Huntington National Bank 2014 Annual Report Download - page 160

154
Amortization of defined benefit pension and post-retirement
items:
Actuarial gains (losses) $ 106,857
$
(22,293) Noninterest expense - personnel costs
Prior service costs --- 3,454 Noninterest expense - personnel costs
Other --- (919) Noninterest expense - personnel costs
Curtailment --- 32,864 Noninterest expense - personnel costs
106,857 13,106 Total before tax
(37,400) (4,588) Tax (expense) benefit
$ 69,457
$
8,518 Net of tax
12. SHAREHOLDERS’ EQUITY
Preferred Stock issued and outstanding
In 2008, Huntington issued 569,000 shares of 8.50% Series A Non-Cumulative Perpetual Convertible Preferred Stock (Series A
Preferred Stock) with a liquidation preference of $1,000 per share. Each share of the Series A Preferred Stock is non-voting and may
be converted at any time, at the option of the holder, into 83.668 shares of common stock of Huntington, which represents an
approximate initial conversion price of $11.95 per share of common stock. Since April 15, 2013, at the option of Huntington, the
Series A Preferred Stock is subject to mandatory conversion into Huntington's common stock at the prevailing conversion rate if the
closing price of Huntington's common stock exceeds 130% of the conversion price for 20 trading days during any 30 consecutive
trading-day period.
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.
Share Repurchase Program
On March 26, 2014, Huntington announced that the Federal Reserve did not object to Huntington's proposed capital actions
included in Huntington's capital plan submitted to the Federal Reserve in January 2014. These actions included a potential repurchase
of up to $250 million of common stock through the first quarter of 2015. This repurchase authorization represented a $23 million, or
10%, increase from the prior common stock repurchase authorization. Purchases of common stock may include open market
purchases, privately negotiated transactions, and accelerated repurchase programs. Huntington’s board of directors authorized a share
repurchase program consistent with Huntington’s capital plan. During 2014, Huntington repurchased a total of 35.7 million shares of
common stock at a weighted average share price of $9.37. During 2013, Huntington repurchased a total of 16.7 million shares of
common stock, at a weighted average share price of $7.46.
On April 29, 2014, Huntington repurchased approximately 2.2 million shares of common stock from a third-party under an
accelerated share repurchase program. The accelerated share repurchase program enabled Huntington to purchase 1.9 million shares
immediately, while the third party could have purchased shares in the market up through June 24, 2014 (the Repurchase Term). In
connection with the repurchase of these shares, Huntington entered into a variable share forward sale agreement, which provides for a
settlement, reflecting a price differential based on the adjusted volume-weighted average price as defined in the agreement with the
third party. The variable share forward agreement was settled in shares, resulting in approximately 0.3 million shares being delivered
to Huntington on June 27, 2014. Based on the adjusted volume-weighted average prices through June 24, 2014, the settlement of the
variable share forward agreement did not have a material impact to Huntington.
Huntington has the ability to repurchase up to $51.7 million of additional shares of common stock through the first quarter of
2015. We intend to continue disciplined repurchase activity consistent with our annual capital plan, our capital return objectives, and
market conditions.