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, 2017

The calculation of earnings per common share (EPS) and diluted EPS for the three and six months ended June 30, 2017 and 2016 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 2016 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)	2017			2016			2017			2016
Earnings per common share
Net income	$	5,269		$	4,783		$	10,125		$	8,255
Preferred stock dividends	(361		)	(361		)	(863		)	(818		)
Net income applicable to common shareholders	$	4,908		$	4,422		$	9,262		$	7,437
Average common shares issued and outstanding	10,013,503			10,328,424			10,056,111			10,308,241
Earnings per common share	$	0.49		$	0.43		$	0.92		$	0.72

Diluted earnings per common share
Net income applicable to common shareholders	$	4,908		$	4,422		$	9,262		$	7,437
Add preferred stock dividends due to assumed conversions	75			75			150			150
Net income allocated to common shareholders	$	4,983		$	4,497		$	9,412		$	7,587
Average common shares issued and outstanding	10,013,503			10,328,424			10,056,111			10,308,241
Dilutive potential common shares ⁽¹⁾	808,566			730,743			812,320			771,698
Total diluted average common shares issued and outstanding	10,822,069			11,059,167			10,868,431			11,079,939
Diluted earnings per common share	$	0.46		$	0.41		$	0.87		$	0.68


⁽¹⁾	Includes incremental dilutive shares from restricted stock units, restricted stock 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, 2017 and 2016, 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, 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 the three and six months ended June 30, 2017, average options to purchase 18 million and 24 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 42 million and 48 million for the same periods in 2016. For both the three and six months ended June 30, 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, and average warrants to purchase 150 million shares of common stock were included in the diluted EPS calculation under the treasury stock method.