Quarterly report pursuant to Section 13 or 15(d)

Earnings Per Common Share

v2.4.0.8
Earnings Per Common Share
 9 Months Ended
Sep. 30, 2013
Earnings Per Share [Abstract]  
Earnings Per Common Share
NOTE 14 – Earnings Per Common Share

The calculation of earnings per common share (EPS) and diluted EPS for the three and nine months ended September 30, 2013 and 2012 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 2012 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)
2013
 
2012
 
2013

2012
Earnings per common share
 
 
 
 
 
 
 
Net income
$
2,497

 
$
340

 
$
7,992

 
$
3,456

Preferred stock dividends
(279
)
 
(373
)
 
(1,093
)
 
(1,063
)
Net income (loss) applicable to common shareholders
$
2,218

 
$
(33
)
 
$
6,899

 
$
2,393

Dividends and undistributed earnings allocated to participating securities
(1
)
 
—

 
(2
)
 
(2
)
Net income (loss) allocated to common shareholders
$
2,217

 
$
(33
)
 
$
6,897

 
$
2,391

Average common shares issued and outstanding
10,718,918

 
10,776,173

 
10,764,216

 
10,735,461

Earnings per common share
$
0.21

 
$
0.00

 
$
0.64

 
$
0.22

 
 
 
 
 
 
 
 
Diluted earnings per common share
 
 
 
 
 
 
 
Net income (loss) applicable to common shareholders
$
2,218

 
$
(33
)
 
$
6,899

 
$
2,393

Add preferred stock dividends due to assumed conversions
75

 
—

 
225

 
—

Dividends and undistributed earnings allocated to participating securities
(1
)
 
—

 
(2
)
 
(2
)
Net income (loss) allocated to common shareholders
$
2,292

 
$
(33
)
 
$
7,122

 
$
2,391

Average common shares issued and outstanding
10,718,918

 
10,776,173

 
10,764,216

 
10,735,461

Dilutive potential common shares (1)
763,308

 
—

 
759,433

 
91,042

Total diluted average common shares issued and outstanding
11,482,226

 
10,776,173

 
11,523,649

 
10,826,503

Diluted earnings per common share
$
0.20

 
$
0.00

 
$
0.62

 
$
0.22

(1) 
Includes incremental 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 Corporation's 6% Cumulative Perpetual Preferred Stock, Series T (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, 2013, 700 million average dilutive potential common shares associated with the Series T Preferred Stock were included in the diluted share count under the "if-converted" method. For the same periods in 2012, they were not included in the diluted share count because the result would have been antidilutive under the "if-converted" method.

For both the three and nine months ended September 30, 2013 and 2012, 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, 2013, average options to purchase 123 million and 127 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 159 million and 166 million for the same periods in 2012. For the three and nine months ended September 30, 2013, average warrants to purchase 263 million and 272 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 for the same periods in 2012.