Earnings Per Common Share

The two-class method is used in the calculation of basic and diluted earnings per share. Under the two-class method, earnings available to common shareholders for the period are allocated between common shareholders and participating securities according to dividends declared (or accumulated) and participating rights in undistributed earnings.

Average shares of common stock for diluted net income per common share include shares to be issued upon the exercise of stock options granted under the Corporation’s share-based compensation plans, restricted stock units that may be converted to stock, restricted stock awards and stock to be issued under the deferred stock compensation plan for non-employee directors.

The factors used in the earnings per share computation follow:



	Three Months Ended September 30,						Nine Months Ended September 30,
(In thousands, except per share data)	2017			2016			2017			2016
Net income	$	40,459		$	11,484		$	140,077		$	60,864
Net income allocated to participating securities	129			37			566			78
Net income allocated to common shareholders ⁽¹⁾	$	40,330		$	11,447		$	139,511		$	60,786
Weighted average common shares - issued	71,139			49,109			71,077			41,881
Average unvested restricted share awards	(228		)	(159		)	(290		)	(53		)
Weighted average common shares outstanding - basic	70,911			48,950			70,787			41,828
Effect of dilutive securities
Weighted average common stock equivalents	594			687			667			493
Weighted average common shares outstanding - diluted	71,505			49,637			71,454			42,321
EPS available to common shareholders
Basic earnings per common share	$	0.57		$	0.23		$	1.98		$	1.45
Diluted earnings per common share	$	0.56		$	0.23		$	1.95		$	1.42


⁽¹⁾	Net income allocated to common shareholders for basic and diluted earnings per share may differ under the two-class method as a result of adding common share equivalents for options and warrants to dilutive shares outstanding, which alters the ratio used to allocate net income to common shareholders and participating securities for the purposes of calculating diluted earnings per share.

For effect of dilutive securities, the average stock valuation is $47.68 per share and $42.40 per share for the three months ended September 30, 2017 and 2016, respectively and $49.07 and $37.85 for the nine months ended September 30, 2017 and 2016, respectively.

The average number of exercisable employee stock options outstanding that were "out-of-the-money," whereby the option exercise price per share exceeded the market price per share and, therefore, were not included in the computation of diluted earnings per common share because they would have been anti-dilutive totaled 125,280 and 102,245 for the three and nine months ended September 30, 2017 and zero for both the three and nine months ended September 30, 2016.