We are a multi-state diversified regional bank holding company organized under Maryland law in 1966 and headquartered in Columbus, Ohio. Through the Bank, we have over 150 years of servicing the financial needs of our customers. Through our subsidiaries, we provide full-service commercial and consumer banking services, mortgage banking services, automobile financing, recreational vehicle and marine financing, equipment financing, investment management, trust services, brokerage services, insurance products and services, and other financial products and services. Our 839 full-service branches and private client group offices are located in Ohio, Illinois, Indiana, Kentucky, Michigan, Pennsylvania, and West Virginia. Select financial services and other activities are also conducted in various other states. International banking services are available through the headquarters office in Columbus, Ohio. Our foreign banking activities, in total or with any individual country, are not significant.

This MD&A provides information we believe necessary for understanding our financial condition, changes in financial condition, results of operations, and cash flows. The MD&A included in our 2019 Form 10-K should be read in conjunction with this MD&A as this discussion provides only material updates to the 2019 Form 10-K. This MD&A should also be read in conjunction with the Unaudited Condensed Consolidated Financial Statements, Notes to Unaudited Condensed Consolidated Financial Statements, and other information contained in this report.

Fully-taxable equivalent net interest income was $796$797 million, down $33$22 million, or 4%3%. This reflected a 2537 basis point decrease in the FTE net interest margin to 3.14%2.94%, partially offset by the benefit from the $2.6$9.9 billion, or 3%10%, increase in average earning assets.

The provision for credit losses increased $374$268 million year-over-year to $441$327 million in the 2020 firstsecond quarter. Net charge-offs increased $46$59 million to $117$107 million. The oil and gas portfolio accounted for approximately 27%$60 million of totalthe $80 million of commercial NCOs, while one large relationshipnearly all of which resulted from charge-offs on loans sold in the coal industry accounted for an additional 45%.quarter or under contract to be sold. Consumer NCOs of $27 million were down on both a year-over-year basis, consistent with our expectations.and linked quarter basis. Total NCOs represented an annualized 0.62%0.54% of average loans and leases in the current quarter, up from 0.38%0.25% in the year-ago quarter.

Noninterest income was $361$391 million, up $42$17 million, or 13%5%, from the year ago quarter. Mortgage banking income increased $37$62 million, or 176%, and capital markets fees increased $11 million, or 50%182%. Partially offsetting these increases,this increase, service charges on deposit accounts decreased $32 million, or 35%, other noninterest income decreased $8 million, or 21%14%, whileand gain on sale of loans and leases decreased $5 million, or 38%.

Noninterest expense was $652for the 2020 second quarter decreased $25 million, relatively flator 4%, from the year-ago quarter. Other noninterest expense decreased $15 million, or 24%, and personnel costs decreased $10 million, or 2%.

The COVID-19 pandemic has caused and continues to cause significant, unprecedented disruption around the world that has affectedaffects daily living and negatively impactedimpacts the global economy. The pandemic has resulted in temporary closures of many businesses and the institution of social distancing and shelter in place requirements in many states and communities, which has increasedincreasing unemployment levels and caused extremecausing volatility in the financial markets. While COVID-19 has negatively impactedAs further discussed in “Discussion of Results of Operations,” the economy,reduction in interest rates, borrower and counterparty credit deterioration and market volatility, among other factors, had negative impact on our current quarter performance. Though we are unable to estimate the Coronavirus Aid, Relief,magnitude, we expect the pandemic and Economic Security Act (“CARES Act”) provides for financial stimulus and government lending programs at unprecedented levels. The benefits of these programs, as well as any potential additional stimulus, to effectively support businesses and consumers within the economy are uncertain.related global economic crisis will adversely affect our future operating results.

Huntington was able to react quickly to these changes because of the commitment and flexibility of its workforce coupled with a well-prepared business continuity plan.plans. To ensure the safety of our branch colleagues, while still meeting the needs of our customers, we have moved to use of branches with drive-thru only, with in-person meetings by appointment.appointment during shelter-in-place orders. For other colleagues, we have implemented a work-from-home approach with increased communication to keep them informed, engaged, productive and connected. Additional benefits such ashave been provided, including medical, emergency paid time off and other programs for those whose families have been directly impacted by the virus,virus. While state and local governments have been added.started to ease temporary business closures and shelter in place requirements and we have opened our branches, we expect a large portion of our colleagues will continue to operate remotely.

For our customers, we have established a variety of temporary relief programs which include loan payment deferrals, late fee and overdraft waivers and the suspension of foreclosure and repossessions. In additionWe continue to these measures, we are workingwork with our customers to originate and renew business loans as well as originate loans made available through the Small Business Administration Paycheck Protection Program, a lending program established as part of the relief to American consumers and businesses in the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act. As of April 16, 2020, we have processed approximately 26,000 applications totaling over $6.1 billion.Act”).

The CARES Act was passed by Congress and signed into law on March 27, 2020. It provides for financial stimulus and government lending programs at unprecedented levels. The benefits of these programs within the economy remain uncertain.  The CARES Act includes ana total allocation of $349$659 billion for loans to be issued by financial institutions through the Small Business Administration (“SBA”).  This program is known as the Paycheck Protection Program (“PPP”).  PPP loans are forgivable, in whole or in part, if the proceeds are used for payroll and other permitted purposes in accordance with the requirements of the PPP.  These loans carry a fixed rate of 1.00% and a termterms of two or five years, if not forgiven, in whole or in part. Payments are deferred for the first six months of the loan. The loans are 100% guaranteed by the SBA.  The SBA pays the originating bank a processing fee ranging

The FRB has taken a range of actions to support the flow of credit to households and businesses. For example, on March 15, 2020, the FRB reduced the target range for the federal funds rate to 0 to 0.25% and announced that it would increase its holdings of U.S. Treasury securities and agency mortgage-backed securities and begin purchasing agency commercial mortgage-backed securities. The FRB has also encouraged depository institutions to borrow from the discount window and has lowered the primary credit rate for such borrowing by 150 basis points while extending the term of such loans up to 90 days. Reserve requirements have been reduced to zero as of March 26, 2020.

The FRB has established, or has taken steps to establish, a range of facilities and programs to support the U.S. economy and U.S. marketplace participants in response to economic disruptions associated with COVID-19, including among others, main street lendingMain Street Lending facilities to purchase loan participations, under specified conditions, from banks lending to small and medium U.S. businesses.  WeWhile we have not participated in these facilities or programs to date, we may participate in some or all of them,these facilities or programs, including as a lender, agent, or intermediary on behalf of clients or customers or in an advisory capacity.capacity in the future.

AsOur second quarter results reflect strong execution across the bank in a very challenging operating environment, including our extraordinary efforts to help customers through the economic challenges associated with the pandemic. Many of our customers benefited from a variety of actions we entered 2020,instituted, including fee waivers and payment relief programs. These actions are consistent with our purpose of looking out for people. Huntington is well-positioned to support our customers through these current challenges and to help the underlyingeconomic recovery in the communities we serve. While we are pleased with the second quarter results, the COVID-19 pandemic has altered the economic fundamentals in our footprint were relatively healthy. The COVID-19 pandemic has altered those fundamentals for the foreseeable future and we continue to believe the economy will be challenged for some time.