Earnings Per Share

3 Months Ended

Mar. 31, 2023

Accounting Standards Codification ("ASC") Topic 260, Earnings per Share ("ASC 260") requires a company that has participating security holders (for example, holders of unvested restricted stock that have non-forfeitable dividend rights) to utilize the two-class method for calculating earnings per share (“EPS”) unless the treasury stock method results in lower EPS. The two-class method is an allocation of earnings/(loss) between the holders of common stock and a company’s participating security holders. Under the two-class method, earnings/(loss) for the reporting period are allocated between common shareholders and other security holders based on their respective rights to receive distributed earnings (i.e., dividends) and undistributed earnings (i.e., net income/(loss)). Our common shares outstanding are comprised of shareholder owned common stock and shares of unvested restricted stock held by participating security holders. Basic EPS is calculated by dividing income or loss attributable to common stockholders by the weighted average number of shares of common stock outstanding, excluding participating shares in accordance with ASC 260. To calculate diluted EPS, basic EPS is adjusted to include the effect of potentially dilutive stock options outstanding and contingently issuable equity awards. The table below shows our basic and diluted EPS calculations.


	Three Months Ended March 31,
	2023		2022

	(Dollars in thousands, except per share amounts)
Numerator
Net income	$	80,700	$	148,421
Less: distributed earnings allocated to participating securities	(216)		(194)
Less: undistributed earnings allocated to participating securities	(230)		(562)
Net income attributable to common stockholders (numerator for basic earnings per share)	80,254		147,665
Add back: undistributed earnings allocated to participating securities	230		562
Less: undistributed earnings reallocated to participating securities	(226)		(546)
Numerator for diluted earnings per share under two-class method	$	80,258	$	147,681

Denominator
Weighted-average common shares outstanding	72,647,659		70,766,146
Add: dilutive effect of stock options	1,355,303		1,998,156
Add: dilutive effect of contingently issuable equity awards	19,027		174,112
Denominator for diluted earnings per share under two-class method	74,021,989		72,938,414

Basic Earnings Per Common Share	$	1.10	$	2.09
Diluted Earnings Per Common Share	$	1.08	$	2.02

Diluted EPS for the three months ended March 31, 2023 and 2022 both excluded options to purchase 15,000 shares of common stock, because the effect of their inclusion would be anti-dilutive.