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, 2018

The calculation of EPS and diluted EPS for 2018, 2017 and 2016 is presented below. For more information on the calculation of EPS, see Note 1 – Summary of Significant Accounting Principles.




(In millions, except per share information)	2018			2017			2016
Earnings per common share
Net income	$	28,147		$	18,232		$	17,822
Preferred stock dividends	(1,451		)	(1,614		)	(1,682		)
Net income applicable to common shareholders	$	26,696		$	16,618		$	16,140
Average common shares issued and outstanding	10,096.5			10,195.6			10,284.1
Earnings per common share	$	2.64		$	1.63		$	1.57

Diluted earnings per common share
Net income applicable to common shareholders	$	26,696		$	16,618		$	16,140
Add preferred stock dividends due to assumed conversions ⁽¹⁾	—			186			300
Net income allocated to common shareholders	$	26,696		$	16,804		$	16,440
Average common shares issued and outstanding	10,096.5			10,195.6			10,284.1
Dilutive potential common shares ⁽²⁾	140.4			582.8			762.7
Total diluted average common shares issued and outstanding	10,236.9			10,778.4			11,046.8
Diluted earnings per common share	$	2.61		$	1.56		$	1.49


⁽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.

The Corporation previously issued warrants to purchase 700 million shares of the Corporation’s common stock to the holders of the Series T 6% Non-cumulative preferred stock (Series T) 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 was included in the Corporation’s diluted earnings per share calculation under the applicable accounting guidance. For 2016, the average dilutive impact of the 700 million potential common shares was included in the diluted share count under the “if-converted” method.

For 2018, 2017 and 2016, 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 2018, 2017 and 2016, average options to purchase 4 million, 21 million and 45 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 and 2016, 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. These warrants expired on October 29, 2018. For 2018, 2017 and 2016, average warrants to purchase 136 million, 143 million and 150 million shares of common stock, respectively, were included in the diluted EPS calculation under the treasury stock method. Substantially all of the outstanding warrants were exercised on or before the expiration date of January 16, 2019.