Bank of America Corporation Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

Earnings Per Common Share

Earnings Per Common Share

12 Months Ended

Dec. 31, 2015

The calculation of earnings per common share (EPS) and diluted EPS for 2015, 2014 and 2013 is presented below. For more information on the calculation of EPS, see Note 1 – Summary of Significant Accounting Principles.




(Dollars in millions, except per share information; shares in thousands)	2015			2014			2013
Earnings per common share
Net income	$	15,888		$	4,833		$	11,431
Preferred stock dividends	(1,483		)	(1,044		)	(1,349		)
Net income applicable to common shareholders	14,405			3,789			10,082
Dividends and undistributed earnings allocated to participating securities	—			—			(2		)
Net income allocated to common shareholders	$	14,405		$	3,789		$	10,080
Average common shares issued and outstanding	10,462,282			10,527,818			10,731,165
Earnings per common share	$	1.38		$	0.36		$	0.94

Diluted earnings per common share
Net income applicable to common shareholders	$	14,405		$	3,789		$	10,082
Add preferred stock dividends due to assumed conversions	300			—			300
Dividends and undistributed earnings allocated to participating securities	—			—			(2		)
Net income allocated to common shareholders	$	14,705		$	3,789		$	10,380
Average common shares issued and outstanding	10,462,282			10,527,818			10,731,165
Dilutive potential common shares ⁽¹⁾	751,710			56,717			760,253
Total diluted average common shares issued and outstanding	11,213,992			10,584,535			11,491,418
Diluted earnings per common share	$	1.31		$	0.36		$	0.90


⁽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 2015 and 2013, the 700 million average dilutive potential common shares were included in the diluted share count under the “if-converted” method. For 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 additional information, see Note 13 – Shareholders’ Equity.

For 2015, 2014 and 2013, 62 million average dilutive potential common shares associated with the Series L Preferred Stock were not included in the diluted share count because the result would have been antidilutive under the “if-converted” method. For 2015, 2014 and 2013, average options to purchase 66 million, 91 million and 126 million shares of common stock, respectively, were outstanding but not included in the computation of EPS because the result would have been antidilutive under the treasury stock method. For 2015 and 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 compared to 272 million shares for 2013. For 2015 and 2014, average warrants to purchase 150 million shares of common stock were included in the diluted EPS calculation under the treasury stock method.

In connection with the preferred stock actions described in Note 13 – Shareholders’ Equity, the Corporation recorded a $100 million non-cash preferred stock dividend in 2013, which is included in the calculation of net income allocated to common shareholders.