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, 2017

The calculation of EPS and diluted EPS for 2017, 2016 and 2015 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)	2017			2016			2015
Earnings per common share
Net income	$	18,232		$	17,822		$	15,910
Preferred stock dividends	(1,614		)	(1,682		)	(1,483		)
Net income applicable to common shareholders	$	16,618		$	16,140		$	14,427
Average common shares issued and outstanding	10,195,646			10,284,147			10,462,282
Earnings per common share	$	1.63		$	1.57		$	1.38

Diluted earnings per common share
Net income applicable to common shareholders	$	16,618		$	16,140		$	14,427
Add preferred stock dividends due to assumed conversions ⁽¹⁾	186			300			300
Net income allocated to common shareholders	$	16,804		$	16,440		$	14,727
Average common shares issued and outstanding	10,195,646			10,284,147			10,462,282
Dilutive potential common shares ⁽²⁾	582,782			762,659			773,948
Total diluted average common shares issued and outstanding	10,778,428			11,046,806			11,236,230
Diluted earnings per common share	$	1.56		$	1.49		$	1.31


⁽¹⁾	Represents the Series T dividends under the “if-converted” method prior to conversion.


⁽²⁾	Includes incremental dilutive shares from RSUs, restricted stock and warrants.

In connection with an investment in the Corporation’s Series T preferred stock in 2011, the Series T holders also received warrants to purchase 700 million shares of the Corporation’s common stock at an exercise price of $7.142857 per share. On August 24, 2017, the Series T holders exercised the warrants and acquired the 700 million shares of the Corporation’s common stock using the Series T preferred stock as consideration for the exercise price, which increased common shares outstanding, but had no effect on diluted earnings per share as this conversion had been included in the Corporation’s diluted earnings per share calculation under the applicable accounting guidance. The use of the Series T preferred stock as consideration represents a non-cash financing activity and, accordingly, is not reflected in the Consolidated Statement of Cash Flows. 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 2017, 2016 and 2015, 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 2017, 2016 and 2015, average options to purchase 21 million, 45 million and 66 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 2017, 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. For 2017, average warrants to purchase 143 million shares of common stock were included in the diluted EPS calculation under the treasury stock method compared to 150 million shares of common stock in both 2016 and 2015.