Quarterly report pursuant to Section 13 or 15(d)

Earnings Per Common Share

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Earnings Per Common Share
 3 Months Ended
Mar. 31, 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 months ended March 31, 2013 and 2012 is presented below. See Note 1 – Summary of Significant Accounting Principles to the Consolidated Financial Statements of the Corporation's 2012 Annual Report on Form 10-K for additional information on the calculation of EPS.

 
Three Months Ended March 31
(Dollars in millions, except per share information; shares in thousands)
2013
 
2012
Earnings per common share
 
 
 
Net income
$
1,483

 
$
653

Preferred stock dividends
(373
)
 
(325
)
Net income applicable to common shareholders
1,110

 
328

Dividends and undistributed earnings allocated to participating securities
—

 
(1
)
Net income allocated to common shareholders
$
1,110

 
$
327

Average common shares issued and outstanding
10,798,975

 
10,651,367

Earnings per common share
$
0.10

 
$
0.03

 
 
 
 
Diluted earnings per common share
 
 
 
Net income applicable to common shareholders
$
1,110

 
$
328

Dividends and undistributed earnings allocated to participating securities
—

 
(1
)
Net income allocated to common shareholders
$
1,110

 
$
327

Average common shares issued and outstanding
10,798,975

 
10,651,367

Dilutive potential common shares (1)
355,803

 
110,550

Total diluted average common shares issued and outstanding
11,154,778

 
10,761,917

Diluted earnings per common share
$
0.10

 
$
0.03

(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. Due to changes in the fair value of the Series T Preferred Stock during the three months ended March 31, 2013, it became more advantageous for the holder to tender cash to exercise the warrant. As a result, for the three months ended March 31, 2013, the impact of the 700 million common shares underlying the warrant was included in the diluted share count under the treasury stock method. For the three months ended March 31, 2012, the common shares associated with the warrant were not included in the diluted share count because the result would have been antidilutive under the "if-converted" method.

For both the three months ended March 31, 2013 and 2012, 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 months ended March 31, 2013 and 2012, average options to purchase 135 million and 176 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 both the three months ended March 31, 2013 and 2012, average warrants to purchase 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.