Note 4 - Earnings Per Share

3 Months Ended

Mar. 31, 2020

Notes to Financial Statements

Earnings Per Share [Text Block]

4. Earnings Per Share

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. The table below shows our basic and diluted EPS calculations.

	Three Months Ended
	March 31,
	2020			2019
	(Dollars in thousands, except per
	share amounts)
Numerator
Net income	$	36,760		$	40,550
Less: distributed earnings allocated to participating securities		(135	)		(111	)
Less: undistributed earnings allocated to participating securities		(96	)		(139	)
Net income attributable to common stockholders (numerator for basic earnings per share)		36,529			40,300
Add back: undistributed earnings allocated to participating securities		96			139
Less: undistributed earnings reallocated to participating securities		(93	)		(136	)
Numerator for diluted earnings per share under two class method	$	36,532		$	40,303
Denominator
Weighted-average common shares outstanding		62,491,238			60,939,364
Add: dilutive effect of stock options		1,862,619			1,217,846
Add: dilutive effect of performance stock units		577,368			551,124
Denominator for diluted earnings per share under two class method		64,931,225			62,708,334
Basic Earnings Per Common Share	$	0.58		$	0.66
Diluted Earnings Per Common Share	$	0.56		$	0.64

Diluted EPS for the three months ended March 31, 2020 and 2019 excluded options to purchase approximately 0.4 million and 0.5 million shares of common stock, respectively, because the effect of their inclusion would be anti-dilutive.