Computation of Earnings per Common Share

9 Months Ended

Sep. 30, 2019

Computation of Earnings per Common Share

Note 2. Computation of Earnings per Common Share

Basic earnings per common share (“EPS”) is computed by dividing the net income available to common shareholders by the weighted average number of common shares outstanding during the period. Diluted EPS is computed using the same method as basic EPS, however, the computation reflects the potential dilution that would occur if all dilutive securities were exercised and converted into common stock.

Unvested stock-based compensation awards containing

non-forfeitable

rights to dividends paid on the Company’s common stock are considered participating securities, and therefore are included in the

two-class

method for calculating EPS. Under the

two-class

method, all earnings (distributed and undistributed) are allocated to common shares and participating securities based on their respective rights to receive dividends on the common stock. The Company grants restricted stock to certain employees under its stock-based compensation plan. Recipients receive cash dividends during the vesting periods of these awards, including on the unvested portion of such awards. Since these dividends are

non-forfeitable,

the unvested awards are considered participating securities and therefore have earnings allocated to them.

The following table presents the Company’s computation of basic and diluted EPS for the periods indicated:


	Three Months Ended September 30,						Nine Months Ended September 30,
(in thousands, except share and per share amounts)	2019			2018			2019			2018
Net income available to common shareholders	$	90,839		$	98,565		$	269,248		$	296,057
Less: Dividends paid on and earnings allocated to participating securities		(1,073	)		(1,219	)		(3,245	)		(3,735	)

Earnings applicable to common stock	$	89,766		$	97,346		$	266,003		$	292,322

Weighted average common shares outstanding		465,357,326			488,476,340			465,400,372			488,383,554

Basic earnings per common share	$	0.19		$	0.20		$	0.57		$	0.60

Earnings applicable to common stock	$	89,766		$	97,346		$	266,003		$	292,322

Weighted average common shares outstanding		465,357,326			488,476,340			465,400,372			488,383,554
Potential dilutive common shares		418,674			—			237,708			—

Total shares for diluted earnings per common share computation		465,776,000			488,476,340			465,638,080			488,383,554

Diluted earnings per common share and common share equivalents	$	0.19		$	0.20		$	0.57		$	0.60