Quarterly report pursuant to Section 13 or 15(d)

Earnings Per Common Share

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Earnings Per Common Share
 6 Months Ended
Jun. 30, 2014
Earnings Per Share [Abstract]  
Earnings Per Common Share
NOTE 13 – Earnings Per Common Share

The calculation of earnings per common share (EPS) and diluted EPS for the three and six months ended June 30, 2014 and 2013 is presented below. For more information on the calculation of EPS, see Note 1 – Summary of Significant Accounting Principles to the Consolidated Financial Statements of the Corporation's 2013 Annual Report on Form 10-K.

 
Three Months Ended June 30
 
Six Months Ended June 30
(Dollars in millions, except per share information; shares in thousands)
2014
 
2013
 
2014

2013
Earnings per common share
 
 
 
 
 
 
 
Net income
$
2,291

 
$
4,012

 
$
2,015

 
$
5,495

Preferred stock dividends
(256
)
 
(441
)
 
(494
)
 
(814
)
Net income applicable to common shareholders
$
2,035

 
$
3,571

 
$
1,521

 
$
4,681

Dividends and undistributed earnings allocated to participating securities
—

 
(1
)
 
—

 
(1
)
Net income allocated to common shareholders
$
2,035

 
$
3,570

 
$
1,521

 
$
4,680

Average common shares issued and outstanding
10,519,359

 
10,775,867

 
10,539,769

 
10,787,357

Earnings per common share
$
0.19

 
$
0.33

 
$
0.14

 
$
0.43

 
 
 
 
 
 
 
 
Diluted earnings per common share
 
 
 
 
 
 
 
Net income applicable to common shareholders
$
2,035

 
$
3,571

 
$
1,521

 
$
4,681

Add preferred stock dividends due to assumed conversions
75

 
75

 
—

 
150

Dividends and undistributed earnings allocated to participating securities
—

 
(1
)
 
—

 
(1
)
Net income allocated to common shareholders
$
2,110

 
$
3,645

 
$
1,521

 
$
4,830

Average common shares issued and outstanding
10,519,359

 
10,775,867

 
10,539,769

 
10,787,357

Dilutive potential common shares (1)
745,764

 
748,643

 
59,872

 
762,336

Total diluted average common shares issued and outstanding
11,265,123

 
11,524,510

 
10,599,641

 
11,549,693

Diluted earnings per common share
$
0.19

 
$
0.32

 
$
0.14

 
$
0.42

(1) 
Includes incremental dilutive shares from restricted stock units, restricted stock, stock options and warrants.

The Corporation previously issued a warrant to purchase 700 million shares of the Corporation's common stock to the holder of the Series T Preferred Stock. The warrant may be exercised, at the option of the holder, through tendering the Series T Preferred Stock or paying cash. For the three months ended June 30, 2014, the 700 million average dilutive potential common shares associated with the Series T Preferred Stock were included in the diluted share count under the "if-converted" method. For the six months ended June 30, 2014, the 700 million average dilutive potential common shares were not included in the diluted share count because the result would have been antidilutive under the "if-converted" method. For both the three and six months ended June 30, 2013, the 700 million average dilutive potential common shares were included in the diluted share count under the "if-converted" method.

For both the three and six months ended June 30, 2014 and 2013, 62 million average dilutive potential common shares associated with the 7.25% Non-Cumulative Perpetual Convertible Preferred Stock, Series L were not included in the diluted share count because the result would have been antidilutive under the "if-converted" method. For the three and six months ended June 30, 2014, average options to purchase 89 million and 95 million shares of common stock were outstanding but not included in the computation of EPS because the result would have been antidilutive under the treasury stock method compared to 124 million and 129 million for the same periods in 2013. For the three and six months ended June 30, 2014, average warrants to purchase 122 million shares of common stock were outstanding but not included in the computation of EPS because the result would have been antidilutive under the treasury stock method and average warrants to purchase 150 million shares of common stock were included in the diluted EPS calculation using the treasury stock method. For the three and six months ended June 30, 2013, average warrants to purchase 272 million shares of common stock were outstanding but not included in the computation of EPS because the result would have been antidilutive under the treasury stock method.