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Huntington Bancshares Inc. said Monday that it has proposed paying a $7.5 million penalty and requiring current and former executives to give back bonuses to settle a federal investigation into the company's past accounting practices.

The regional bank holding company also said earnings for the first quarter fell to $96.5 million, or 41 cents a share, from $104.2 million, or 45 cents a share, a year ago. The company's earnings were a penny below the expectations of analysts surveyed by Thomson Financial.

In midday trading, Huntington's shares were up 20 cents, or 0.9 percent, at $23.02 on the Nasdaq stock market. Its shares have ranged in price from $21 to $25.38 in the past year.

The settlement would resolve a Securities and Exchange Commission probe into the company's accounting and financial reporting practices, including the handling of automobile loan and lease origination fees and costs. Previously, the company reclassified the $3.2 billion in auto leases.

The SEC must approve the deal, and the company said SEC staff is expected to recommend it.

In 2003, the company cut its earnings by a total of $96 million from 1997 to 2003 to correct for accounting errors stemming from fees paid to auto dealers, deferral of commissions paid to originate deposits, mortgage origination fee income, recognition of pension settlements, and liabilities from the sale of an auto debt-cancellation product.

The company already has set aside the money to cover the penalty.

Besides the penalty, the settlement would require Chief Executive Thomas Hoaglin to repay $360,000 from his 2002 bonus. The company's former vice chairman and chief financial officer, Michael McMennamin, would repay $265,215 in bonuses and interest, while former controller John Van Fleet would repay $26,660. The three also would pay civil penalties totaling $150,000.

In an SEC filing in August, the company said McMennamin and Van Fleet gave up their job titles but were staying with the company. In a separate filing last month, the company said McMennamin retired March 31. Van Fleet remains with Huntington as a senior vice president.

"We are committed to meeting the highest standards in our accounting, corporate governance, internal audit and financial reporting policies and practices," Hoaglin said in a statement.

The proposed resolution of the SEC investigation is separate from a deal announced March 1 that requires federal banking regulators to review Huntington's accounting procedures and other business practices. No fines or penalties were assessed.

In its first-quarter earnings report, the company said loan and deposit growth were strong, but revenues from fees were weak.

For the year, the company reaffirmed its earning prediction of $1.78 to $1.83 per share.

The Huntington is a $32 billion company with more than 300 offices in Ohio, Michigan, Indiana, Kentucky and West Virginia.

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