Bank of America Corporation Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Earnings Per Common Share

Earnings Per Common Share

6 Months Ended

Jun. 30, 2016

NOTE 13 – Earnings Per Common Share

The calculation of earnings per common share (EPS) and diluted EPS for the three and six months ended June 30, 2016 and 2015 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 2015 Annual Report on Form 10-K.



	Three Months Ended June 30						Six Months Ended June 30
(Dollars in millions, except per share information; shares in thousands)	2016			2015			2016			2015
Earnings per common share
Net income	$	4,232		$	5,134		$	6,912		$	8,231
Preferred stock dividends	(361		)	(330		)	(818		)	(712		)
Net income applicable to common shareholders	$	3,871		$	4,804		$	6,094		$	7,519
Average common shares issued and outstanding	10,253,573			10,488,137			10,296,652			10,503,379
Earnings per common share	$	0.38		$	0.46		$	0.59		$	0.72

Diluted earnings per common share
Net income applicable to common shareholders	$	3,871		$	4,804		$	6,094		$	7,519
Add preferred stock dividends due to assumed conversions	75			75			150			150
Net income allocated to common shareholders	$	3,946		$	4,879		$	6,244		$	7,669
Average common shares issued and outstanding	10,253,573			10,488,137			10,296,652			10,503,379
Dilutive potential common shares ⁽¹⁾	805,594			749,923			783,287			749,038
Total diluted average common shares issued and outstanding	11,059,167			11,238,060			11,079,939			11,252,417
Diluted earnings per common share	$	0.36		$	0.43		$	0.56		$	0.68


⁽¹⁾	Includes incremental dilutive shares from RSUs, 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 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 six months ended June 30, 2016 and 2015, 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 six months ended June 30, 2016 and 2015, 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 six months ended June 30, 2016, average options to purchase 42 million and 48 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 64 million and 68 million for the same periods in 2015. For both the three and six months ended June 30, 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 and average warrants to purchase 150 million shares of common stock were included in the diluted EPS calculation using the treasury stock method.