EARNINGS PER SHARE

Share-based payment awards that entitle holders to receive non-forfeitable dividends before vesting are considered participating securities that are included in the calculation of earnings per share using the two-class method. The two-class method is an earnings allocation formula under which earnings per share is calculated for common stock and participating securities according to dividends declared and participating rights in undistributed earnings. Under this method, all earnings, distributed and undistributed, are allocated to common shares and participating securities based on their respective rights to receive dividends.

The following table presents the calculation of basic and diluted earnings per share for the periods indicated.



	Three Months Ended September 30,					Nine Months Ended September 30,
(In thousands, except per share data)	2018			2017		2018			2017
Earnings per common share - basic:
Net income	$	101,465		$	29,644	$	240,210		$	132,135
Less: Preferred stock dividends	3,599			3,598		8,146			8,146
Less: Dividends and undistributed earnings allocated to unvested restricted shares	908			283		2,341			1,052
Net income allocated to common shareholders - basic	$	96,958		$	25,763	$	229,723		$	122,937
Weighted average common shares outstanding	55,571			52,424		55,047			49,749
Earnings per common share - basic	1.74			0.49		4.17			2.47
Earnings per common share - diluted:
Net income allocated to common shareholders - basic	$	96,958		$	25,763	$	229,723		$	122,937
Adjustment for undistributed earnings allocated to unvested restricted shares	(25		)	8		(49		)	—
Net income allocated to common shareholders - diluted	$	96,933		$	25,771	$	229,674		$	122,937
Weighted average common shares outstanding	55,571			52,424		55,047			49,749
Dilutive potential common shares	374			346		360			357
Weighted average common shares outstanding - diluted	55,945			52,770		55,407			50,106
Earnings per common share - diluted	$	1.73		$	0.49	$	4.14		$	2.45

For the three months ended September 30, 2018, and 2017, the calculations for basic shares outstanding exclude the weighted average shares owned by the RRP of 542,796 and 511,562, respectively. For the nine months ended September 30, 2018, and 2017, basic shares outstanding exclude 581,397 and 428,232 shares owned by the RRP, respectively.

The effects from the assumed exercises of 60,931 and 72,239 stock options were not included in the computation of diluted earnings per share for the three months ended September 30, 2018 and 2017, respectively, because such amounts would have had an antidilutive effect on earnings per common share. For the nine months ended September 30, 2018 and 2017, the effects from the assumed exercise of 147,834 and 69,289 stock options, respectively, were not included in the computation of diluted earnings per share because such amounts would have had an antidilutive effect on earnings per common share.