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 March 31,
(In thousands, except per share data)	2018			2017
Earnings per common share - basic:
Net income	$	63,621		$	50,473
Less: Preferred stock dividends	3,598			3,599
Less: Dividends and undistributed earnings allocated to unvested restricted shares	639			346
Net income allocated to common shareholders - basic	$	59,384		$	46,528
Weighted average common shares outstanding	53,616			46,123
Earnings per common share - basic	1.11			1.01
Earnings per common share - diluted:
Net income allocated to common shareholders - basic	$	59,384		$	46,528
Adjustment for undistributed earnings allocated to unvested restricted shares	(18		)	(37		)
Net income allocated to common shareholders - diluted	$	59,366		$	46,491
Weighted average common shares outstanding	53,616			46,123
Dilutive potential common shares	351			373
Weighted average common shares outstanding - diluted	53,967			46,496
Earnings per common share - diluted	$	1.10		$	1.00

For the three months ended March 31, 2018, and 2017, the calculations for basic shares outstanding exclude the weighted average shares owned by the Recognition and Retention Plan (“RRP”) of 606,442 and 406,896, respectively.

The effects from the assumed exercises of 156,737 and 70,456 stock options were not included in the computation of diluted earnings per share for the three months ended March 31, 2018 and 2017, respectively, because such amounts would have had an antidilutive effect on earnings per common share.