Quarterly report pursuant to Section 13 or 15(d)

Earnings Per Common Share

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Earnings Per Common Share
 9 Months Ended
Sep. 30, 2014
Earnings Per Share [Abstract]  
Earnings Per Common Share
NOTE 13 – Earnings Per Common Share

The calculation of earnings per common share (EPS) and diluted EPS for the three and nine months ended September 30, 2014 and 2013 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 2013 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)
2014
 
2013
 
2014

2013
Earnings (loss) per common share
 
 
 
 
 
 
 
Net income (loss)
$
(232
)
 
$
2,497

 
$
1,783

 
$
7,992

Preferred stock dividends
(238
)
 
(279
)
 
(732
)
 
(1,093
)
Net income (loss) applicable to common shareholders
$
(470
)
 
$
2,218

 
$
1,051

 
$
6,899

Dividends and undistributed earnings allocated to participating securities
—

 
(1
)
 
—

 
(2
)
Net income (loss) allocated to common shareholders
$
(470
)
 
$
2,217

 
$
1,051

 
$
6,897

Average common shares issued and outstanding
10,515,790

 
10,718,918

 
10,531,688

 
10,764,216

Earnings (loss) per common share
$
(0.04
)
 
$
0.21

 
$
0.10

 
$
0.64

 
 
 
 
 
 
 
 
Diluted earnings (loss) per common share
 
 
 
 
 
 
 
Net income (loss) applicable to common shareholders
$
(470
)
 
$
2,218

 
$
1,051

 
$
6,899

Add preferred stock dividends due to assumed conversions
—

 
75

 
—

 
225

Dividends and undistributed earnings allocated to participating securities
—

 
(1
)
 
—

 
(2
)
Net income (loss) allocated to common shareholders
$
(470
)
 
$
2,292

 
$
1,051

 
$
7,122

Average common shares issued and outstanding
10,515,790

 
10,718,918

 
10,531,688

 
10,764,216

Dilutive potential common shares (1)
—

 
763,308

 
56,153

 
759,433

Total diluted average common shares issued and outstanding
10,515,790

 
11,482,226

 
10,587,841

 
11,523,649

Diluted earnings (loss) per common share
$
(0.04
)
 
$
0.20

 
$
0.10

 
$
0.62

(1) 
Includes incremental dilutive shares from restricted stock units, restricted stock, stock options and warrants. There were no potential common shares that are dilutive for the three months ended September 30, 2014 because of the net loss applicable to common shareholders.

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 the three and nine months ended September 30, 2014, the 700 million average dilutive potential common shares associated with the Series T Preferred Stock 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, the 700 million average dilutive potential common shares were included in the diluted share count under the "if-converted" method.

For both the three and nine months ended September 30, 2014 and 2013, 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, 2014, average options to purchase 88 million and 92 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 123 million and 127 million for the same periods in 2013. For the three and nine months ended September 30, 2014, average warrants to purchase 272 million shares and 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 the nine months ended September 30, 2014, average warrants to purchase 150 million shares of common stock were included in the diluted EPS calculation using the treasury stock method. 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.