Huntington Bancshares Incorporated Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

EARNINGS PER SHARE

EARNINGS PER SHARE

12 Months Ended

Dec. 31, 2018

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. Potentially dilutive common shares are excluded from the computation of diluted earnings per share in periods in which the effect would be antidilutive.

On February 22, 2018, Huntington converted all its outstanding 8.50% Series A Non-Cumulative Perpetual Convertible Preferred Stock to 30.3 million shares of common stock. Following the conversion, the additional shares were included in average common shares issued and outstanding. The 2018 and 2017 total diluted average common shares issued and outstanding was impacted by using the if-converted method. 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 millions, except per share data, share count in thousands)	2018			2017			2016
Basic earnings per common share:
Net income	$	1,393		$	1,186		$	712
Preferred stock dividends	(70		)	(76		)	(65		)
Net income available to common shareholders	$	1,323		$	1,110		$	647
Average common shares issued and outstanding	1,081,542			1,084,686			904,438
Basic earnings per common share	$	1.22		$	1.02		$	0.72
Diluted earnings per common share:
Net income available to common shareholders	$	1,323		$	1,110		$	647
Effect of assumed preferred stock conversion	—			31			—
Net income applicable to diluted earnings per share	$	1,323		$	1,141		$	647
Average common shares issued and outstanding	1,081,542			1,084,686			904,438
Dilutive potential common shares
Stock options and restricted stock units and awards	16,529			17,883			11,728
Shares held in deferred compensation plans	3,511			3,160			2,486
Dilutive impact of Preferred Stock	4,403			30,330			—
Other	—			127			138
Dilutive potential common shares	24,443			51,500			14,352
Total diluted average common shares issued and outstanding	1,105,985			1,136,186			918,790
Diluted earnings per common share	$	1.20		$	1.00		$	0.70

There were approximately 2.3 million, 1.0 million, and 3.1 million options to purchase shares of common stock not included in the computation of diluted earnings per share because the effect would be antidilutive at December 31, 2018, 2017, and 2016, respectively.