Good morning. My name is Jackie and I will be your conference operator today. At this time I would like to welcome everyone to the Huntington Bancshares’ First Quarter Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. [Operator Instructions] Thank you. Mark Muth, you may begin your conference.

Thank you, Jackie. Welcome. I’m Mark Muth, Director of Investor Relations for Huntington. Copies of the slides we will be reviewing can be found on our IR website at www.huntington.com. This call is being recorded and will be available as a rebroadcast starting about one hour from the close of the call. Slides one and two, notes 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 will reference non-GAAP financial measures. And in that regard, I would direct you to the comparable GAAP financial measures and a reconciliation to the comparable GAAP financial measures within the presentation, the additional earnings-related material we released this morning and the related Form 8-K filed today, all of which can be found on our IR website. Turning to slide three, today’s discussion, including the Q&A period, will contain forward-looking statements. Such statements are based on information and assumptions available at this time and are subject to changes, risks and uncertainties, which may cause actual results to differ materially. We assume no obligation to update such statements. For a complete discussion of risks and uncertainties, please refer to this slide and material filed with the SEC including our most recent Form 10-K, 10-Q and 8-K filings. As noted on slide four, the presenters today are Steve Steinour, Chairman, President and CEO of Huntington and Mac McCullough, Chief Financial Officer. Dan Neumeyer, our Chief Credit Officer and Rick Remiker, our Commercial Banking Director will also be participating in the Q&A portion of today's call. Let’s get started by turning to slide five. Steve?

Thanks Mark. I'd like to thank everyone for joining the call today. It's an exciting time for us at Huntington. Our first quarter results demonstrated the strength of our franchise and business model in a challenging external environment. We're very pleased with the results and believe that the first quarter sets us up well for the remainder of the year. We're focused on finishing 2015 strong and positioning for continued success in 2016 and beyond. Our current focus is on improving our already strong competitive position in consumer banking, small business and middle market banking including the specialty lending verticals by improving sales execution, developing new products and deepening customer relationships through OCR. Our commitment to smart accretive acquisitions was on display during the first quarter as we successfully completed the acquisition of Macquarie Equipment Finance. We also announced the continued enhancement of our full-service branch network in a cost-efficient manner with the addition of 43 new in-store branches in Michigan. Slides six and seven show some of the financial highlights of the 2015 first quarter. Mac will discuss the details shortly, but I wanted to highlight a few of the items that I believe distinguish Huntington and illustrate our strategic execution. Good core balance sheet growth, along with strong performances from mortgage banking, and capital markets have set the tone for a solid quarter. We reported net income of $166 million a 11% increase year-over-year, an EPS of $0.19 a 12% year-over-year increase resulted in a 102% return on assets and 12.2% return on average tangible common equity. Total revenue increased 2% year-over-year which includes the impact of $17 million in securities gains in the first quarter of 2014 driven by 7% increase in the net interest income tied to strong balance sheet growth. Average loans and leases increased…

Thanks Steve and good morning everyone. Slide eight is a summary of our quarterly trends and key performance metrics. Steve touched on several of these, so let's move on to slide nine and drill on to the details. Relative to last year's first quarter, total revenue increased 2% to $707 million. As Steve mentioned, this includes the impact of $70 million securities gains in last year's first quarter. Spread revenue accounted for the entire increase as net interest income grew by 7%. Driving net interest income growth was a 11% increase in average earning assets. Loans accounted for the majority of the balance sheet growth increasing 10% over the previous year. Remainder of the balance sheet growth came in the securities portfolio as we continue our preparation for the upcoming Basel III liquidity coverage ratio requirement. The net interest margin compressed 12 basis points year-over-year to 3.15%. This decrease reflected a 15 basis points contraction and earning asset yields partially offset by 4 basis-point decline in funding costs. On a linked quarter basis, the net interest margin compressed 3 basis points exclusively related to lower earning asset yields. Fee income for the 2015 first quarter was $232 million a 7% decline from the year ago quarter. The decline was primarily driven by $17 million decrease in securities gains. The overall fee income decrease we continue to see the benefits of consumer and commercial customer growth as both electronic banking and capital markets income growth was strong year-over-year. Electronic banking increased 16% while capital markets fees increased 51%. Capital markets had a particularly strong quarter primarily driven by customer interest rate derivatives revenue. I also want to highlight a particularly strong quarter for mortgage banking. Mortgage banking income grew 64% on a linked quarter basis and mortgage pipelines remained strong and…

Thanks Mac. Turning to slide 16, as I alluded to in my opening remarks, our fair play banking philosophy, coupled with optimal customer relationship or OCR, continues to drive new customer growth and improve product penetration. This slide illustrates the continued upward trend in consumer checking account households and over the last year consumer checking account households grew by 9%. The first quarter was up a little over 1% from the prior quarter. Our strategy is not just about market share gains, but also gains in share of wallet. We continue to focus on increasing the number of products and services we've provided customers knowing that this will translate into revenue growth. Our OCR cross-sell goal of six or more products and services crossed the 50% mark this quarter up 202 basis points from a year ago and that's on the entire book. Correspondingly our consumer checking account household revenue for the fourth quarter is up 9% year-over-year. As you can see on slide 17, commercial relationship growth has returned as we work through the impact of the changes we made in our business banking checking products that impacted approximately 10,000 of lower balance accounts. Commercial relationships increased 5% year-over-year our four or more products OCR cross-sell for commercial relationships improved to almost 43% this quarter up more than 3% from a year ago. Slide 18 shows our current year-to-date operating leverage results. As I noted during last quarter's earnings conference call, year-long positive operating leverage is the long-term strategic goal for Huntington and we remain committed to delivering on that goal for 2015. One thing I want to note in the 2014 first quarter we realized $17 million in securities gains as part of our efforts to reposition the portfolio in preparation for the upcoming Basel III LCR rule…

Thanks Steve. Operator, we will now take questions and we ask that out of courtesy of your peers, each person ask only one question and one related follow-up question. And then if that person has additional questions, he or she can add themselves back into the queue. Thank you.

[Operator Instructions] Your first question comes from the line of Scott Siefers with Sandler O’Neill. Your line is open.

I was hoping you could just spend a quick second expanding on just the sort of the nature of the One Credit slipped into non [indiscernible] that was commercial, but just any additional color that you could add? And then just sort of the follow up would be, but not kind of Steve you mentioned a couple times the more selective behavior on commercial and C&I growth, so just any additional color on the trends you’re seeing what’s causing there may be temper your growth there?

Sure, good morning Scott, this is Dan. So on the One Credit it was still steel related and so we brought it into NPA, we actually have recognized what we think is the potential of exposure, so that is included in the 20 basis points of charge-offs that we recognized this quarter, so we feel we have the risk in that credit behind us. With regard to the portfolio more broadly and what we are seeing, clearly the market has as we've been saying for several quarters has been very comparative and so we still have a good deal pipeline, but we are being more selective. Our bankers understand our risk appetite. They are self selecting in certain cases to not bring deals forward, but we’re looking at every deal very closely. We have our discipline in mind and so we’re sticking to those disciplines and still it is achieving some pretty good growth rates. But overall the market continues to be very competitive in both structuring and pricing and that’s really across the portfolio.

Okay and then so, there is not one for example specific segment geography that’s worse than the rest, it is just a more, perhaps a more conservative posture overall.

Yes and I would say not more conservative, I mean we are sticking to our discipline. We've had our risk appetite and the corresponding parameters in place for long time and we're operating within those. So as the market gets more aggressive, it's going to be, there are going to be more cases, where we are going to opt out.

Yes, okay, all right that makes sense. Thank you very much.

Your next question comes from the line of John Pancari with Evercore. Your line is open.

I’m John Pancari of Evercore. Quick question on back to the loan growth commentary that you just gave, how should we think about the peak of loan growth given the likely moderation as you step away from some of these transactions, is it fair to assume that we see mid single digits or even low single digits given that as we move through '15.

Hi, John, it’s Mac. I would suggest that we will see some moderation in C&I and CRE going forward. I’m not going to put a growth rate out there, but clearly this isn’t a deal flow issue, this was just a risk appetiter discipline issue and we’re still looking at same number of deals, but we’re applying the same lens and the same filters to how we think about whether or we want to bring these deals into our book or not. So, as Steve mentioned, we’re comfortable. As it relates to our plan for 2015, we anticipated this environment and we are going to have positive operating leverage for 2015. So all these things factor into how we are going to perform and what we believe the expectations are for 2015.

Okay, great and then separately on the Auto, I was wanted to see if you could give us a little bit of color on the potential gain on sale margins that you are targeting on the pending auto securitization and do you still plan on pursuing two securitizations in ’15? Thanks.

So we do think that gain on sale is probably going to be about 50% of this work level relative to the last deal that we did and it's in line with our expectations, it's in line with how we think about this from the budget or a forecast perspective. We are continuing to evaluate the need for a second securitization in 2015, we’ve seen some decline in growth in the indirect space and we’re evaluating whether we need to do that late in 2015 or early in 2016, so that is still under consideration.

Okay and then lastly just on the deposit service charges they were down 4% year-over-year, can you just I'm not sure if you gave any color on that, just assuming you'll give us some detail?

Yes, so we made a change in the third quarter of last year related to fair play strategy just giving customers more time to have their deposits account against their balance and that basically cost us about $6 million a quarter starting in the third quarter of 2014, so we haven’t quite swum through that yet, but that is the impact.

Okay, thanks. Appreciate for taking my questions.

Thanks John.

Your next question comes from the line of Mat O’Connor with Deutsche Bank. Your line is open. Mathew O’Connor: Good morning.

Good morning, Mat. Mathew O’Connor: I was wondering if you could provide any of the financial impact from the equipment finance deal that you did. I would assume that’s accretive to earnings since your financing it with cash, but any metrics or figures around that would be helpful?

Yes, Mat it’s Mac. So we haven’t given a lot of details around the transaction. I will say that it is a very high quality, very nice growth rates and very high return on capital business. We have said that the yields on these assets are going to be the highest yields on our balance sheet and it's just an extremely well run business by people that we know and have a lot of respect for. So the return on tangible common equity is at least double of what we report as a company, so extremely good fit with our existing business. We are going to be able to expand the product set into business banking, in the small business and in the healthcare vertical that Rick runs, so really nice complimentary business for us. Mathew O’Connor: And then are there any upfront costs in terms of the deal whether its retention or setting aside the loss reserves, anything that we should look for next quarter on that?

So we did recognize the $3.4 million in the quarter related to integration and deal process associated with Macquarie deal. We will see some additional expense the reminder of the year. It is not significantly material relative to the size of the transaction and really no reserve impact this quarter. Mathew O’Connor: Okay, alright so it is all in the run rate here.

It is. Mathew O’Connor: Okay, alright that’s helpful. Thank you.

Thanks Mat.

Your next question comes from the line of Steven Alexopoulos with JP Morgan. Your line is open.

Hi, good morning guys.

Good morning Steven.

Regarding the linked quarter decline in the professional services fees ex the Macquarie deal, could you help us think about is that a permanent step down just giving your experience and going through CCAR and how should we think about that ramping through the year?

Yes, I think it is a bit lumpy, as we think about some of the professional services we use for CCAR. I think that probably a pretty decent run rate as we think about going forward on average, but again there is going to be some volatility in that line.

I mean, do you expect it to ramp the way it didn’t the prior year, I think you were almost 16 million in the fourth quarter or should we be less than that would be…?

It will be less than that. Remember, we had some expense associated with some strategy work that we did late last year that we’re not going to repeat in this year.

Okay and then I just wanted follow up on John’s question, can you just remind us, are you, do you typically include the gain on auto securitizations in your calculation for positive operating leverage? Thanks.

We do include those gains in the operating leverage calculation, so that obviously will be in the second quarter fee income line and historically we included those gains in that calculation.

Okay, thanks for the color.

Thanks Steve.

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

Hi, great thanks. A question on expenses, just want to make sure that we are actually using the right base number, because I saw that you reiterated your 2% to 4% growth and back at the one time, as I get 2014 expenses at $1.818 billion is that the right number that you’re growing 2% to 4% on ? And kind of the followup also is just, I think you said you exclude the Macquarie expenses from that, but what are the Macquarie expenses that we should add to that number? Thanks.

Yes, so I think the way to think about the 2014 base is, you should take 2014 reported and exclude the cyclical items that we identified for the full year, so remember we had acquisition integration expense associated with Camco and the Bank of America branches. And we also had some franchise repositioning expense in the third and fourth quarters last year, so I think that it's important to think about it from that perspective. We have not disclosed any expense or revenue around Macquarie. And we won't be doing that on this call, but obviously as we think about acquisitions going forward and what happens to us in 2015, but the 2% to 4% is based on 2014 excluding those acquisition items.

Okay, so I guess if you’re guiding to a number that we cannot replicate, meaning just with the Macquarie expenses we should basically start with the 2% to 4% and then add some more ambiguous number for other expenses, I mean is that the message that you are trying to convey with the guidance that is something more than the 2% to 4%?

It will be more than the 2% to 4% perhaps. I mean the 2% to 4% is the range that we're comfortable with in terms of growth for 2015 and we do need to add the Macquarie expenses on to it. Obviously we are getting revenue with Macquarie as well and Macquarie has positive operating leverage as we think about the business that we're bringing into - in the income. So it should be additive to that when you think about positive operating leverage in 2015, I think the message that we’re trying to convey is that even exclusive of an acquisition that could help us to achieve positive operating leverage. We are committed to positive operating leverage on the core, based upon the way we set the year up relative to the 2014 base.

Got it and sorry, did you provide the revenue addition for Macquarie or is that and do we know that yet?

We didn’t provide that no.

Okay. Alright, thank you very much.

Thanks Ken.

Your next question comes from the line of Bob Ramsey with FBR Capital Markets. Your line is open.

Good morning guys. I know talking about Macquarie, you mentioned that the ROEs on our business are double with the standalone Huntington's ROE’s are, just curious if that’s also true on an ROE basis, if you kind take capitalization out of the equitation.

It’s a great question. I’m not quite sure I’ve looked at it that way. Yes pretty robust on ROEs, but it is a very high ROE business. So I will say it’s got to be pretty close to that.

Okay is it I mean is – do you allocate a materially different amount of capital to that than your overall business or I guess it’s in the same zip code?

Yes it's in the same zip code and the ROAs are definitely accretive to our ROAs, so it’s a very high return business and part of that has to do with the deal, the leases themselves and certainly it’s the credit quality.

Okay and then thinking about that piece of it as well that the yield piece as you all put that $800 million of higher yielding loans on the balance sheet and $1 billion moves off of lower yielding auto loans that gets sold. How should we think about net interest margin in the second quarter?

We’re going to continue to see some pressure on the margin if you take a look on a linked quarter basis we’re down 3 basis points and 2 basis points of that was really due to adding securities during the quarter. Where we think we need to be from an LCR perspective we’re at about 90% right now. And so the incremental add in the securities book for LCR is going to be minimal. I will tell you that we’re tracking the margin exactly as we expect it to see for 2015. So even though, we’re seeing the contraction it will continue until we see some increase in interest rates. This is all within our expectations as it relates to the positive operating leverage, revenue growth and performance for 2015.

Okay, so even with the Macquarie higher yielding loans coming on the second quarter you would expect contraction in the second quarter or you just mean from a bigger higher level you have 2015 the direction is now and outside of the deal?

I would say yes to both.

Okay, all right thank you.

Great contraction Macquarie, second quarter, yeah.

Your next question comes from the line of Erika Najarian with the Bank of America. Your line is open.

Hi good morning.

Good morning, Erika.

Good morning.

I just wanted to ask a follow-up question, I’m sorry to ask another question on the guidance, but as I’m thinking about the base for Steve, for 2014 and we think about revenue growth, it does include a $17 million in securities gains, but excludes that MSR activity?

That would be correct.

Got it and this is a follow-up question to what the bottom line of question. You mentioned Steve in your prepared remarks that you’re going to invest the $125 million to $150 million per month in cash flows into HQLA and I think I thought that the incremental add beyond that is going to be minimum. Did I catch that right and if so that minimal add would be how much and what would it be funded by?

You did catch it right Erika. We added about $500 million in the first quarter. The monthly cash flow is going to give us between 125 and 150 that will substitute in as well. And net beyond that as Mac said was modest it’s around $250 million. So we had started the year and reference a number of up to $1 billion. It looks like it’s going to be at 750 now as we see the cash flows adjusting and 500 is already in.

Got it and just as a follow-up to that would it be continue to fund by long-term debt and brokerage CDs and what would this split be?

Well the increment is not that large, so we got a variety of funding sources we certainly could do a debt issuance later this year, but not committed. We had very good core deposit growth through the first quarter and looking to obviously keep as much core funded growth in deposits as possible moving forward.

Got it, that’s helpful. Thank you so much.

Thank you.

Your next question comes from the line of Ken Usdin with Jefferies. Your line is open.

This is actually Josh in for Ken. Thanks for taking our questions. Could you just speak to the potential for continued asset acquisitions. And the extent to which you’re seeing new opportunities out there?

Josh, this is Steve, we have – we continue to look at different opportunities and as we’ve said over the years our preference would be to look at banks and non-banks in our footprint, but we’re prepared to look at opportunities that sort of are on the shoulders of our existing footprint. There’s a level of discussion that’s in line with what we saw last year and so don’t see a huge spike in activity at this point.

Okay thanks, that’s all we have.

Okay, thank you.

Your next question comes from the line of Bill Carcache with Nomura. Your line is open.

Thank you good morning. Can you talk about the attractiveness of auto securitization market pricing here versus funding directly from your balance sheet and perhaps if you could also remind us of the primary factors that are underlying your decision to retain versus sell?

Yes hi, it’s Mac. The primary factor driving us to consider securitization would just be concentration limits in our portfolio. We’ve established these limits related to the amount of order that we run on our balance sheet and what’s really driving this securitization in the second quarter is starting to bump up against the level that we just want to get back within I guess given us through to make further decisions later in the year. So it’s not really an economic decision. Obviously economics do play into it, but from a concentration perspective that would be the first filter we would take a look at and then from a liquidity perspective just taking a look at funding sources, and cost of funding and loan deposit ratio, those types of metrics would be a secondary consideration. And then I would put really economics as being the third consideration.

Okay and yes there’s no retained interest the way that they are structured?

Well off balance sheet for treatment that’s correct.

Right. Okay and I’m sorry and then can you talk about still in terms of the relative attractiveness from a pricing perspective is there any kind of benefit versus funding directly from your balance sheet or is just overwhelmed by just a concentration limits that you described?

Yes, it really is been driven by the concentration issues.

Okay and then to the extent even where you would be willing to take perhaps what’s a less attractive pricing, could you give a little bit of color on what the pricing looks like and that’s my last question. Thanks.

Yes I mean, relative to keeping the loans on our balance sheet there certainly is an economic impact here it’s fairly a reasonable number in terms of the trade off that we’re making, but we’re giving up revenue by going to the securitization. So again it’s not the primary driver of why we’re doing this. We certainly take that into consideration, but we made a commitment and we've got limits around probably thinking about concentration on the balance sheet.

Understood. Thank you.

So our next question comes from the line of Andy [indiscernible] Your line is open.

All my questions have been answered. Thank you.

Your next question comes from the line of Geoffrey Elliott with Autonomous Research. Your line is open.

Oh hello there, just a question on the credit side in the fourth quarter you talked about a couple large basis related to natural resources and manufacturers papers related to natural resources and manufacturers of commercial vehicles this quarter, there is large case in the is real i on a large case in the steel industry, how do you think about when you still try are identify this as trend both of them just being a series of isolated large incidents?

Yes well, we this is Dan, we evaluate the inflow of new criticize loans every quarter and we’re looking at trends that might be developing in these larger cases they were kind idiosyncratic company specific, industry specific and one of the cases the natural resources credit we've actually already had a positive outcome on that deal. So, what we're trying to do is identify the credits very early in the process so that we have more options available to us for resolution and that has been to our advantage. We're finding that we bring these things in early, assess our options and so we've been able to move these problem loans through the system very quickly generally with good outcomes. So we are seeing, I think a fairly steady flow of problem credits. I think part of that is driven by the fact that the market has been quite aggressive going on several years now, but we're very comfortable with what we're seeing. We do not see trends developing but I obviously watch that very closely.

And how do you think about the health of the corporate sector more broadly I guess, your footprint is your exposure to lots of manufactures and exporters and I guess other macro kind of is conflicting and some obviously enterprises, but strong dollar they had been for exporters and how your discussions with those corporate clients are impacted by that going?

Well, we have those conversations with all of our customers. We've looked at our portfolio and done assessment of those that have good portion of their volumes which are export related. We've also looked at those companies that have a large portion of their cost of goods that they are getting from overseas and there is positive and negative done on both sides of that. But in total we remain comfortable. We are obviously concentrated in the Midwest, so we have a big manufacturing concentration. But that's also what we know, and are very comfortable with and are close to the industries that we serve. So all-in-all I think on the whole we feel good about where our customer base is situated and many of them over the last few years have been working and bolstering their balance sheets and getting in good shape and so we're quite comfortable.

Thank you.

[Operator Instructions] Your next question comes from the line of Chris Mutascio with KBW. Your line is open.

I don’t know if this question is for Mac or for Dan it is on the same lines on the credit quality. If I understand the released actually the one large credit that one to NPA that's roughly $35 million or majority of the $35 million to $37 million year-over-year increase in NPAs. But on a sequential quarter basis, I think NPAs were up more like $65 million. I know it's all from a low base, but I wondered if I can get some more color on the residual, difference between that $35 million on a year-over-year basis and the $65 million versus other types of large credits within the sequential quarter increase and then just a one commercial credit you outlined or is it smaller once and if so, any specific industries?

Yes, so of the $65 million quarter-to-quarter increase this credit did represent the majority of that. We're not going to get specifics in terms of dollar amounts, but it did represent the majority of that increase and again we have recognized what we believe is the loss potential in that credit. We're always going to have a flow of additional deals, but there are no other large credits that drove that increase.

Okay, thank you.

And no particular industry, so no emerging sort of industry risk.

Correct.

Thanks Chris.

Thank you.

There are no further questions at this time. I'll turn the call back over to the presenters.

So thank you, this is Steve. We're grateful for your attendance. We're obviously pleased with our performance in the first quarter. Results reflected the ongoing disciplined execution of our strategies and the strong competitive position that we enjoy today at Huntington. We've received ongoing recognition around superior customer service and that helps further separate our brand from our peers. We continue to gain market share and we're improving our share of wallet in both of our customer segments. We produced revenue growth in a challenging environment. We remain focused on pricing and underwriting discipline as you heard. We've also completed the acquisition of Macquarie Equipment Finance and look forward to integrating their business into our franchise. And finally, our Board and the management team, we're all long-term shareholders, so we remain focused on managing the risk, reducing volatility, while yet investing for top line growth and delivering positive operating leverage consistent with our expectations of long-term performance. So, thank you for your interest in Huntington. Have a great day.

Ladies and gentlemen, this concludes today's conference call. You may now disconnect.