Huntington National Bank 2013 Annual Report Download - page 159

153
Year ended December 31,
(dollar amounts in thousands, except per share amounts) 2013 2012 2011
Basic earnings per common share:
N
et income $ 638,741 $ 641,022 $ 542,613
Preferred stock dividends, deemed dividends and accretion of discount (31,869) (31,989) (30,813)
N
et income available to common shareholders $ 606,872 $ 609,033 $ 511,800
Average common shares issued and outstanding 834,205 857,962 863,691
Basic earnings per common share $ 0.73 $ 0.71 $ 0.59
Diluted earnings per common share
N
et income available to common shareholders $ 606,872 $ 609,033 $ 511,800
Effect of assumed preferred stock conversion --- --- ---
N
et income applicable to diluted earnings per share $ 606,872 $ 609,033 $ 511,800
Average common shares issued and outstanding 834,205 857,962 863,691
Dilutive potential common shares:
Stock options and restricted stock units and awards 8,418 4,202 2,916
Shares held in deferred compensation plans 1,351 1,238 1,017
Conversion of preferred stock --- --- ---
Dilutive potential common shares: 9,769 5,440 3,933
Total diluted average common shares issued and outstanding 843,974 863,402 867,624
Diluted earnings per common share $ 0.72 $ 0.71 $ 0.59
Approximately 6.6 million, 24.4 million, and 23.6 million options to purchase shares of common stock outstanding at the end of
2013, 2012, and 2011, respectively, were not included in the computation of diluted earnings per share because the effect would be
antidilutive.
16. SHARE-BASED COMPENSATION
Huntington sponsors nonqualified and incentive share based compensation plans. These plans provide for the granting of stock
options and other share-based 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 three 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 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, 2013, 24.4 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, 2013, the Company believes there are adequate authorized common shares to satisfy anticipated stock option exercises
and restricted stock unit and award vesting in 2014.
Huntington uses the Black-Scholes option pricing model to value options in determining our share-based compensation expense.
Forfeitures are estimated at the date of grant based on historical rates, and updated as necessary, and reduce the compensation expense
recognized. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the date of grant. The expected dividend
yield is based on the dividend rate and stock price at the date of the grant. Expected volatility is based on the estimated volatility of
Huntington’s stock over the expected term of the option.