Earnings Per Share

9 Months Ended

Sep. 30, 2016

EARNINGS PER SHARE

Basic earnings per share is calculated by dividing net income by the weighted-average common shares outstanding. Diluted earnings per share is calculated by dividing net income by the weighted-average common shares and potentially dilutive securities outstanding during the period.

Earnings per share is calculated using the two-class method, which requires the allocation of earnings to each class of common stock outstanding and to unvested stock-based payment awards that participate equally in dividends with common stock, also referred to herein as unvested participating shares.

The Company’s unvested stock-based payment awards include unvested shares awarded as restricted stock awards at the discretion of the Company’s Board of Directors. The restricted stock awards generally vest at the end of three years.

Earnings per Share - Basic

The following table sets forth the computation of earnings per share using the two-class method for unvested participating shares (in thousands, except share and per share amounts):



	Three months ended September 30,				Nine months ended September 30,
	2016		2015		2016		2015
Basic earnings per share:
Net income	$	22,510	$	20,558	$	77,640	$	70,009

Allocation of net income to common stockholders:
Common stock	$	22,306	$	20,415	$	76,954	$	69,536
Unvested participating shares	204		143		686		473
	$	22,510	$	20,558	$	77,640	$	70,009

Weighted average number of common shares:
Common stock	58,928,264		60,290,842		59,326,525		61,112,263
Unvested participating shares	538,795		422,725		528,887		415,472

Earnings per share:
Common stock	$	0.38	$	0.34	$	1.30	$	1.14

Earnings per Share - Diluted

The Company calculates diluted earnings per share for common stock using the more dilutive of (1) the treasury stock method, or (2) the two-class method. The following table sets forth the computation of diluted earnings per share using the two-class method for unvested participating shares (in thousands, except share and per share amounts):



	Three months ended September 30,						Nine months ended September 30,
	2016			2015			2016			2015
Diluted earnings per share:
Earnings allocated to common stock	$	22,306		$	20,415		$	76,954		$	69,536
Plus earnings allocated to unvested participating shares	204			143			686			473
Less adjusted earnings allocated to unvested participating shares	(199		)	(139		)	(670		)	(460		)
Earnings allocated to common stock	$	22,311		$	20,419		$	76,970		$	69,549

Weighted average number of common shares:
Common stock	58,928,264			60,290,842			59,326,525			61,112,263
Effect of dilutive securities	1,347,638			1,555,883			1,410,660			1,519,181
	60,275,902			61,846,725			60,737,185			62,631,444

Earnings per share:
Common stock	$	0.37		$	0.33		$	1.27		$	1.11

Options outstanding to purchase 0.5 million shares of common stock were excluded from diluted earnings per share for the three and nine months ended September 30, 2016, and 0.1 million and 0.3 million shares of common stock were excluded from diluted earnings per share for the three and nine months ended September 30, 2015, respectively, since their effect was anti-dilutive, which may be dilutive in the future.