 NOTE: Per share data is based on the weighted average number of shares outstanding adjusted for stock dividends or splits calculated under the treasury method using the average and end of period stock market price for basic and diluted shares, respectively. Unizan Financial Corp. CONSOLIDATED FINANCIAL HIGHLIGHTS (Dollars in thousands, except per share data) 2004 2003 2003 EARNINGS 1st Qtr 4th Qtr 3rd Qtr Net Interest Income FTE (1) $19,061 18,909 17,103 Provision for loan losses 1,000 1,492 1,026 Other income 6,943 6,625 8,022 Security gains/(losses), net 71 (502) 1,821 Other expenses 21,414 18,990 15,669 FTE adjustment (1) 269 301 288 Net income $2,412 2,564 6,842 Net income per share - diluted $0.11 0.12 0.31 PERFORMANCE RATIOS Return on average assets (ROA) 0.36% 0.38% 0.99% Return on average common equity (ROE) 3.17% 3.35% 9.06% Tangible return on average tangible assets 0.45% 0.48% 1.12% Tangible return on avg. tangible common equity 6.05% 6.40% 15.61% Net interest margin FTE 3.08% 3.04% 2.73% Efficiency ratio (2) 60.52% 62.59% 54.98% MARKET DATA Book value/common share $14.10 13.97 13.97 Tangible book value/common share 9.05 8.86 8.83 Period-end common share mkt value 24.91 20.25 19.95 Market as a % of book 176.7% 145.0% 142.8% Cash dividends/common share $0.135 0.135 0.135 Common stock dividend payout ratio 121.68% 114.12% 43.22% Average basic common shares 21,733,289 21,656,687 21,632,719 Average diluted common shares 21,972,349 21,940,831 22,134,304 Period end common shares 21,754,680 21,682,793 21,648,404 Common stock market capitalization $541,909 439,077 431,886 ASSET QUALITY Gross charge-offs $1,683 2,265 1,901 Net charge-offs 1,000 1,494 1,330 Delinquency Ratio 1.67% 1.61% 1.65% Allowance for loan losses $24,611 24,611 24,612 Non-accrual loans 23,152 20,566 19,888 Past due 90 days or more & accruing 5,488 5,333 5,032 Other assets owned 1,793 2,143 2,095 Nonperforming assets (NPAs) 30,433 28,042 27,015 Restructured loans 2,530 2,565 2,598 Net charge-off ratio 0.20% 0.31% 0.27% Allowance/loans 1.25% 1.25% 1.27% NPL to loans 1.45% 1.32% 1.29% NPA to loans + other assets 1.54% 1.42% 1.40% Allowance to NPLs 85.93% 95.03% 98.76% AVERAGE BALANCES Assets $2,728,886 2,706,490 2,732,860 Deposits 1,954,707 1,994,244 2,039,429 Loans 1,971,090 1,947,729 1,946,693 Earning assets 2,486,312 2,466,001 2,483,198 Shareholders' equity 306,128 303,902 299,681 ENDING BALANCES Assets $2,761,184 2,727,249 2,746,176 Deposits 1,946,143 1,975,792 2,010,295 Loans 1,969,235 1,968,484 1,933,215 Goodwill and other intangible assets 109,807 110,632 111,471 Earning assets 2,501,436 2,482,457 2,469,997 Total shareholders' equity 306,686 302,823 302,525 (1) - FTE defined as fully tax-equivalent (2) - Excludes amortization of intangibles and impairment of goodwill expenses. First quarter 2004 excludes $3,638 of stock option expense and $1,203 merger related professional fees. Fourth quarter 2003 excludes $2,159 of expense related to a severance agreement. Second quarter 2003 excludes $1,232 of expense related to the termination of the defined benefit plan. Certain previously reported amounts may have been reclassified to conform to current reporting presentation. Unizan Financial Corp. CONSOLIDATED FINANCIAL HIGHLIGHTS (Dollars in thousands, except per share data) 2003 2003 EARNINGS 2nd Qtr 1st Qtr Net Interest Income FTE (1) 20,305 21,533 Provision for loan losses 1,046 1,269 Other income 7,230 6,952 Security gains/(losses), net 454 - Other expenses 16,800 16,710 FTE adjustment (1) 288 242 Net income 6,781 7,036 Net income per share - diluted 0.30 0.32 PERFORMANCE RATIOS Return on average assets (ROA) 0.97% 1.05% Return on average common equity (ROE) 9.00% 9.44% Tangible return on average tangible assets 1.09% 1.20% Tangible return on avg. tangible common equity 15.53% 16.52% Net interest margin FTE 3.19% 3.54% Efficiency ratio (2) 52.56% 55.32% MARKET DATA Book value/common share 13.83 13.78 Tangible book value/common share 8.64 8.54 Period-end common share mkt value 17.57 18.32 Market as a % of book 127.0% 132.9% Cash dividends/common share 0.135 0.135 Common stock dividend payout ratio 43.03% 41.46% Average basic common shares 21,615,036 21,831,377 Average diluted common shares 22,459,500 22,290,839 Period end common shares 21,627,356 21,614,121 Common stock market capitalization 379,993 395,971 ASSET QUALITY Gross charge-offs 1,995 1,723 Net charge-offs 1,410 1,259 Delinquency Ratio 1.52% 1.28% Allowance for loan losses 24,917 25,281 Non-accrual loans 19,526 14,456 Past due 90 days or more & accruing 3,899 2,775 Other assets owned 2,655 2,135 Nonperforming assets (NPAs) 26,080 19,366 Restructured loans 2,630 2,662 Net charge-off ratio 0.29% 0.26% Allowance/loans 1.29% 1.29% NPL to loans 1.21% 0.88% NPA to loans + other assets 1.35% 0.99% Allowance to NPLs 106.37% 146.72% AVERAGE BALANCES Assets 2,802,727 2,716,720 Deposits 2,077,406 1,921,585 Loans 1,958,958 1,954,108 Earning assets 2,553,641 2,469,952 Shareholders' equity 302,065 302,188 ENDING BALANCES Assets 2,754,189 2,804,732 Deposits 2,065,250 2,017,953 Loans 1,928,712 1,957,634 Goodwill and other intangible assets 112,315 113,161 Earning assets 2,488,947 2,534,559 Total shareholders' equity 299,195 297,748 (1) - FTE defined as fully tax-equivalent (2) - Excludes amortization of intangibles and impairment of goodwill expenses. First quarter 2004 excludes $3,638 of stock option expense and $1,203 merger related professional fees. Fourth quarter 2003 excludes $2,159 of expense related to a severance agreement. Second quarter 2003 excludes $1,232 of expense related to the termination of the defined benefit plan. Certain previously reported amounts may have been reclassified to conform to current reporting presentation. Unizan Financial Corp. Average Balance Sheet and Related Yields Three Months Ended March 31, 2004 Average Income/ (dollars in thousands) Balance Expense Rate (1) Interest-earning assets Interest bearing deposits and federal funds sold $4,395 $8 0.73 % Securities 510,827 4,853 3.82 Total loans (2) 1,971,090 27,687 5.65 Total interest-earning assets (3) 2,486,312 32,548 5.27 Nonearning assets: Cash and due from banks 57,353 Other nonearning assets 209,843 Allowance for loan losses (24,622) Total assets $2,728,886 Interest bearing liabilities: Demand deposits $258,295 $369 0.57 % Savings deposits 531,844 1,296 0.98 Time deposits 955,864 7,485 3.15 Subordinated note (5) 20,619 505 9.85 Company obligated mandatorily redeemable trust preferred (5) - - - Other borrowings 422,995 3,832 3.64 Total interest bearing liabilities 2,189,617 13,487 2.48 Noninterest bearing liabilities: Demand deposits 208,704 Other liabilities 24,437 Shareholders' equity 306,128 Total liabilities and equity $2,728,886 Net interest income and interest rate spread (3) $19,061 2.79 % Net interest margin (4) 3.08 % (1) Calculated on an annualized basis. (2) Loan fees are included in interest income on loans. (3) Interest income is computed on a fully tax equivalent (FTE) basis, using a tax rate of 35%. (4) The net interest margin represents net interest income as a percentage of average interest-earning assets. (5) As of December 31, 2003, based on new accounting guidance issued under FASB Interpretation No. 46, the amounts previously reported as company obligated mandatorily redeemable trust preferred" have been recaptioned "subordinated note". The deconsolidation of the Trust increased the Company's balance sheet by $619, the difference representing the Company's common ownership in the Trust. Unizan Financial Corp. Average Balance Sheet and Related Yields Three Months Ended March 31, 2003 Average Income/ (dollars in thousands) Balance Expense Rate (1) Interest-earning assets Interest bearing deposits and federal funds sold $3,099 $9 1.18 % Securities 512,745 6,159 4.87 Total loans (2) 1,954,108 31,414 6.52 Total interest-earning assets (3) 2,469,952 37,582 6.17 Nonearning assets: Cash and due from banks 58,476 Other nonearning assets 213,572 Allowance for loan losses (25,280) Total assets $2,716,720 Interest bearing liabilities: Demand deposits $269,511 553 0.83 % Savings deposits 425,462 1,032 0.98 Time deposits 1,044,394 9,466 3.68 Subordinated note (5) - - - Company obligated mandatorily redeemable trust preferred (5) 20,000 505 10.24 Other borrowings 435,117 4,493 4.19 Total interest bearing liabilities 2,194,484 16,049 2.97 Noninterest bearing liabilities: Demand deposits 182,218 Other liabilities 37,830 Shareholders' equity 302,188 Total liabilities and equity $2,716,720 Net interest income and interest rate spread (3) $21,533 3.20 % Net interest margin (4) 3.54 % (1) Calculated on an annualized basis. (2) Loan fees are included in interest income on loans. (3) Interest income is computed on a fully tax equivalent (FTE) basis, using a tax rate of 35%. (4) The net interest margin represents net interest income as a percentage of average interest-earning assets. (5) As of December 31, 2003, based on new accounting guidance issued under FASB Interpretation No. 46, the amounts previously reported as company obligated mandatorily redeemable trust preferred" have been recaptioned "subordinated note". The deconsolidation of the Trust increased the Company's balance sheet by $619, the difference representing the Company's common ownership in the Trust. Unizan Financial Corp. NONPERFORMING AND UNDERPERFORMING ASSETS (dollars in thousands) 03/31/04 12/31/03 9/30/03 6/30/03 3/31/03 Non-performing loans: Commercial $1,294 $1,292 $1,348 $1,515 $446 Commercial real estate 5,713 4,112 4,294 3,422 2,652 Government guaranteed 9,334 8,939 8,573 7,821 4,723 Aircraft 2,003 247 134 59 88 Residential real estate 8,713 9,838 8,911 9,298 7,686 Direct installment loans 161 37 118 68 71 Indirect installment loans 212 212 331 164 642 Home equity 1,210 1,222 1,211 1,078 923 Total non-performing loans $28,640 $25,899 $24,920 $23,425 $17,231 Less: Government guaranteed amount 6,965 6,537 6,765 6,227 3,077 Total non-performing loans excluding government guaranteed amount $21,675 $19,362 $18,155 $17,198 $14,154 Total non-performing loans $28,640 $25,899 $24,920 $23,425 $17,231 Other assets owned 1,793 2,143 2,095 2,655 2,135 Total non-performing assets $30,433 $28,042 $27,015 $26,080 $19,366 Less: Government guaranteed amount 7,541 6,969 7,314 6,789 3,651 Total non-performing assets excluding government guaranteed amount $22,892 $21,073 $19,701 $19,291 $15,715 Restructured loans $2,530 $2,565 $2,598 $2,630 $2,662 Ratio of: Non-performing loans to total loans 1.45% 1.32% 1.29% 1.21% 0.88% Non-performing assets to total assets 1.10% 1.03% 0.98% 0.95% 0.69% Non-performing assets to total loans + other assets 1.54% 1.42% 1.40% 1.35% 0.99% Allowance to total loans 1.25% 1.25% 1.27% 1.29% 1.29% Allowance to non-performing loans 85.93% 95.03% 98.76% 106.37% 146.72% Ratio of (excluding government guaranteed amount): Non-performing loans to total loans 1.10% 0.98% 0.94% 0.89% 0.72% Non-performing assets to total assets 0.83% 0.77% 0.72% 0.70% 0.56% Non-performing assets to total loans + other assets 1.16% 1.07% 1.02% 1.00% 0.80% Allowance to non-performing loans 113.55% 127.11% 135.57% 144.88% 178.61% NET CHARGE-OFFS TO AVERAGE LOANS AND LEASES 03/31/04 12/31/03 9/30/03 Average loans and leases: Commercial $188,992 $193,154 $216,557 Commercial real estate 664,241 648,784 622,248 Government guaranteed 61,676 62,591 58,665 Aircraft 133,725 133,267 135,368 Residential real estate 453,362 439,369 443,603 Indirect installment loans 123,426 130,478 140,271 Home equity 307,116 298,712 283,578 Other consumer 38,552 41,374 46,403 Total average loans and leases $1,971,090 $1,947,729 $1,946,693 Net charge-offs (recoveries): Commercial $(17) $57 $43 Commercial real estate 261 101 266 Government guaranteed 255 102 48 Aircraft - (124) - Residential real estate (50) 38 26 Indirect installment loans 371 716 620 Home equity 11 286 33 Other consumer 169 318 294 Total $1,000 $1,494 $1,330 03/31/04 12/31/03 9/30/03 Net charge-offs (recoveries) to average loans and leases (annualized): Commercial -0.04% 0.12% 0.08% Commercial real estate 0.16% 0.06% 0.17% Government guaranteed 1.65% 0.65% 0.33% Aircraft 0.00% -0.37% 0.00% Residential real estate -0.04% 0.03% 0.02% Indirect installment loans 1.20% 2.20% 1.77% Home equity 0.01% 0.38% 0.05% Other consumer 1.75% 3.07% 2.53% Total 0.20% 0.31% 0.27% NET CHARGE-OFFS TO AVERAGE LOANS AND LEASES 6/30/03 3/31/03 Average loans and leases: Commercial $211,014 $195,806 Commercial real estate 629,637 633,614 Government guaranteed 53,636 55,250 Aircraft 132,604 130,509 Residential real estate 469,754 482,719 Indirect installment loans 149,215 153,876 Home equity 261,613 242,606 Other consumer 51,485 59,728 Total average loans and leases $1,958,958 $1,954,108 Net charge-offs (recoveries): Commercial $20 $79 Commercial real estate - 393 Government guaranteed 102 (55) Aircraft 7 28 Residential real estate 117 18 Indirect installment loans 935 697 Home equity 17 19 Other consumer 212 80 Total $1,410 $1,259 6/30/03 3/31/03 Net charge-offs (recoveries) to average loans and leases (annualized): Commercial 0.04% 0.16% Commercial real estate 0.00% 0.25% Government guaranteed 0.76% -0.40% Aircraft 0.02% 0.09% Residential real estate 0.10% 0.01% Indirect installment loans 2.51% 1.81% Home equity 0.03% 0.03% Other consumer 1.65% 0.54% Total 0.29% 0.26% DATASOURCE: Unizan Financial Corp. CONTACT: Investors, Roger L. Mann, President and Chief Executive Officer, +1-330-438-1118, or +1-866-235-7203, or , or Media, Sandy K. Upperman, Vice President, Corporate Communications, +1-330-438-4858, , both Unizan Financial Corp. Web site: http://www.unizan.com/ http://www.huntington.com/ Company News On-Call: http://www.prnewswire.com/comp/127633.html

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