Earnings per Common Share

9 Months Ended

Sep. 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 nine-month month periods ended September 30, 2012 and 2011:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(In thousands, except per share data)	2012		2011		2012		2011
Net earnings	$	6,897	$	5,384	19,422		17,894
Less: Net income attributable to noncontrolling interests	2,130		2,654		4,803		9,011
Net earnings attributable to FirstCity	$	4,767	$	2,730	$	14,619	$	8,883
Less: Net earnings allocable to participating securities	96		25		244		60
Net earnings allocable to common shares	$	4,671	$	2,705	$	14,375	$	8,823
Weighted-average common shares outstanding - basic	10,345		10,290		10,330		10,279
Dilutive effect of restricted stock shares	45		25		28		4
Dilutive effect of stock options	46		11		44		14
Weighted-average common shares outstanding - diluted	10,436		10,326		10,402		10,297
Net earnings per share:
Basic	$	0.45	$	0.26	$	1.39	$	0.86
Diluted	$	0.45	$	0.26	$	1.38	$	0.86

For the three-month periods ended September 30, 2012 and 2011, potentially dilutive securities representing approximately 223,000 and 700,000 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 nine-month periods ended September 30, 2012 and 2011, potentially dilutive securities representing approximately 557,000 and 769,000 shares of common stock, respectively, were excluded from the computation of diluted earnings per common share because their effect would have been anti-dilutive.