Computation of Earnings per Share

9 Months Ended

Sep. 30, 2011

Note 2. Computation of Earnings per Share

Basic earnings per share (“EPS”) is computed by dividing net income by the weighted-average number of common shares outstanding during the period. Weighted-average common shares are adjusted to exclude unallocated Employee Stock Ownership Plan (“ESOP”) shares. Diluted EPS is computed using the same method as basic EPS, however, the computation reflects the potential dilution that would occur if outstanding in-the-money stock options were exercised and converted into common stock.

Unvested stock-based compensation awards containing non-forfeitable rights to dividends are considered participating securities and therefore are included in the two-class method for calculating EPS. Under the two-class method, all earnings (distributed and undistributed) are allocated to common shares and participating securities based on their respective rights to receive dividends. The Company grants restricted stock to certain employees under its stock-based compensation plans. Recipients receive cash dividends during the vesting periods of these awards (i.e., including on the unvested portion of such awards). Since these dividends are non-forfeitable, the unvested awards are considered participating securities and have earnings allocated to them.

The following table presents the Company’s computation of basic and diluted EPS for the periods indicated:


	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands, except share and per share data)	2011		2010		2011		2010
Net income		$119,750		$135,609		$362,385		$391,185
Less: Dividends paid on and earnings allocated to participating securities		(914)		(776)		(2,732)		(2,239)

Earnings applicable to common stock		$118,836		$134,833		$359,653		$388,946


Weighted average common shares outstanding		436,243,926		434,375,863		435,980,390		433,519,634

Basic earnings per common share		$0.27		$0.31		$0.82		$0.90


Earnings applicable to common stock		$118,836		$134,833		$359,653		$388,946


Weighted average common shares outstanding		436,243,926		434,375,863		435,980,390		433,519,634
Potential dilutive common shares⁽¹⁾		33,640		468,009		371,359		370,032

Total shares for diluted earnings per share computation		436,277,566		434,843,872		436,351,749		433,889,666


Diluted earnings per common share and common share equivalents		$0.27		$0.31		$0.82		$0.90

(1)

Options to purchase 8,918,493 and 3,122,124 shares, respectively, of the Company’s common stock that were outstanding in the three and nine months ended September 30, 2011, at respective weighted average exercise prices of $15.64 and $17.32, were excluded from the respective computations of diluted EPS because their inclusion would have had an antidilutive effect. Options to purchase 2,818,863 and 2,824,373 shares, respectively, of the Company’s common stock that were outstanding in the three and nine months ended September 30, 2010, at a weighted average exercise price of $19.18, were excluded from the respective computations of diluted EPS because their inclusion would have had an antidilutive effect.