Earnings Per Common Share

The calculation of basic and diluted earnings per common share from continuing and discontinued operations follows:



	Years ended December 31,
(In thousands, except per share data)	2013			2012			2011
Earnings from continuing operations for basic and diluted earnings per common share:
Net income from continuing operations available to common shareholders	$	168,746		$	171,237		$	146,098
Less: Dividends to participating shares	(179		)	(134		)	(70		)
Income allocated to participating shares	(438		)	(614		)	(666		)
Net income allocated to common shareholders	$	168,129		$	170,489		$	145,362
Earnings from discontinued operations for basic and diluted earnings per common share:
Net income from discontinued operations available to common shareholders	$	—		$	—		$	1,995
Shares:
Weighted average common shares outstanding - basic	88,713			87,211			87,007
Effect of dilutive securities:
Stock options and restricted stock	436			281			368
Warrants - Series A1 and A2	922			4,048			4,147
Warrants - other	190			109			166
Weighted average common shares outstanding - diluted	90,261			91,649			91,688

Earnings from continuing operations per common share:
Basic	$	1.90		$	1.96		$	1.67
Diluted	$	1.86		$	1.86		$	1.59
Earnings from discontinued operations per common share:
Basic	$	—		$	—		$	0.02
Diluted	$	—		$	—		$	0.02
Earnings per common share:
Basic	$	1.90		$	1.96		$	1.69
Diluted	$	1.86		$	1.86		$	1.61

Stock Options

Stock options to purchase 0.8 million, 1.7 million and 1.7 million common shares for the years ended December 31, 2013, 2012 and 2011, respectively, were excluded from the calculation of diluted earnings per share because the exercise price of the options was greater than the average market price of the Webster's common stock for the respective periods.

Restricted Stock

Non-participating restricted stock awards totaling 201,366, 138,332 and 14,529 shares for the years ended December 31, 2013, 2012 and 2011, 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.

Warrants

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 years ended December 31, 2013, 2012 and 2011, 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 December 31, 2013, 2012 and 2011. The weighted-average dilutive effect of these warrants is included in the calculation of diluted earnings per share for the years ended December 31, 2013, 2012 and 2011, because the exercise price of the warrants was less than the average market price of Webster’s common stock for the respective periods.

Series A Preferred Stock

Series A Preferred Stock represents potential issuable common stock at December 31, 2013, 2012 and 2011. The weighted-average effect of 1.1 million shares of 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 years ended December 31, 2013, 2012 and 2011.