Earnings Per Share

3 Months Ended

Mar. 31, 2019

In February 2019, the Company’s Compensation Committee of Board of Directors reviewed the various forms of outstanding equity awards, including restricted stock and restrict stock units, and approved that unvested restricted stock awards will be considered participating securities. Restricted stock units (“RSUs”) awarded to the Company’s named executive officers in 2018 and 2019, the vesting of which depends on the Company’s relative total shareholder return (“rTSR”) as compared to the KBW Nasdaq Regional Banking Index (“KRX”) over a three-year performance period, are not participating securities. If the Company’s KRX ranking for rTSR is below the 25^th percentile (the “threshold level”) at the end of the relevant three-year performance period, no RSUs granted to such named executive officer(s) in 2018 or 2019, as the case may be, will vest and they will be forfeited in their entirety. If the Company’s KRX rating for rTSR reaches the 25^th, 50^th, 75^th or 90^th percentiles at the end of the relevant three-year performance period, 50%, 100%, 150% or 200%, respectively, of the RSUs granted to named executive officers in 2018 or 2019, as the case may be, will vest on the third anniversary of the relevant grant date, unless earlier forfeited. As a result of the different treatment of unvested restricted stock and unvested RSUs, beginning in 2019, earnings per common share is computed using the two-class method.

Under the two-class method, distributed and undistributed earnings allocable to participating securities are deducted from net income to determine net income allocable to common shareholders, which is then used in the numerator of both basic and diluted earnings per share calculations. Basic earnings per common share are computed by dividing net income allocable to common shareholders by the weighted average number of common shares outstanding for the reporting period, excluding outstanding participating securities. Diluted earnings per common share are computed by dividing net income allocable to common shareholders by the weighted average number of common shares outstanding over the reporting period, adjusted to include the effect of potentially dilutive common shares, but excludes awards considered participating securities. The computation of diluted earnings per common share excludes the impact of the assumed exercise or issuance of securities that would have an anti-dilutive effect.

The following tables set forth the Company’s earnings per share calculations for the periods indicated:



	Three Months Ended
	March 31, 2019			December 31, 2018		March 31, 2018
	(dollars in thousands, except per share data)
Basic
Net income	$	38,718		$	39,643	$	28,002
Less: Earnings allocated to participating securities	(347		)	—		—
Net income allocated to common stockholders	38,371			39,643		28,002

Weighted average common shares outstanding	61,987,605			61,917,184		45,893,496
Basic earnings per common share	$	0.62		$	0.64	$	0.61

Diluted
Net income allocated to common stockholders	$	38,371		$	39,643	$	28,002

Weighted average common shares outstanding	61,987,605			61,917,184		45,893,496
Diluted effect of share-based compensation	298,178			539,916		758,563
Weighted average diluted common shares	62,285,783			62,457,100		46,652,059
Diluted earnings per common share	$	0.62		$	0.63	$	0.60