Earnings per Common Share

6 Months Ended

Jun. 30, 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- and six-month month periods ended June 30, 2012 and 2011:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
(In thousands, except per share data)	2012		2011		2012		2011
Net earnings	$	3,052	$	4,670	12,525		12,510
Less: Net income attributable to noncontrolling interests	1,565		2,242		2,673		6,357
Net earnings attributable to FirstCity	$	1,487	$	2,428	$	9,852	$	6,153
Less: Net earnings allocable to participating securities	29		—		147		—
Net earnings allocable to common shares	$	1,458	$	2,428	$	9,705	$	6,153
Weighted-average common shares outstanding - basic	10,345		10,279		10,322		10,273
Dilutive effect of restricted stock shares	24		—		33		—
Dilutive effect of stock options	44		25		44		21
Weighted-average common shares outstanding - diluted	10,413		10,304		10,399		10,294
Net earnings per share:
Basic	$	0.14	$	0.24	$	0.94	$	0.60
Diluted	$	0.14	$	0.24	$	0.93	$	0.60

For the three-month periods ended June 30, 2012 and 2011, potentially dilutive securities representing approximately 418,000 and 705,000 shares of common stock, respectively, were excluded from the computation of diluted earnings per common share because their effect would have been anti-dilutive.

For the six-month periods ended June 30, 2012 and 2011, potentially dilutive securities representing approximately 654,000 and 675,000 shares of common stock, respectively, were excluded from the computation of diluted earnings per common share because their effect would have been anti-dilutive.