EARNINGS PER SHARE

Share-based payment awards that entitle holders to receive non-forfeitable dividends before vesting are considered participating securities that are included in the calculation of earnings per share using the two-class method. The two-class method is an earnings allocation formula under which earnings per share is calculated for common stock and participating securities according to dividends declared and participating rights in undistributed earnings. Under this method, all earnings, distributed and undistributed, are allocated to common shares and participating securities based on their respective rights to receive dividends.

The following table presents the calculation of basic and diluted earnings per share for the periods indicated.



	Three Months Ended September 30,					Nine Months Ended September 30,
(In thousands, except per share data)	2017		2016			2017		2016
Earnings per common share - basic:
Net income	$	29,644	$	48,068		$	132,135	$	141,647
Less: Preferred stock dividends	3,598		3,590			8,146		7,020
Less: Dividends and undistributed earnings allocated to unvested restricted shares	283		462			1,052		1,464
Net income allocated to common shareholders - basic	$	25,763	$	44,016		$	122,937	$	133,163
Weighted average common shares outstanding	52,424		40,618			49,749		40,699
Earnings per common share - basic	0.49		1.08			2.47		3.27
Earnings per common share - diluted:
Net income allocated to common shareholders - basic	$	25,763	$	44,016		$	122,937	$	133,163
Adjustment for undistributed earnings allocated to unvested restricted shares	8		(4		)	—		(17		)
Net income allocated to common shareholders - diluted	$	25,771	$	44,012		$	122,937	$	133,146
Weighted average common shares outstanding	52,424		40,618			49,749		40,699
Dilutive potential common shares	346		193			357		119
Weighted average common shares outstanding - diluted	52,770		40,811			50,106		40,818
Earnings per common share - diluted	$	0.49	$	1.08		$	2.45	$	3.26

For the three months ended September 30, 2017, and 2016, the calculations for basic shares outstanding exclude the weighted average shares owned by the Recognition and Retention Plan (“RRP”) of 511,562 and 434,468, respectively. For the nine months ended September 30, 2017, and 2016, basic shares outstanding exclude 428,232 and 456,921 shares owned by the RRP, respectively.

The effects from the assumed exercises of 72,239 and 73,882 stock options were not included in the computation of diluted earnings per share for the three months ended September 30, 2017 and 2016, respectively, because such amounts would have had an antidilutive effect on earnings per common share. For the nine months ended September 30, 2017, and 2016, the effects from the assumed exercise of 69,289 and 268,257 stock options, respectively, were not included in the computation of diluted earnings per share because such amounts would have had an antidilutive effect on earnings per common share.