Earnings Per Share

12 Months Ended

Dec. 31, 2016

(11) Earnings Per Share

The Company computes earnings per share in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 260, Earnings Per Share (“ASC 260”). TrustCo adopted FASB Staff Position on Emerging Issues Task Force 03-6-1, Determining Whether Instruments Granted in Share-Based Payment Transactions Are Participating Securities, as codified in FASB ASC 260-10 (“ASC 260-10”), which clarified that unvested share-based payment awards that contain nonforfeitable rights to receive dividends or divided equivalents (whether paid or unpaid) are participating securities, and thus, should be included in the two-class method of computing earnings per share (“EPS”). Participating securities under this statement include the unvested employees’ and directors’ restricted stock awards with time-based vesting, which receive nonforfeitable dividend payments. At December 31, 2016 and 2015, the Company no longer has any unvested awards that would be considered participating securities.

A reconciliation of the component parts of earnings per share for 2016, 2015 and 2014 follows:

(dollars in thousands,
except per share data)
	2016		2015		2014
For the years ended
December 31:
Net income	$	42,601		42,238		44,193
Less: Net income allocated to participating securities		-		-		43
Net income allocated to common shareholders	$	42,601		42,238		44,150
Weighted average common shares outstanding including participating securities		95,548		95,103		94,721
Less: Participating securities		-		-		93
Weighted average common shares		95,548		95,103		94,628
Effect of Dilutive Securities:
Stock Options		100		110		125
Weighted average common shares including potential dilutive shares		95,648		95,213		94,753

Basic EPS	$	0.446		0.444		0.467
Diluted EPS	$	0.445		0.444		0.466

As of December 31, 2016, 2015 and 2014, the weighted average number of antidilutive stock options excluded from diluted earnings per share was approximately 1.4 million, 1.5 million, and 2.3 million, respectively. The stock options are antidilutive because the strike price is greater than the average fair value of the Company’s common stock for the periods presented.