Earnings Per Share

9 Months Ended

Sep. 30, 2015

Earnings Per Share and Stockholders' Equity

Earnings Per Share

The following table sets forth the computation of earnings per common share and earnings per common share - assuming dilution:



	Three Months Ended September 30,				Nine Months Ended September 30,
	2015		2014		2015		2014
	(Dollars in thousands, except per share data)
Numerator:
Net income - numerator for earnings per common share	$	97,306	$	67,815	$	186,054	$	94,806

Denominator:
Weighted average common shares outstanding (1)	79,675,955		75,082,852		77,994,602		74,030,290
Effect of dilutive securities:
Convertible senior notes	—		1,982,089		—		2,485,974
2015 warrants and equity forward sale agreements	714,980		1,230,020		766,795		1,730,077
Stock options and deferred compensation agreements	981,271		1,115,927		1,076,166		1,185,973
Restricted stock and restricted stock units	186,430		56,222		139,747		44,944
Denominator for earnings per common share - assuming dilution	81,558,636		79,467,110		79,977,310		79,477,258

Earnings per common share	$	1.22	$	0.90	$	2.39	$	1.28
Earnings per common share - assuming dilution	$	1.19	$	0.85	$	2.33	$	1.19


(1)	Weighted average common shares outstanding include shares vested under the NMO Deferred Compensation Plan and exclude unallocated shares held by the ESOP.

Options to purchase shares of our common stock that were outstanding during the respective periods indicated but were not included in the computation of diluted earnings per share because the options' exercise price was greater than the average market price of the common shares are as follows:



Period	Number of Shares	Range of Exercise Prices
		Minimum	Maximum
Three months ended September 30, 2015	—	$—	$—
Three months ended September 30, 2014	1,275,050	$24.79	$24.79
Nine months ended September 30, 2015	—	$—	$—
Nine months ended September 30, 2014	1,275,050	$24.79	$24.79

Stockholders' Equity

In August 2015, we completed an underwritten public offering of 8,600,000 shares of our common stock at a public offering price of $25.25 per share, of which 4,300,000 shares are subject to a forward sale agreement described below. The offering of 4,300,000 shares of our common stock (shares not subject to the forward sale agreement) resulted in initial net proceeds of approximately $104.5 million (after deducting fees and expenses related to the offering). The underwriters exercised in full their option to purchase 1,290,000 additional shares of common stock, which is subject to a separate forward sale agreement. Settlement of the forward sale agreements will occur on one or more dates occurring no later than 12 months after August 12, 2015, the closing date of the offering. We used the net proceeds from the offering for a capital contribution to the capital and surplus of our primary life insurance subsidiary. If we elect to exercise our rights to physically settle the forward sales agreements, we intend to use the net proceeds from the settlement for general corporate purposes, including contributions to the capital and surplus of our life insurance subsidiaries to support their continued growth and maintain desired financial strength ratings.

The forward sale agreements had no initial fair value since they were entered into at the then market price of the common stock. The forward sale agreements are equity instruments and they qualify for an exception from derivative and fair value accounting.