Earnings per Common Share

3 Months Ended

Mar. 31, 2012

Earnings per Common Share

Earnings per Common Share

(13)  Earnings per Common Share

The Company calculates basic and diluted earnings per common share using the two-class method. Under the two-class method, net earnings are allocated to each class of common stock and participating security as if all of the net earnings for the period had been distributed. The Company’s participating securities consist of unvested restricted stock awards that contain a non-forfeitable right to receive dividends and, therefore, are considered to participate in undistributed earnings with common stockholders.

Basic earnings per common share excludes dilution and is calculated by dividing net earnings allocable to common shares by the weighted-average number of common shares outstanding for the period. Diluted earnings per common share is calculated by dividing net earnings allocable to common shares by the weighted-average number of common shares outstanding for the period, as adjusted for the potential dilutive effect of stock-based awards. We exclude potentially dilutive securities from the computation of diluted earnings per share when the effect of their inclusion would be anti-dilutive.

The following table sets forth the computation of basic and diluted earnings per common share for the three-month periods ended March 31, 2012 and 2011:

	Three Months Ended
	March 31,
(In thousands, except per share data)	2012		2011
Net earnings	$	9,473	$	7,840
Less: Net income attributable to noncontrolling interests	1,108		4,115
Net earnings attributable to FirstCity	$	8,365	$	3,725
Less: Net earnings allocable to participating securities	82		—
Net earnings allocable to common shares	$	8,283	$	3,725
Weighted-average common shares outstanding - basic	10,299		10,267
Dilutive effect of restricted stock shares	53		—
Dilutive effect of stock options	45		31
Weighted-average common shares outstanding - diluted	10,397		10,298
Net earnings per share:
Basic	$	0.80	$	0.36
Diluted	$	0.80	$	0.36

For the three-month periods ended March 31, 2012 and 2011, potentially dilutive securities representing approximately 654,000 and 523,000 shares of common stock, respectively, were excluded from the computation of diluted earnings per common share because their effect would have been anti-dilutive.