Computation of Earnings per Common Share

6 Months Ended

Jun. 30, 2020

Computation of Earnings per Common Share

Note 2. Computation of Earnings per Common Share

Basic 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 outstanding in-the-money stock options 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						Six Months Ended
	June 30,						June 30,
(in thousands, except share and per share amounts)	2020			2019			2020			2019
Net income available to common shareholders	$	97,140		$	89,039		$	189,261		$	178,409
Less: Dividends paid on and earnings allocated to participating securities		(1,186	)		(1,055	)		(3,331	)		(2,177	)
Earnings applicable to common stock	$	95,954		$	87,984		$	185,930		$	176,232
Weighted average common shares outstanding		461,933,533			465,351,586			463,463,751			465,422,251
Basic earnings per common share	$	0.21		$	0.19		$	0.40		$	0.38
Earnings applicable to common stock	$	95,954		$	87,984		$	185,930		$	176,232
Weighted average common shares outstanding		461,933,533			465,351,586			463,463,751			465,422,251
Potential dilutive common shares		555,960			289,851			487,317			145,727
Total shares for diluted earnings per common share computation		462,489,493			465,641,437			463,951,068			465,567,978
Diluted earnings per common share and common share equivalents	$	0.21		$	0.19		$	0.40		$	0.38