4 .	Earnings Per Share

ASC

260

requires a

company that has participating security holders (for example, holders of unvested restricted stock that has nonforfeitable 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 participating security holders consisting of shareholders of unvested restricted stock. 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 further adjusted to include the effect of potential dilutive stock options outstanding. The following table shows our basic and diluted EPS calculations:

	Three Months Ended
	March 31,
	2017			2016
	(Dollars in thousands, except per share amounts)
Numerator
Net income	$	22,249		$	9,563
Less: distributed earnings allocated to participating securities		(68	)		(40	)
Less: undistributed earnings allocated to participating securities		(43	)		-
Net income attributable to common stockholders (numerator for basic earnings per share)		22,138			9,523
Add back: undistributed earnings allocated to participating securities		43			-
Less: undistributed earnings reallocated to participating securities		(43	)		-
Numerator for diluted earnings per share under two class method	$	22,138		$	9,523

Denominator
Weighted-average common shares outstanding		51,340,890			51,269,370
Add: dilutive effect of stock options		249,127			5,747
Denominator for diluted earnings per share under two class method		51,590,017			51,275,117

Basic Earnings Per Common Share	$	0.43		$	0.19
Diluted Earnings Per Common Share	$	0.43		$	0.19

Diluted EPS for the

three

months ended

March

31,

2017

and

2016

excluded options to purchase approximately

4.2

million and

6.5

million shares of common stock, respectively, because the effect of their inclusion would be anti-dilutive.