Earnings Per Common Share

The calculation of basic and diluted earnings per common share follows:



	Three months ended June 30,						Six months ended June 30,
(In thousands, except per share data)	2013			2012			2013			2012
Earnings for basic and diluted earnings per common share:
Net income available to common shareholders	$	43,734		$	40,625		$	82,965		$	78,948
Less: Dividends to participating shares	(56		)	(44		)	(88		)	(64		)
Income allocated to participating shares	(129		)	(160		)	(247		)	(320		)
Net income allocated to common shareholders	$	43,549		$	40,421		$	82,630		$	78,564

Shares:
Weighted average common shares outstanding - basic	89,645			87,291			87,585			87,254
Effect of dilutive securities:
Stock options and restricted stock	290			252			308			274
Warrants - Series A1 and A2	—			3,908			1,917			4,031
Warrants - other	152			92			143			110
Weighted average common shares outstanding - diluted	90,087			91,543			89,953			91,669

Earnings per common share:
Basic	$	0.49		$	0.46		$	0.94		$	0.90
Diluted	$	0.48		$	0.44		$	0.92		$	0.86

Stock Options

Options to purchase 1.6 million and 2.0 million shares for both the three and six months ended June 30, 2013 and 2012, respectively, were excluded from the calculation of diluted earnings per share because the options’ exercise prices were greater than the average market price of Webster's common stock for the respective periods.

Restricted Stock

Non-participating restricted stock awards of 254 thousand shares and 253 thousand shares for the three and six months ended June 30, 2013, respectively, and 148 thousand shares and 154 thousand shares for the three and six months ended June 30, 2012, respectively, whose issuance is contingent upon the satisfaction of certain performance conditions, were deemed to be anti-dilutive and, therefore, are excluded from the calculation of diluted earnings per share for the respective periods.

Series A Preferred Stock

The Series A Preferred Stock at June 30, 2013 and 2012 represents potential issuable common stock of 1.1 million shares for each period. The weighted average effect of the potential issuable common stock associated with the Series A Preferred Stock was deemed to be anti-dilutive and, therefore, is excluded from the calculation of diluted earnings per share for the three and six months ended June 30, 2013 and 2012.

Warrants

Series A1 and A2: The Series A1 and A2 warrants issued in connection with the Warburg investment represented an aggregate 8.6 million potential issuable shares of common stock while outstanding. On March 22, 2013, the Company issued 4,564,930 shares of its common stock to Warburg in exchange for all the outstanding Series A1 and A2 warrants in a cashless exercise based on an exercise price of 11.50 per share. The weighted average dilutive effect of these warrants, prior to the March 22, 2013 exercise, is included in the calculation of diluted earnings per share for the six months ended June 30, 2013 and the three and six months ended June 30, 2012 because the exercise price of the warrants was less than the average market price of Webster's common stock for the respective periods.

Other: Warrants initially issued to the U.S. Treasury and sold in a secondary public offering on June 8, 2011 represent 0.7 million potential issuable shares of common stock at both June 30, 2013 and 2012. The weighted average dilutive effect of these warrants is included in the calculation of diluted earnings per share for the three and six months ended June 30, 2013 and 2012 because the exercise price of the warrants was less than the average market price of Webster’s common stock for the respective periods.