EARNINGS PER SHARE

3 Months Ended

Mar. 31, 2020

EARNINGS PER SHARE

Earnings Per Share

NOTE 10—EARNINGS PER SHARE

EPS is calculated under the two-class method. The two-class method allocates all earnings (distributed and undistributed) to each class of common stock and participating securities based on their respective rights to receive dividends. The Company grants share-based awards to various employees and nonemployee directors under the 2015 Equity Incentive Plan that entitle recipients to receive nonforfeitable

dividends during the vesting period on a basis equivalent to the dividends paid to holders of common stock. These unvested awards meet the definition of participating securities.

The following table presents the calculation of basic and diluted EPS for the three months ended March 31, 2020 and 2019 under the two-class method. Participating securities are included in the calculation of diluted EPS using the two-class method, as this computation was more dilutive than the treasury-stock method.

	For the three months ended March 31,
EPS Calculations (in thousands, except per share amounts)	2020		2019
Calculation of basic EPS
Walker & Dunlop net income	$	47,829	$	44,218
Less: dividends and undistributed earnings allocated to participating securities		1,510		1,509
Net income applicable to common stockholders	$	46,319	$	42,709
Weighted-average basic shares outstanding		30,226		29,680
Basic EPS	$	1.53	$	1.44
Calculation of diluted EPS
Net income applicable to common stockholders	$	46,319	$	42,709
Add: reallocation of dividends and undistributed earnings based on assumed conversion		34		38
Net income allocated to common stockholders	$	46,353	$	42,747
Weighted-average basic shares outstanding		30,226		29,680
Add: weighted-average diluted non-participating securities		934		1,004
Weighted-average diluted shares outstanding		31,160		30,684
Diluted EPS	$	1.49	$	1.39

The assumed proceeds used for calculating the dilutive impact of restricted stock awards under the treasury-stock method includes the unrecognized compensation costs associated with the awards. An immaterial number of average restricted shares were excluded from the computation of diluted earnings per share under the treasury method for the three months ended March 31, 2020 and 2019 because the effect would have been anti-dilutive (the grant date market price of the restricted shares was greater than the average market price of the Company’s shares during the periods presented).