EARNINGS PER SHARE

6 Months Ended

Jun. 30, 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 2020 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 and six months ended June 30, 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 June 30,				For the six months ended June 30,
EPS Calculations (in thousands, except per share amounts)	2020		2019		2020		2019
Calculation of basic EPS
Walker & Dunlop net income	$	62,059	$	42,196	$	109,888	$	86,414
Less: dividends and undistributed earnings allocated to participating securities		1,873		1,328		3,392		2,835
Net income applicable to common stockholders	$	60,186	$	40,868	$	106,496	$	83,579
Weighted-average basic shares outstanding		30,352		29,985		30,288		29,834
Basic EPS	$	1.98	$	1.36	$	3.52	$	2.80
Calculation of diluted EPS
Net income applicable to common stockholders	$	60,186	$	40,868	$	106,496	$	83,579
Add: reallocation of dividends and undistributed earnings based on assumed conversion		25		25		57		62
Net income allocated to common stockholders	$	60,211	$	40,893	$	106,553	$	83,641
Weighted-average basic shares outstanding		30,352		29,985		30,288		29,834
Add: weighted-average diluted non-participating securities		508		759		672		886
Weighted-average diluted shares outstanding		30,860		30,744		30,960		30,720
Diluted EPS	$	1.95	$	1.33	$	3.44	$	2.72

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. 537 thousand and an immaterial number of average restricted shares were excluded from the computation of diluted earnings per share under the treasury method for the three and six months ended June 30, 2020, respectively, and an immaterial number were excluded for the three and six months ended June 30, 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).