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 June 30,						Six Months Ended June 30,
(In thousands, except per share data)	2018			2017			2018			2017
Earnings per common share - basic:
Net income	$	75,124		$	52,018		$	138,745		$	102,491
Less: Preferred stock dividends	949			949			4,547			4,548
Less: Dividends and undistributed earnings allocated to unvested restricted shares	767			361			1,409			707
Net income allocated to common shareholders - basic	$	73,408		$	50,708		$	132,789		$	97,236
Weighted average common shares outstanding	55,931			50,630			54,780			48,389
Earnings per common share - basic	1.31			1.00			2.42			2.01
Earnings per common share - diluted:
Net income allocated to common shareholders - basic	$	73,408		$	50,708		$	132,789		$	97,236
Adjustment for undistributed earnings allocated to unvested restricted shares	(7		)	(2		)	(26		)	(39		)
Net income allocated to common shareholders - diluted	$	73,401		$	50,706		$	132,763		$	97,197
Weighted average common shares outstanding	55,931			50,630			54,780			48,389
Dilutive potential common shares	356			354			353			362
Weighted average common shares outstanding - diluted	56,287			50,984			55,133			48,751
Earnings per common share - diluted	$	1.30		$	0.99		$	2.41		$	1.99

For the three months ended June 30, 2018, and 2017, the calculations for basic shares outstanding exclude the weighted average shares owned by the Recognition and Retention Plan (“RRP”) of 595,856 and 365,087, respectively. For the six months ended June 30, 2018, and 2017, basic shares outstanding exclude 601,018 and 385,876 shares owned by the RRP, respectively.

The effects from the assumed exercises of 156,988 and 69,289 stock options were not included in the computation of diluted earnings per share for the three months ended June 30, 2018 and 2017, respectively, because such amounts would have had an antidilutive effect on earnings per common share. For the six months ended June 30, 2018, and 2017, the effects from the assumed exercise of 156,988 and 69,289 stock options, respectively, were not included in the computation of diluted earnings per share because such amounts would not have an antidilutive effect on earnings per common share.