Quarterly report pursuant to Section 13 or 15(d)

Earnings Per Common Share

v3.5.0.2
Earnings Per Common Share
9 Months Ended
Sep. 30, 2016
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 nine months ended September 30, 2016 and 2015 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 2015 Annual Report on Form 10-K.

 
Three Months Ended September 30
 
Nine Months Ended September 30
(Dollars in millions, except per share information; shares in thousands)
2016
 
2015
 
2016

2015
Earnings per common share
 
 
 
 
 
 
 
Net income
$
4,955

 
$
4,619

 
$
13,210

 
$
12,552

Preferred stock dividends
(503
)
 
(441
)
 
(1,321
)
 
(1,153
)
Net income applicable to common shareholders
$
4,452

 
$
4,178

 
$
11,889

 
$
11,399

Average common shares issued and outstanding
10,250,124

 
10,444,291

 
10,312,878

 
10,483,466

Earnings per common share
$
0.43

 
$
0.40

 
$
1.15

 
$
1.09

 
 
 
 
 
 
 
 
Diluted earnings per common share
 
 
 
 
 
 
 
Net income applicable to common shareholders
$
4,452

 
$
4,178

 
$
11,889

 
$
11,399

Add preferred stock dividends due to assumed conversions
75

 
75

 
225

 
225

Net income allocated to common shareholders
$
4,527

 
$
4,253

 
$
12,114

 
$
11,624

Average common shares issued and outstanding
10,250,124

 
10,444,291

 
10,312,878

 
10,483,466

Dilutive potential common shares (1)
750,349

 
752,912

 
733,929

 
750,659

Total diluted average common shares issued and outstanding
11,000,473

 
11,197,203

 
11,046,807

 
11,234,125

Diluted earnings per common share
$
0.41

 
$
0.38

 
$
1.10

 
$
1.03

(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 both the three and nine months ended September 30, 2016 and 2015, 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 nine months ended September 30, 2016 and 2015, 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 nine months ended September 30, 2016, average options to purchase 42 million and 46 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 64 million and 67 million for the same periods in 2015. For both the three and nine months ended September 30, 2016 and 2015, 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.