Huntington National Bank 2014 Annual Report Download - page 161

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13. 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 12). 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. The calculation of basic and diluted earnings per
share for each of the three years ended December 31 was as follows:
Year ended December 31,
(dollar amounts in thousands, except per share amounts) 2014 2013 2012
Basic earnings per common share:
N
et income $ 632,392 $ 641,282 $ 631,290
Preferred stock dividends, deemed dividends and accretion of discount (31,854) (31,869) (31,989)
N
et income available to common shareholders $ 600,538 $ 609,413 $ 599,301
Average common shares issued and outstanding 819,917 834,205 857,962
Basic earnings per common share $ 0.73 $ 0.73 $ 0.70
Diluted earnings per common share
N
et income available to common shareholders $ 600,538 $ 609,413 $ 599,301
Effect of assumed preferred stock conversion --- --- ---
N
et income applicable to diluted earnings per share $ 600,538 $ 609,413 $ 599,301
Average common shares issued and outstanding 819,917 834,205 857,962
Dilutive potential common shares:
Stock options and restricted stock units and awards 11,421 8,418 4,202
Shares held in deferred compensation plans 1,420 1,351 1,238
Other 323 --- ---
Dilutive potential common shares: 13,164 9,769 5,440
Total diluted average common shares issued and outstanding 833,081 843,974 863,402
Diluted earnings per common share $ 0.72 $ 0.72 $ 0.69
Approximately 2.6 million, 6.6 million, and 24.4 million options to purchase shares of common stock outstanding at the end of
2014, 2013, and 2012, respectively, were not included in the computation of diluted earnings per share because the effect would be
antidilutive.
14. SHARE-BASED COMPENSATION
Huntington sponsors nonqualified and incentive share based compensation plans. These plans provide for the granting of stock
options and other awards to officers, directors, and other employees. Compensation costs are included in personnel costs on the
Consolidated Statements of Income. Stock options are granted at the closing market price on the date of the grant. Options granted
typically vest ratably over four years or when other conditions are met. Stock options, which represented a portion of our grant
values, have no intrinsic value until the stock price increases. Options granted prior to May 2004 have a term of ten years. All options
granted after May 2004 have a term of seven years.
In 2012, shareholders approved the Huntington Bancshares Incorporated 2012 Long-Term Incentive Plan (the Plan) which
authorized 51.0 million shares for future grants. The Plan is the only active plan under which Huntington is currently granting share
based options and awards. At December 31, 2014, 15.3 million shares from the Plan were available for future grants. Huntington
issues shares to fulfill stock option exercises and restricted stock unit and award vesting from available authorized common shares. At
December 31, 2014, the Company believes there are adequate authorized common shares to satisfy anticipated stock option exercises
and restricted stock unit and award vesting in 2015.