Earnings Per Common Share

9 Months Ended

Sep. 30, 2014

Earnings Per Share [Abstract]

Earnings Per Common Share

Earnings Per Common Share

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

	Three months ended September 30,				Nine months ended September 30,
(In thousands, except per share data)	2014		2013		2014		2013
Earnings for basic and diluted earnings per common share:
Net income available to common shareholders	$	47,819	$	44,666	$	140,820	$	127,631
Less: Earnings allocated to participating securities	171		162		530		497
Net income allocated to common shareholders	$	47,648	$	44,504	$	140,290	$	127,134
Shares:
Weighted-average common shares outstanding - basic	89,888		89,759		89,850		88,318
Effect of dilutive securities:
Stock options and restricted stock	464		451		471		406
Warrants - Series A1 and A2	—		—		—		1,300
Warrants - other	262		213		270		169
Weighted-average common shares outstanding - diluted	90,614		90,423		90,591		90,193
Earnings per common share:
Basic	$	0.53	$	0.50	$	1.56	$	1.44
Diluted	0.53		0.49		1.55		1.41

Stock Options

Options to purchase 0.8 million shares for both the three and nine months ended September 30, 2014, respectively, and 1.1 million shares and 1.2 million for the three and nine months ended September 30, 2013, 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 presented.

Restricted Stock

Non-participating restricted stock awards of 157 thousand shares and 178 thousand shares for the three and nine months ended September 30, 2014, respectively, and 189 thousand shares and 224 thousand shares for the three and nine months ended September 30, 2013, 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 presented.

Warrants

Series A1 and A2: The Series A1 and A2 warrants issued in connection with the Warburg investment were exchanged in a cashless exercise on March 22, 2013. The weighted-average dilutive effect of these warrants prior to the exchange is included in the calculation of diluted earnings per share for the nine months ended September 30, 2013 because the exercise price of the warrants was less than the average market price of Webster's common stock for that period.

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 September 30, 2014 and 2013. The weighted-average dilutive effect of these warrants is included in the calculation of diluted earnings per share for the three and nine months ended September 30, 2014 and 2013 because the exercise price of the warrants was less than the average market price of Webster’s common stock for the respective periods presented.

Series A Preferred Stock

The Series A Preferred Stock represents potential issuable common stock at September 30, 2014 and 2013. 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 three and nine months ended September 30, 2014 and 2013.