Earnings Per Common Share 
 
The Company applies the two-class method of computing basic and diluted EPS. Under the two-class method, net income is allocated between common stock and participating securities based on dividend rights and participation in undistributed earnings. In connection with the Pacific Premier acquisition, the Company issued certain RSAs under share-based compensation plans that qualify as participating securities.

Basic EPS is calculated by dividing net income allocable to common shareholders by the weighted‑average common shares outstanding, excluding participating securities. Diluted EPS reflects the weighted‑average common shares adjusted for potential dilutive shares, excluding participating securities and any anti‑dilutive instruments.

The following is a computation of basic and diluted earnings per common share for the years ended December 31, 2025, 2024, and 2023: 
Year Ended
(in millions, except per share amounts, shares in thousands)202520242023
Net income$550 $534 $349 
Less: dividends and undistributed earnings allocated to participating securities— — 
Net income allocated to common shares $549 $534 $349 
Weighted average number of common shares outstanding - basic
238,022 208,463 195,304 
Dilutive effect of share-based compensation
1,099 874 567 
Weighted average number of common shares outstanding - diluted
239,121 209,337 195,871 
Earnings per common share:  
Basic
$2.31 $2.56 $1.79 
Diluted
$2.30 $2.55 $1.78 

The following table represents the weighted average outstanding restricted stock awards and restricted stock units that were not included in the computation of diluted earnings per share because their effect would be anti-dilutive for the years ended December 31, 2025, 2024, and 2023:
Year Ended
(shares in thousands)202520242023
Restricted stock awards and units129227727

Historical Timeline

Fiscal YearFiled
2025Feb 26, 2026Showing above
2024Feb 25, 2025
2023Feb 27, 2024
2022Feb 24, 2023

About Earnings Per Share Disclosures

The earnings per share disclosure breaks down the calculation from net income to both basic and diluted EPS, revealing the full impact of a company's capital structure on per-share economics. The reconciliation between basic and diluted share counts exposes how many stock options, RSUs, convertible securities, and warrants are potentially dilutive to existing shareholders.

Key signals: a widening gap between basic and diluted shares indicates growing dilution from equity compensation or convertible instruments. Anti-dilutive securities excluded from the diluted calculation deserve attention — they represent latent dilution that will materialize if the stock price rises. Watch for the effect of share buybacks on per-share metrics: EPS growth driven primarily by repurchases rather than income growth signals weakening fundamentals. Compare year-over-year changes in the diluted share count against equity compensation expense to assess whether management is effectively managing dilution.