Welcome everyone to the Huntington Bancshares First Quarter Earnings Call. [Operator Instructions] I would now like to turn the call over to Mr. Jay Gould. Mr. Gould, you may begin.

Well, thank you, Sarah, and welcome, everyone. I am Jay Gould, Director of Investor Relations for Huntington. Copies of the slides that 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 1 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 or playback or should you have difficulty getting a copy of the slides. Slides 2 through 4, note several aspects of the basis of today's presentation. I encourage you to read these but let me point out one key disclosure. This presentation contains both GAAP and non-GAAP financial measures where we believe it's helpful to understanding Huntington's results of operations or financial position. Where non-GAAP financial measures are used, the comparable GAAP financial measures as well as the reconciliation to the comparable GAAP financial measure can be found in the slide presentation, its appendix, the earnings press release, the quarterly financial review, the quarterly performance discussion or in the related 8-K filed today, all of which can be found on our website. Turning to Slide 5. Today's question including the Q&A period may contain forward-looking statements, and such statements are based on information and assumptions available at this time and are subject to changes, risks and uncertainties which may cause the actual results to differ materially. We assume no obligation to update such statements. For a complete discussion of risks and uncertainties, please refer to this slide and materials filed with the SEC, including our most recent forms 10-K, 10-Q and 8-K filings. Now turning to today's presentation in Slide 6. Participating today are Steve Steinour, Chairman, President and Chief Executive Officer; Don Kimble, Senior Executive Vice President and Chief Financial Officer; and Dan Neumeyer, Senior Executive Vice President and Chief Credit Officer. Also present is Todd Beekman, Senior Vice President and Assistant Director of Investor Relations. Let's get started by turning to Slide 7. Steve?

Welcome, everyone. I'll begin with a review of our first quarter performance highlights. After my overview, Don will follow with his usual recap of our financial performance. Dan will provide an update on credit. I'll then return with a discussion of our expectations and key messages to our investors. Turning to Slide 8. We reported net income of $126.4 million or $0.14 per share. This represented a 3% improvement to net income from the fourth quarter. As Don will detail, the current quarter's earnings per common share were negatively impacted by one significant items of $17 million or $0.01 per common share of additions to litigation reserves. The first quarter results were consistent with our expectations and set the stage for continued earnings growth throughout this year as pretax, pre-provision income is expected to rebound from this quarter's levels and provision for credit losses remain low. Our pretax, pre-provision income was $240.9 million, down $19.1 million or 7% from the fourth quarter. As always, the first quarter of the year has several seasonal factors: a lower day count, which affects revenue with slight [ph] and other benefit costs impacting expenses. We estimate this seasonality reduced pretax, pre-provision by roughly $16 million. Fully taxable equivalent revenue decreased $38 million or 5.6%. This reflected a $10.7 million or 2.6% decrease in net interest income and a $27.3 million or 10.3% decrease in non-interest income. Net interest income declines were primarily driven by lower day count and a 2% reduction average earning assets, reflecting a $643 million or 25% annualized reduction in available-for-sale and other securities, partially offset by $298 million or 3% growth in average total loans. The net interest margin increased 5 basis points to 3.42% and continue to be positively impacted by strong growth in consumer checking account households. This…

Great. Thanks, Steve. Slide 10 provides a summary of our quarterly earnings trends. We met our performance metrics we'll discuss later in the presentation so let's move on. As shown on Slide 11, our net income for the first quarter was $126.4 million or $0.14 per share. One significant item impacted the quarter's results. We added $17 million or $0.01 per share to our litigation reserves. These additions generally relate to a few long-standing unrelated cases. We believe we have established meaningful and appropriate reserves on these cases. Slide 12 is a summary of income statement and shows the $3.2 million increase in pretax income, reflecting the benefits of a $37.6 million decline in provision expense and a $3.9 million decrease in non-interest expense, which were partially offset by an $11 million decrease in net interest income and a $27.3 million decrease in non-interest income. I will detail these changes in subsequent slides. Turning to Slide 13. We show the trends in our revenues and pretax, pre-provision on the left hand side of the slide. The decline in revenues and pretax, pre-provision income this past quarter was primarily related to seasonal trends in our business, which negatively impacted the PTPP by roughly $16 million and the $30.5 million decline in our mortgage revenues. We expect to reverse the recent decline in trend in our pretax, pre-provision over the next several quarters. Adjusting for the seasonal impact, our pretax, pre-provision would have been approximately $257 million. We expect to continue balance sheet growth and fee income initiatives will bring this performance back into the $260 million per quarter range. Slide 14 depicts the trends in our net interest income and margin. During the first quarter, our fully taxable equivalent net interest income decreased by $10.7 million despite a 5 basis point…

Thanks, Don. Slide 21 provides an overview of our credit quality trends. These trends continue to be positive in virtually every category. Non-performing loans fell to 1.66% at the end of the first quarter, down from 2.04% one quarter earlier. Similarly, non-performing assets were 1.8% from 2.21% in December. The level of criticized assets also saw a meaningful reduction in the quarter falling from 9.15% at December to 7.9% at March 31. The net charge-off rate also fell from 1.82% to 1.73%. 90-day loans past due and accruing were reduced in the quarter to 19 basis points equaling our best performance in some time. The ACL ratio fell to 3.07% at March 31 from 3.39% one quarter earlier. The ACL coverage ratio on non-performing loans and non-performing assets showed significant strengthening, however, moving to 185% and 170%, respectively, and that's up from 166% and 153% at the previous quarter end. The ratio of ACL to criticized assets also improved to nearly 39% from 37%, reflecting an increased coverage of our emerging problem loans. Slide 22 depicts the trends in commercial loan delinquencies. 30-day delinquencies were steady from the prior quarter at 73 basis points. This level of delinquency is noticeably better than what was experienced throughout most of 2010. We have no commercial loans in the 90-day past due category and accruing as we continue our aggressive recognition and treatment of problem loans. Slide 23 outlines the trend of our consumer delinquencies. 30-day delinquencies were down noticeably quarter-over-quarter and that's a continuation of a trend exhibited throughout 2010. Similarly, 90-day delinquencies were also reduced, continuing a similar pattern. All consumer segments were flat to down in delinquencies quarter-over-quarter. This is one predictor of positive consumer performance in the coming quarters. Slide 24 continues with a view of commercial and consumer…

Thanks. I'd like to use Slide 29 to recap our current thinking regarding the remainder of 2011. With respect to the economy, even with the added uncertainty related to recent events in Japan that have negatively impacted the global supply chain and the continued instability in Northern Africa and the Middle East, we expect the U.S. economy will remain relatively stable with some potential improvement in the second half of the year. The primary driver of net income growth throughout the rest of the year for us is an expected rebound of pretax, pre-provision income from this quarter's level coupled with continued low provisions for credit losses. Net interest income should grow as we continue to see loan and deposit growth and a relatively stable net interest margin. Specifically, on loan growth, we expect recent trends to continue with overall modest loan growth driven by continued strong growth in auto, meaningful growth in commercial and industrial loans, modest growth in home equity and residential mortgages. These increases are expected to be partially offset by the continued decline in commercial real estate loans. We anticipate the income growth will be mixed. We expect mortgage banking income to remain near current levels with service charge income beginning to show modest growth later in this year as the benefits from our "Fair Play" banking philosophy continue to gain momentum, producing strong consumer checking account, household growth and increased product penetration. Assuming implementation of the Durbin amendment, the electronic banking income is expected to decline. Non-interest expense is expected to be relatively stable as continued investment in strategic initiative should be offset by continued low credit-related costs and improved expense efficiencies. Non-accrual loans are expected to continue to decline meaningfully throughout the year. Turning to Slide 30. In closing, I will remind our investors and customers of several important messages. Our balance sheet is strong and getting stronger everyday and that covers all aspects: liquidity, reserves, capital. Credit quality continues to rapidly improve. Over the last year, non-accrual loans and non-performing assets are both down over 60%. And while we don't expect to maintain those low rates of decline, we do expect to see continued meaningful improvement in overall credit quality throughout the year. Our strategic initiatives continue to gain traction. Most importantly, and from a long-term revenue and earnings growth opportunity, our "Fair Play" banking philosophy is increasingly and positively differentiating us from our peers. Huntington is creating this category of one in Midwest banking. Lastly, our strong capital ratios and the expectation for continued growth in earnings and capital positions us to actively explore capital management opportunities, including raising the dividend at some point. So thanks for your interest in Huntington. Sarah, we'll now open for questions.

[Operator Instructions] And your first question comes from the of Ken Usdin from Jefferies. Kenneth Usdin - Jefferies & Company, Inc.: I just wanted to ask you on the expense guidance this quarter, it has this $70 million reversal and it also included some of the seasonal step up from the FICO tax as well. So when you're talking about flat expenses, can you talk about whether that's x those items or inclusive of those items?

Ken, this is Don. And as far as the guidance what we're seeing it as generally flat. And that would suggest that over time, we'll continue to make some investments in strategic initiatives. We've talked publicly about some of our brand in which show results and advertising and other components associated with it. We've talked about Giant Eagle. And so we will have some expense increases that will over time offset those seasonal and/or onetime-related items. Kenneth Usdin - Jefferies & Company, Inc.: I guess if you could just then talk to the magnitude because it would seem that if I normalize for those two, expenses should be more somewhere in the like 4- or 5-type of range. So to get to flat, that means that you're just expecting to invest a tremendous amount of money in the second quarter. So I just wanted to make sure that I'm reading that right, that you're really plowing through with the magnitude of expense management -- Don, investing, I should say. Sorry.

Ken, I think where I would not want to specify is that you're suggesting that second quarter is specific, and I wouldn't want to say that, that's where we'd be returning the expense levels than necessarily in that quarter. I'll just say, over time, we would have investments in marketing and expansion associated with initiatives and other things that could offset some of those onetime or seasonal type of issues Kenneth Usdin - Jefferies & Company, Inc.: Okay, so it's very possible that just sequentially that expenses could be down in the second quarter below that level but over time, this is a reasonable run rate just from a broader longer-term perspective?

Ken, you can draw your own conclusions. We prefer not to derive specific quarterly guidance but just more general trend information. Kenneth Usdin - Jefferies & Company, Inc.: Okay, that's fine. And second question is just on, Steve, your points about the dividend and capital management. With a 9.75% Tier 1 common, you're sitting on plenty of excess capital. Can you just remind us again of your priorities then as far as your dividends, eventual maybe buybacks and M&A, versus the internal investment and how that has, if at all, changed given the rapid growth of capital? Thanks, again.

Thank you, Ken, for the interest. We've always consistently stated that we want to grow the core, so capital for core growth is vital to us. Now beyond that, we haven't provided guidance about relative priorities: dividends, acquisition, buyback or anything else. We are looking at a forward capital plan, not having the benefit of the actions taken with this GAAP 19 late in the first quarter and assessing our plans at this point, Ken.

Your next question comes from the line of Ken Zerbe from Morgan Stanley.

I was hoping you could provide just one little more detail about if you've collected any metrics on the profitability of the new household, I guess, checking account growth related to Fair Play. In terms of those customers in particular that you're winning in the market, the new customers, are you able to cross-sell to those customers? And I'm trying if possible to separate it out from your existing customer base where you are pushing more cross-sell. And also maybe talk a little bit about the size of the accounts coming in, in new checking accounts that might be related to Fair Play. Thanks.

Sure, Ken. This is Don. As far as just some indications that our checking account balances on an annualized basis were up 8% and our households grew at a 9% pace, so we think that they're generally keeping in line as far as growth rate that we've been very pleased with the cross-sell impact of the new account growth and very pleased overall with the trajectory as far as the most recent originations that we plan on earlier or sometime middle of May and providing a little bit more clarity as far as the impacts of some of these initiatives and providing a little bit more guidance there from a performance perspective at the next upcoming conference we'd be at. That would probably be a better time to speak in a little bit more additional information

Okay, all right. No, that's fair. And then the other question, I think back in your Investor Day, you talked about growing your M&A platform or hiring people, building out systems. At this point, are you completely done with the, I guess, potential M&A build out and that you're ready to go if you find something that is of interest?

We never, I think, will be considering ourselves complete. There will always be a room for improvement, but we are -- we've made substantial progress. And we like the robustness of what we built at this point, Ken, and anticipated a hiring that was alluded to has been concluded.

Your next question comes from the line of Scott Siefers from Sandler O'Neill. Scott Siefers - Sandler O’Neill: I think first, Don, probably most appropriate for you, I just wanted to follow-up on the expense guidance. It looks like the expense guidance aggregates both the provision and non-interest expenses. So 1, am I reading that correctly? So does that suggest also that we've probably seen pretty much all we'll see of the lower level of provision? And then second, just also for you, Don, I was just hoping you could speak a little more about the margin and specifically, how you'll hold it just in that -- imagine core deposit growth is still going to continue to outpace growth, so you have the lift from some higher cost stuff rolling off but kind of have that tough excess liquidity issue, and then you also have the swap book. So you can just talk about some of the countervailing items that you see impacting your margin over the rest of the year?

That's great, Scott. And first, as far as the expense guidance, we allude to our credit cost or collection cost as opposed to provision expense are included in that. And so that's more working through OREO-related properties and the cost of maintaining those types of assets and legal costs in connection with the overall collection efforts. So that was more the implication as opposed provision expense, so that I just want to make sure that was clarified. As far as the margin guidance prospectively, we do think that we'll see a better alignment between deposit growth and loan growth, prospectively. And so we think that we will see margin being able to remain relatively stable because we won't see a lot of excess funds like we saw last year being put into the investment portfolio. And so we think loan growth can absorb the deposit growth that we're projecting. During the quarter, we did take some management action associated with some of the money market rates specifically. And we continue to manage some of our time deposit rates down. And each of those have a positive impact from a couple different sources: 1, is that it reduces the rate of existing relationships on the money market side; and 2, it controls the growth on the deposit side so that, that loan growth is supported from just the core funding base.

Your next question comes from the line of Tony Davis from Stifel, Nicolaus Anthony Davis - Stifel, Nicolaus & Co., Inc.: Steve, I have to admit, we hear often that you guys are being pretty aggressive, I guess, in small business, middle-markets, C&I pricing. I note here in the last quarter, the C&I embedded yield dropped 37 points. That's almost twice the linked quarter declines we saw in the September and December quarter. So I guess a couple questions. 1, could you give us some color on the degree to which you've lowered pricing above cost of funds, if you have recently? And secondly, has there been any changes well to underwriting standards?

Tony, this is Don. I'll take a first crack at that. We talked in previous quarters about the impact of our interest rate swaps. When you close some of those out at a net gain position, that gain amortizes down over quarters. And from a disclosure perspective, the margin associated with those swaps goes into primarily that C&I loan yields category because we're swapping out those variable rate or LIBOR-based commercial loans into a fixed rate with these swaps. And so that was the majority of the decline. I think it was around 28, 29 basis points type of impact there about for the C&I decline, including that amortization, along with the fact that during the quarter, we reduced our overall swap position from about $11 billion to $7 billion to take us a little bit more out of that sensitive position than where we were previously. And so those two actions really result in that 28 to 29 basis point reduction. We did see a slight increase in the impact of new non-accruals coming through that commercial loan yield as well. And so very little of that compression and margin had anything to do with new loan originations being at tighter spreads. I would say generally that we've been maintaining a fairly strong discipline to our pricing grid that we put in place. And we do agree that we are aggressive in going after customers from a growth perspective but it's not being led with price on the table. So I think that we're trying to maintain that discipline as appropriate.

Yes, and, Tony, this is Dan. I would just add that we also have not compromised the underwriting standards. The market is getting a little bit more frothy. And while there's been some pricing pressure, we've tried to maintain a discipline both on pricing and on structure. And we have had this pass on certain credits. We've seen a few of the covenant-like deals come through. We have not participated in those and really are sticking to our existing underwriting standards all along the way. Anthony Davis - Stifel, Nicolaus & Co., Inc.: I wonder if that same policy or approach, Dan, maybe Nick is there, too, would apply to the underwriting business. Obviously, the captives have gotten a lot more aggressive here recently.

Nick is not here but that would be the case. Sorry, Don and I look at our production weekly on spread and credit quality and mix. So we are very tightly managing it, and we can assure you we've had consistency. Anthony Davis - Stifel, Nicolaus & Co., Inc.: Just one last thing and it would be the unfunded C&I loan backlog at the quarter end. What you're seeing, I guess, in your discussions with businesses in terms of borrowing intentions, it doesn't look like there's been a drawdown on commercial DDA at this point, which would be sort of a precursor about that. And finally, the C&I draw rate, you mentioned that it was about steady but I was just wondering where it was.

Yes, the utilization rate is also almost unchanged from the last quarter. We're just under 42%. I think we were right at 42% last quarter. Now just in the last couple of weeks though we have seen more discussions of customers indicating, actually, building up the inventories and so forth. So it's still anecdotal at this point, but we feel we might be seeing some signs of increased borrowing in the upcoming quarter.

Your next question comes from the line of Erika Penala from the Bank of America Merrill Lynch.

I wanted to follow-up on both of the Ken's questions regarding capital management priority. With regards to M&A, could you give us a sense of where you're looking or where you're poking around and what size, in what size range? And also, sort of has the propensity to sell increased from some of these smaller properties and also give us a sense of what pricing is like in the markets that you're looking at?

Great. Erika, this is Don. And as far as the size range that we're looking at, 1, looking in our Midwest, we're not looking to use acquisitions for us to enter into new markets. And so that's important and that's a key criteria for M&A activity. Second, as far as size, we're really looking for smaller transactions whether that would be in the $0.5 billion or the $2 billion type of range in our book. And again, we like the model of being able to over time aggregate several smaller transactions and help to fill out our existing footprint from that type of activity as opposed to looking at much larger transactions or institutions. I mean as far as the propensity to sell, you had definitely hear about those types of comments from investment bankers. I would say that we haven't seen a lot of transactions announced in our footprint and haven't had a lot of assisted transactions in our footprint as of late. And while we still believe that this is an opportunity for growth for us over time, that we're still very focused on growing our core book of business.

What about pricing? Have you had any sense of where the conversation -- is that what's keeping the conversations from picking up in your footprint?

I don't know if there is pricing or not because we obviously haven't seen any transactions take place really in our footprint. So it's not a good benchmark yet.

Okay. And my last question is just a clarification question. The $260 million that you mentioned in terms of the per quarter range for PPNR, that does include the Durbin impact if it's passed as is?

That would include our current estimate as far as the Durbin impact for the second half of the year. That's correct.

Your next question comes from the line of Matt O'Connor from Deutsche Bank.

This is actually Adam Chaim calling in for Matt O'Connor. You guys had previously mentioned you had a target level of 15% of earning assets for the securities portfolio. How should we be looking at the overall trajectory of earning assets? I guess if loan growth continues, should we be expecting most of that to be offset with security sales?

Our expectation prospectively would be that our loan growth would be funded through core deposit growth. And so we would expect to continue to see those two offset each other and not have a significant impact on the overall investment book. But we do believe that our investment portfolio is higher than where we would like to see at long term as a percentage of our total earning asset base. And initially, we think that loan growth will be funded through that deposit growth.

Okay, great. One other question. On the auto loan side, it looks like growth has slowed a bit over the last couple of quarters. And also, it looks like FICA has been trending down as well over this period, not too meaningfully though. And you guys have also been moving into more, I believe, used car loans versus new car loans. Are competitive pressures behind this? And where can we expect the overall auto loan portfolio to top out as a percentage of the overall loan portfolio?

Good question. As far as the indirect auto business, in the third quarter of last year, we had a $1 billion of originations, and fourth quarter of last year and first quarter of this year led $800 million of originations. If you would assume a two-year average life for the auto loan, which is about where we're at and imply about a $6.4 billion portfolio, so with the slowdown and as far as the growth rate over the last couple of quarters is we're getting closer to that matured portfolio level at these types of origination volumes. And so you shouldn't expect necessarily the same type of incremental growth rates that you were seeing throughout 2010, 2011, if the origination volumes are in that level. As far as our origination quality, we are very pleased with that. We haven't seen any significant change in FICO scores for origination levels. But we do see from time to time, mix changes as far as the new car versus used car but the credit quality characteristics of the used car portfolio is really right in line with what we're seeing for new car. What you might see there as far as mixed changes in when some of the captives get more engaged in some of the originations. And so that may fluctuate a little bit the percentage new versus used.

Okay, great. And I guess as a percentage of the overall portfolio, what were you comfortable in terms of the size of the auto portfolio?

We're very comfortable with where it is today, which is at 15%, and we want to keep it below where it was at one point in time of 33%. But I think if we're in that 15% to 20% of the portfolio, we really like the credit profile of this book. We like the predictability of the cash flows, and we like the incremental yield that we're receiving for these originations and it's a much better use of funds for us than other options we have at this point in time.

Our next question comes from the line of Paul Miller from FBR. Kevin Barker - FBR Capital Markets & Co.: This is Kevin Barker filling in for Paul Miller. Just had a question about loan growth and some of the -- are you seeing your pipeline increase or anything, maybe some stabilization in the CRE portfolio? Is there any markets in particular where CRE may be starting to see some type of bottoms? I know we're seeing a lot of more securitizations out there in 2011 and maybe that may be contributing to it. But is there anything you see on your end and maybe the pipeline increasing?

We're not trying to grow the book. We're trying to shrink it. And so our stance with commercial real estate has been one of a combination for our core customers, working with them, trying to be supportive, but in aggregate, expecting to reduce that concentration. And we expect to be in that mode through this year. Dan, you want to add in?

No, just -- we are trying to support our core customers. And so in the first quarter, we actually had a few more originations for a select group of folks. So we're trying to balance our overall goal of reducing the exposure but still supporting the core book and we're continuing to do that. Kevin Barker - FBR Capital Markets & Co.: Maybe now you're seeing plenty of people out there looking to take down some of that CRE? Are you seeing prices get better in particular areas? Is there anything outside what you're trying to shed off the portfolio?

In markets, I mean, are clearly stabilized from where they were in say, '09 and early '10. And I would say that's across the board with land or stranded development constructions still being the two toughest categories. But it's certainly getting better, and there's varying levels of activity depending on product and location.

We'll turn the line of Dave Rochester from Credit Suisse. David Rochester - Crédit Suisse AG: I had a couple quick ones on the margin. You highlighted you had a good chunk of high-rate CDs in the second half repricing, and I was just wondering where you're pricing the bulk of your CD product today? Are you below 1% on most of that money that's rolling?

Yes, we're well below 1% on most of the new money. And the money that's rolling in the second half of this year really relates to 3-year products that was put on the balance sheet at the time of some of the financial changes back in '08. So we have not typically been originating a lot CDs in the 3-year bucket right now. David Rochester - Crédit Suisse AG: And so you would anticipate most of that to roll at 12 months or less, I would imagine?

That's correct. David Rochester - Crédit Suisse AG: And on the auto side, you talked about growth and whatnot. I was wondering if you could talk about the blended rate on the products you saw in the first quarter and if that changed meaningfully from the fourth quarter?

The blended rate as far as the new originations on indirect auto? Anthony Davis - Stifel, Nicolaus & Co., Inc.: Exactly. The yields you're getting.

We tend to look at that as far as a credit adjusted spread on the originations. And so it's been very much in line with where we've been over the last several quarters, which taking the yield minus our cost of funds that we assigned to that business, which is close to securitization rates minus the credit cost associated with that, and we're looking at a 2.25% type of net credit adjustment spread. And that's right in line with where it has been over recent quarters David Rochester - Crédit Suisse AG: And just one last one real quick. In terms of your loan growth guidance, are you expecting to see just a similar run off rate that we've seen in the non-core CRE over the last, let's say, couple quarters, the $200 million each quarter, for the rest of the year?

Yes. In that range, $200 million to $300 million would probably be a good estimate.

And your next question comes from the line of David Konrad from KBW. David Konrad - Keefe, Bruyette, & Woods, Inc.: I guess all my questions have been asked and answered, but just to follow-up, I guess, on the indirect auto. Some of your competitors this quarter said that competition was getting so aggressive that they kind of pulled away from the growth aspects. But from your comments from the last question, it doesn't feel like you guys are seeing that type of competition and pressure in your markets. Is that correct?

I think we saw a really step up in the fourth quarter where we saw some of the captives and others get more involved, and that's why our production levels came down from where they were at that time. And we again have been very pleased with the production levels and the quality and also the pricing.

Your next question comes from the line of Brent Erensel from Portales Partners.

Thanks. Brent Erensel from Portales. I've got a question with regard to the second half, and it's relating to reconciling the expense management, the CD repricing, which are going to be beneficial and then the tax rate and Durbin, which are not. And it's hard to see earnings going up much from here, just putting all those four things together. Can you -- without giving guidance, I mean what's your reaction?

I think we will have some headwinds associated with Durbin if it does pass as originally or is implemented if it's been passed. I would say that our guidance as it had been that we expect pretax, pre-provision earnings in the $260 million to $265 million range for the full year. We've provided a reconciliation or walk forward of our $241 million to roughly at $256 million or $257 million level for the current quarter if you back up the seasonal impacts from the day count. And so that $260 million to $265 million, we would imply a relatively small step up and we'd be relying on areas of growth, including balance sheet growth and the income growth to help offset or minimize the impact of Durbin. And so that would be where we can get comfortable with continuing to provide that level of guidance.

Do you see a provision coming down meaningfully from current levels?

What we've provided for our guidance there, again, is continued improvement as far as non-accrual loans, with criticized, classified and other measures as far as credit quality. We have not provided any more specific guidance as to where we think the provision expense will go prospectively. Dan, any thoughts on that?

No, we are moving hopefully towards a normalized environment. And again, all of our credit metrics are going in the right direction. We analyzed the provision in detail each quarter, and that's all I have to say in that.

Your next question comes from the line of Arthur Winston from Pilot Advisors.

Thank you. The fastest-growing parts of financial statements are the shares outstanding and the expenses. And now we hear that's probably not new news that we're looking for our acquisitions. I'm just curious, is the plan to give out shares to make these acquisitions? And a second question, is there anything afoot to give the shareholders a break and kind of curb or actually reduce the number of shares outstanding or the expenses to just give them a better return?

Again, as far as our comments on M&A that we have said that we want to continue to focus on the core first. And to the extent that there are opportunities for us to grow through acquisition in our footprint, we'll evaluate those. And we want to make sure that we are focused on making sure that we have the appropriate return for our existing shareholders and make sure that have the appropriate returns from those types of activities when and if they do come through. So again, I think that is a priority for us. And as Steve talked earlier that we believe with the growth in our capital and the strength of our earnings position that we're now in a better position to start to evaluate future capital management actions and could include changes to our dividend but we haven't provided any more clarity or guidance on that.

Your next question comes from the line of Terry McEvoy of Oppenheimer. Terence McEvoy - Oppenheimer & Co. Inc.: In the press release, you go through five areas where you saw C&I loan growth. I was wondering if you could just maybe put some at the top of list and the bottom of the list. And in terms of the regions where there was non-growth, where you did not see growth in the first quarter, was it simply because they are not in some of those specialty businesses, suggesting maybe that middle-market lending was closer to the bottom of the list in terms of growth last quarter?

Terry, I wouldn't draw any conclusions about the two geographies that didn't have middle-market growth during the quarter. We'd expect them to come through with some variations. We were very pleased in aggregate by the middle-market activities. And when we say middle-market, for many banks, it should be considered lower middle-market. Good traction and that's predominantly the type of lending that fueled the expansion that was referenced in the press release and elsewhere. Terence McEvoy - Oppenheimer & Co. Inc.: Then just one last question. On the mortgage business, have you looked to cut costs? Have cost-cutting plans been put in place, or is there an opportunity in future quarters to bring down some of your mortgage-related expenses?

We took action on mortgage, frankly, before we even had the earnings release at year end. So there's always room for improvement on expenses, and we'll keep working it. But our people actions and overhead reductions were dealt with, I think it was the second, certainly the third week, in January.

Your last question comes from the line of Greg Ketron from Citigroup.

Just a couple questions, one on the Durbin amendment. If it passes as it's drafted, do you have a sense for how much of that impact you can cover in other places as we move forward?

What we've disclosed is that using that $0.07 per transaction item, I think, is a $45 million thereabout gets to the second half of the year's revenue. And what we would suggest as far as how we're covering that is that we think that we do have a lot of areas that are contributing to our growth prospectively that we think net interest income will grow from the first quarter led by continued growth and loans and overall balance sheet expansion. And we saw in the first quarter, saw some good growth in brokerage revenues and trust revenues. And those are just indicators of some of the initiatives we've taken on to enhance or cross-sell throughout our customer base. And we think that you'll see some of the similar effects from the treasury management activities and others that will help drive the income. So we don't have any specific or explicit plans to offset Durbin with any other side fees or other adjustments to service charges for our customers at this point in time.

Great. And one last question, Don, you talked about you had reduced your swap position from $11 billion down to $7 billion? And assuming rates, if we follow the forward curve, they go up in 2012. How would you anticipate managing the swap book going forward in light of rates going up in like 2012? And what kind of impact could that have on commercial loan yields and the margin?

Right. As far as where we'd take that swap book, it depends on, 1, what we can do organically on the balance sheet. And 2, we would want to continue to position our overall net interest income at-risk position. And you'll probably see later in the slide deck and I think it's Slide 39 in the appendix, we have taken a little bit more of a position here showing that we're asset sensitive for an increase in rates prospectively than what we have in over last several quarters to the extent that we want to continue to maintain that. We've allowed swaps to mature prospectively but I would say that our initial thoughts are more continuing just to manage the overall rate position which could result in some slight fluctuations in that swap position and should have a less of an impact prospectively as far as the margins or reported deals on the commercial loans.

Okay. But do you anticipate you can transition through the swap book into rising rates without getting any negative impact to the net interest margin?

That's correct because if it's a rising rate by allowing those swaps to mature, it will position us to better increase our net interest income going forward because it eliminates that received fixed portion of the swap book.

And this concludes the Q&A portion of today's call. I'll turn the call back over to the presenters for any closing remarks.

Thank you, Sarah, and thank you everybody for participating again this quarter. If you have follow-up questions, please give myself, that's Jay Gould, or Todd Beekman a phone call. We'll be happy to continue to carry on the dialogue. Thanks for participating. Bye.