Earnings Per Share

9 Months Ended

Sep. 30, 2022

Accounting Standards Codification ("ASC") Topic 260, Earnings per Share ("ASC 260") requires a company that has participating security holders (for example, holders of unvested restricted stock that have non-forfeitable dividend rights) to utilize the two-class method for calculating earnings per share (“EPS”) unless the treasury stock method results in lower EPS. The two-class method is an allocation of earnings/(loss) between the holders of common stock and a company’s participating security holders. Under the two-class method, earnings/(loss) for the reporting period are allocated between common shareholders and other security holders based on their respective rights to receive distributed earnings (i.e., dividends) and undistributed earnings (i.e., net income/(loss)). Our common shares outstanding are comprised of shareholder owned common stock and shares of unvested restricted stock held by participating security holders. Basic EPS is calculated by dividing income or loss attributable to common stockholders by the weighted average number of shares of common stock outstanding, excluding participating shares in accordance with ASC 260. To calculate diluted EPS, basic EPS is adjusted to include the effect of potentially dilutive stock options outstanding and contingently issuable equity awards. The table below shows our basic and diluted EPS calculations.


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021

	(Dollars in thousands, except per share amounts)
Numerator
Net income	$	144,400	$	145,954	$	482,363	$	410,996
Less: distributed earnings allocated to participating securities	(180)		(155)		(535)		(446)
Less: undistributed earnings allocated to participating securities	(522)		(602)		(1,784)		(1,668)
Net income attributable to common stockholders (numerator for basic earnings per share)	143,698		145,197		480,044		408,882
Add back: undistributed earnings allocated to participating securities	522		602		1,784		1,668
Less: undistributed earnings reallocated to participating securities	(513)		(584)		(1,745)		(1,615)
Numerator for diluted earnings per share under two class method	$	143,707	$	145,215	$	480,083	$	408,935

Denominator
Weighted-average common shares outstanding	70,880,405		70,301,085		70,829,761		70,130,853
Add: dilutive effect of stock options	1,189,243		2,202,045		1,573,814		2,330,667
Add: dilutive effect of contingently issuable equity awards	659,805		296,881		489,060		308,912
Denominator for diluted earnings per share under two class method	72,729,453		72,800,011		72,892,635		72,770,432

Basic Earnings Per Common Share	$	2.03	$	2.07	$	6.78	$	5.83
Diluted Earnings Per Common Share	$	1.98	$	1.99	$	6.59	$	5.62

Diluted EPS for both the three and nine months ended September 30, 2022 excluded options to purchase 1,861,534 shares of common stock, because the effect of their inclusion would be anti-dilutive. There were 15,000 anti-dilutive options for both the three and nine months ended September 30, 2021.