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, 2018

The calculation of earnings per common share (EPS) and diluted EPS for the three and six months ended June 30, 2018 and 2017 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 2017 Annual Report on Form 10-K.




	Three Months Ended June 30						Six Months Ended June 30
(In millions, except per share information)	2018			2017			2018			2017
Earnings per common share
Net income	$	6,784		$	5,106		$	13,702		$	10,443
Preferred stock dividends	(318		)	(361		)	(746		)	(863		)
Net income applicable to common shareholders	$	6,466		$	4,745		$	12,956		$	9,580
Average common shares issued and outstanding	10,181.7			10,013.5			10,251.7			10,056.1
Earnings per common share	$	0.64		$	0.47		$	1.26		$	0.95

Diluted earnings per common share
Net income applicable to common shareholders	$	6,466		$	4,745		$	12,956		$	9,580
Add preferred stock dividends due to assumed conversions ⁽¹⁾	—			75			—			150
Net income allocated to common shareholders	$	6,466		$	4,820		$	12,956		$	9,730
Average common shares issued and outstanding	10,181.7			10,013.5			10,251.7			10,056.1
Dilutive potential common shares ⁽²⁾	127.7			821.3			138.2			820.6
Total diluted average common shares issued and outstanding	10,309.4			10,834.8			10,389.9			10,876.7
Diluted earnings per common share	$	0.63		$	0.44		$	1.25		$	0.89


⁽¹⁾	Represents the Series T dividends under the “if-converted” method prior to conversion.


⁽²⁾	Includes incremental dilutive shares from restricted stock units, 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). In the third quarter of 2017, the Series T holders exercised the warrants and acquired the 700 million shares of the Corporation’s common stock. For both the three and six months ended June 30, 2017, 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, 2018 and 2017, 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, 2018, average options to purchase three million and six 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 18 million and 24 million for the same periods in 2017. For the three and six months ended June 30, 2018, average warrants to purchase 140 million and 141 million shares of common stock were included in the diluted EPS calculation under the treasury stock method compared to 150 million shares of common stock for both periods in 2017. For both the three and six months ended June 30, 2018 and 2017, 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.