Huntington National Bank 2012 Annual Report Download - page 163

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In 2011, Huntington issued $35.5 million par value Floating Rate Series B Non-Cumulative Perpetual Preferred Stock with a
liquidation preference of $1,000 per share (the Series B Preferred Stock) and, in certain cases, an additional amount of cash
consideration, in exchange for $35.5 million of (1) Huntington Capital I Floating Rate Capital Securities, (2) Huntington Capital II
Floating Rate Capital Securities, (3) Sky Financial Capital Trust III Floating Rate Capital Securities and (4) Sky Financial Capital
Trust IV Floating Rate Capital Securities.
As part of the exchange offer, Huntington issued depositary shares. Each depositary share represents a 1/40th ownership interest
in a share of the Series B Preferred Stock. Each holder of a depositary share will be entitled, in proportion to the applicable fraction of
a share of Series B Preferred Stock and all the related rights and preferences. Huntington will pay dividends on the Series B Preferred
Stock at a floating rate equal to three-month LIBOR plus a spread of 2.70%. The preferred stock was recorded at the par amount of
$35.5 million, with the difference between par amount of the shares and their fair value of $23.8 million recorded as a discount.
Repurchase of Outstanding TARP Capital and Warrant to Repurchase Common Stock
In 2008, Huntington received $1.4 billion of equity capital by issuing to the Treasury 1.4 million shares of TARP Capital and a
ten-year warrant to purchase up to 23.6 million shares of Huntington’s common stock, par value $0.01 per share, at an exercise price
of $8.90 per share. As approved by the Federal Reserve Board, the Treasury, and our other banking regulators, on December 22,
2010, Huntington repurchased all 1.4 million shares of our TARP Capital held by the Treasury totaling $1.4 billion. Huntington used
the net proceeds from the issuance of common stock and subordinated debt, as well as other funds, to redeem the TARP Capital. On
January 19, 2011, Huntington repurchased the warrant originally issued to the Treasury for a purchase price of $49.1 million.
Share Repurchase Program
Huntington's board of directors authorized a share repurchase program consistent with Huntington’s capital plan that was
submitted to the Federal Reserve in January 2012. During 2012, Huntington repurchased a total of 23.3 million shares of common
stock, at a weighted average share price of $6.36. Huntington did not repurchase any shares of common stock during 2011.
15. EARNINGS PER SHARE
Basic earnings per share is the amount of earnings (adjusted for dividends declared on preferred stock) available to each share of
common stock outstanding during the reporting period. Diluted earnings per share is the amount of earnings available to each share of
common stock outstanding during the reporting period adjusted to include the effect of potentially dilutive common shares.
Potentially dilutive common shares include incremental shares issued for stock options, restricted stock units and awards, distributions
from deferred compensation plans, and the conversion of the Company’s convertible preferred stock (See Note 14). Potentially
dilutive common shares are excluded from the computation of diluted earnings per share in periods in which the effect would be
antidilutive. For diluted earnings per share, net income available to common shares can be affected by the conversion of the
Company’s convertible preferred stock. Where the effect of this conversion would be dilutive, net income available to common
shareholders is adjusted by the associated preferred dividends and deemed dividend.