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, 2016

The calculation of EPS and diluted EPS for 2016, 2015 and 2014 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)	2016			2015			2014
Earnings per common share
Net income	$	17,906		$	15,836		$	5,520
Preferred stock dividends	(1,682		)	(1,483		)	(1,044		)
Net income applicable to common shareholders	$	16,224		$	14,353		$	4,476
Average common shares issued and outstanding	10,284,147			10,462,282			10,527,818
Earnings per common share	$	1.58		$	1.37		$	0.43

Diluted earnings per common share
Net income applicable to common shareholders	$	16,224		$	14,353		$	4,476
Add preferred stock dividends due to assumed conversions	300			300			—
Net income allocated to common shareholders	$	16,524		$	14,653		$	4,476
Average common shares issued and outstanding	10,284,147			10,462,282			10,527,818
Dilutive potential common shares ⁽¹⁾	751,510			751,710			56,717
Total diluted average common shares issued and outstanding	11,035,657			11,213,992			10,584,535
Diluted earnings per common share	$	1.50		$	1.31		$	0.42


⁽¹⁾	Includes incremental dilutive shares from RSUs, restricted stock 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 2016 and 2015, 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 2016, 2015 and 2014, 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 2016, 2015 and 2014, average options to purchase 45 million, 66 million and 91 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 2016, 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, and average warrants to purchase 150 million shares of common stock were included in the diluted EPS calculation under the treasury stock method.