Shareholders' Equity

9 Months Ended

Sep. 30, 2015

Earnings Per Share [Abstract]

Stockholders' Equity Note Disclosure

Shareholders' Equity

Common Stock Warrant

On May 13, 2015, the Corporation repurchased a warrant previously issued by Citizens to the U.S. Treasury. The warrant, which entitled the U.S. Treasury to purchase 2,571,998 shares of FirstMerit Common Stock at an adjusted strike price of $17.50, was purchased for $12.2 million. In accordance with GAAP, the Corporation recorded a reduction to capital surplus in the amount of $9.2 million in conjunction with this warrant repurchase that reflected the excess amount paid over the previously stated amount.

Preferred Stock

The Corporation has 7,000,000 shares of authorized Preferred Stock and has designated 115,000 shares of its Preferred Stock as 5.875% Non-Cumulative Perpetual Preferred Stock, Series A, of which 100,000 shares were issued. The Preferred Stock pays cash dividends quarterly in arrears on the 4^th day of February, May, August, and November.

Earnings Per Share

Basic net income per common share is calculated using the two-class method to determine income attributable to common shareholders. Net income attributable to Common Stock is then divided by the weighted-average number of Common Stock outstanding during the period.

Diluted net income per common share is calculated under the more dilutive of either the treasury method or two-class method. Adjustments to the weighted-average number of shares of Common Stock outstanding are made only when such adjustments will dilute earnings per common share. Net income attributable to Common Stock is then divided by the weighted-average number of Common Stock and Common Stock equivalents outstanding during the period.

The reconciliation between basic and diluted EPS using the two-class method and treasury stock method is presented as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
(Dollars in thousands, except per share amounts)	2015		2014		2015		2014
Basic EPS:
Net income	$	59,012	$	63,898	$	172,735	$	176,872
Less:
Cash dividends on 5.875% non-cumulative perpetual series A, Preferred Stock	1,469		1,469		4,407		4,407
Income allocated to participating securities	477		519		1,401		1,433
Net income attributable to common shareholders	$	57,066	$	61,910	$	166,927	$	171,032
Weighted average Common Stock outstanding used in basic EPS	165,762		165,389		165,638		165,263
Basic net income per common share	$	0.34	$	0.37	$	1.01	$	1.03
Diluted EPS:
Income used in diluted earnings per common share calculation	$	57,066	$	61,910	$	166,927	$	171,032
Weighted average Common Stock outstanding used in basic EPS	165,762		165,389		165,638		165,263
Add: Common Stock equivalents:
Stock plans and warrant	296		415		301		653
Weighted average Common and Common Stock equivalent shares outstanding	166,058		165,804		165,939		165,916
Diluted net income per common share	$	0.34	$	0.37	$	1.01	$	1.03

Common Stock equivalents consist of employee stock award plans and the Common Stock warrant. These Common Stock equivalents do not enter into the calculation of diluted EPS if the impact would be anti-dilutive, that is, increase EPS or reduce a loss per share. Antidilutive potential Common Stock for the nine months endedSeptember 30,2015 and 2014 totaled 0.8 million and 0.9 million, respectively.