Earnings Per Common Share

12 Months Ended

Dec. 31, 2021

The following table summarizes the calculation of basic and diluted earnings per common share:


	Years ended December 31,
(In thousands, except per share data)	2021		2020		2019
Earnings for basic and diluted earnings per common share:
Net income	$	408,864	$	220,621	$	382,723
Less: Preferred stock dividends	7,875		7,875		7,875
Net income available to common shareholders	400,989		212,746		374,848
Less: Earnings allocated to participating securities	2,302		1,272		1,863
Earnings applicable to common shareholders	$	398,687	$	211,474	$	372,985

Shares:
Weighted-average common shares outstanding - basic	89,983		89,967		91,559
Effect of dilutive securities (1)	223		184		323
Weighted-average common shares outstanding - diluted	90,206		90,151		91,882

Earnings per common share:
Basic	$	4.43	$	2.35	$	4.07
Diluted	4.42		2.35		4.06

(1)Includes stock options and performance-based restricted stock for all periods presented.

Earnings per common share is calculated under the two-class method in which all earnings (distributed and undistributed) are allocated to common stock and participating securities based on their respective rights to receive dividends. Webster may grant restricted stock, restricted stock units, non-qualified stock options, incentive stock options, or stock appreciation rights to certain employees and directors under its stock-based compensation programs, which entitle recipients to receive non-forfeitable dividends during the vesting period on a basis equivalent to the dividends paid to holders of common stock. These unvested awards meet the definition of participating securities.

Potential common shares from performance-based restricted stock awards that were not included in the computation of dilutive earnings per common share because they were anti-dilutive (the exercise price is greater than the weighted-average market price) under the treasury stock method were 56,829, 43,508, and 73,347 for the years ended December 31, 2021, 2020, and 2019, respectively. Additional information regarding the potential common shares excluded from the effect of dilutive securities can be found in Note 20: Share-Based Plans