Huntington Bancshares Acquires Rival Sky Financial for $3.6 billion

Huntington Bancshares Incorporated (Nasdaq: HBAN) and Sky Financial Group Inc. (Nasdaq: SKYF) announced Wednesday the signing of a definitive agreement to merge the two companies in a stock (90%) and cash (10%) transaction valued at approximately $3.6 billion.

Under the terms of the agreement, Sky Financial Group shareholders will receive 1.098 shares of Huntington common stock, on a tax-free basis, and a taxable cash payment of $3.023 for each share of Sky Financial Group. Based on the $24.77 closing price of Huntington’s common stock on December 19, 2006, the transaction values each share of Sky Financial Group common stock at $30.22, a 25% premium to its closing price of $24.17.

Huntington expects the transaction to be immediately accretive to 2007 earnings, excluding one-time charges, and is expected to result in approximately $115 million in annual cost savings.

On a pro forma basis, Huntington will have 756 offices, 1,384 ATMs, and deposits of approximately $38 billion as of September 30, 2006. In Ohio, Huntington will operate 449 offices, 819 ATMs, with deposits of approximately $25 billion as of September 30, 2006, on a pro forma basis.

The merger was unanimously approved by both companies’ boards of directors. It is expected to close early in the 2007 third quarter, pending customary regulatory approvals, as well as the approval of Huntington’s and Sky Financial Group’s shareholders.

"This merger is consistent with our conviction that Huntington can create shareholder value by participating in consolidation in the Midwest and lowering costs and increasing customer convenience," said Thomas E. Hoaglin, Huntington’s chairman, president, and chief executive officer. "Importantly, it provides significant benefits to Huntington’s shareholders and customers. For shareholders, this transaction is immediately accretive to 2007 earnings and is expected to add 4% to earnings in 2008. Further, the value of the expense efficiencies that can be gained will exceed the premium we are paying."

<!–PAGEBREAK–>"As a result of the merger, Huntington will become the 24th largest domestically-controlled bank in the country," he continued. "In Ohio, we will be the third largest bank in deposits with more banking offices prior to consolidation than any other bank, on a combined pro-forma basis based on data as of September 30, 2006. We will rank #1 in deposit market share in Columbus, Toledo, Youngstown, and Canton, and our market shares will be strengthened in Cleveland and other Northeast and Northwest Ohio markets. We will also become the third largest bank in Indianapolis, one of the faster growing Midwest markets. In addition, Sky Financial Group provides entry into new markets including Western Pennsylvania and Pittsburgh. We look forward to welcoming Sky Financial Group’s customers and associates to the Huntington family."

"Retaining Sky Financial Group’s customers and local management are key objectives," Hoaglin noted. "We have known Sky’s senior executives for a number of years and their addition strengthens Huntington’s overall management team. A hallmark of Sky has been their success in developing a strong sales culture, and we expect to leverage this expertise. Their culture of local- decision making and their customer base are similar to our own. We also share a passion for community involvement, and this merger will provide additional resources that can be delivered locally."

Also commenting on the transaction, Marty Adams, Sky Financial Group’s chairman, president, and chief executive officer, said, "This is an exciting transaction that provides Sky shareholders with immediate value, as well as the opportunity to participate in the upside potential created by bringing together our two strong financial institutions. Both companies have deep- rooted ties to the communities in which we operate and share a commitment to delivering the best products and services to our customers locally. We expect this transaction to benefit our loyal customers significantly by giving them added convenience and access to Huntington’s many services, including its proven wealth and investment management expertise."

Adams continued, "This is an important day in the history of Sky Financial, and on behalf of our board and management, I want all of our employees to know how much we recognize and appreciate the integral role they have played in our growth and success."

Hoaglin and Adams noted that they are committed to a seamless transition for Sky Financial Group’s customers. Huntington and Sky Financial will initiate an extensive communication outreach program to ensure that all customers are informed prior to any changes resulting from the merger.

Upon completion of the merger, Marty Adams will be appointed president and chief operating officer, reporting to Thomas E. Hoaglin, who will remain chairman and chief executive officer. In his newly created position, Adams will have organizational responsibility for the Regional Banking and Insurance lines of business, as well as the Operations and Technology support functions. Thomas E. Hoaglin will retain his titles of chairman and chief executive officer. Other functions reporting to Hoaglin will be the Dealer Sales and Private Financial and Capital Markets lines of business, as well as other support functions including Finance, Human Resources, Risk Management, Legal, and Government Affairs. Per terms of an employment agreement, Adams will become chief executive officer and president on, or before, December 31, 2009, with Hoaglin remaining as Chairman until early 2011, at which time he will retire.

Upon completion of the merger, Huntington’s board of directors will consist of 15 members, including 10 from Huntington and 5 from Sky Financial Group.