UNITED FIRE GROUP INCUFCS

UNITED FIRE GROUP INC Earnings Per Share Disclosure

10-KFiled Feb 26, 20262 min read
EARNINGS PER COMMON SHARE
The following table sets forth the computation of basic and diluted earnings per share:
 Years Ended December 31,
202520242023
(In Thousands Except Share and Per Share Data)BasicDilutedBasicDilutedBasicDiluted
Net income (loss)$118,191 $118,191 $61,957 $61,957 $(29,700)$(29,700)
Weighted-average common shares outstanding25,470,451 25,470,451 25,319,973 25,319,973 25,249,269 25,249,269 
Add dilutive effect of restricted stock awards— 882,462 — 597,787 — — 
Add dilutive effect of stock options— — — — — — 
Weighted-average common shares25,470,451 26,352,913 25,319,973 25,917,760 25,249,269 25,249,269 
Earnings (loss) per common share$4.64 $4.48 $2.45 $2.39 $(1.18)$(1.18)
Awards excluded from diluted calculation(1)
— 38,502 — 222,186 — 791,735 
(1)Outstanding awards that are not "in-the-money" are excluded from the diluted earnings per share calculation because the effect of including them would have inherently been anti-dilutive.
Basic earnings per share is computed by dividing net income by the weighted-average number of common shares outstanding during the reporting period. Diluted earnings per share gives effect to all dilutive common shares outstanding during the reporting period. The dilutive shares we consider in our diluted earnings per share calculation relate to our outstanding stock options, restricted stock awards, restricted stock unit awards, and performance stock unit awards.
We determine the dilutive effect of our outstanding stock options using the "treasury stock" method. Under this method, we assume the exercise of all of the outstanding stock options whose exercise price is less than the weighted-average market value of our common stock during the reporting period. This method also assumes that the proceeds from the hypothetical stock option exercises are used to repurchase shares of our common stock at the
weighted-average market value of the stock during the reporting period. The net of the assumed stock options exercised and assumed common shares repurchased represents the number of dilutive common shares, which we add to the denominator of the earnings per share calculation.
Under applicable accounting guidance, companies in a loss position are required to use basic weighted-average common shares outstanding in the calculation of diluted loss per share. Therefore, as a result of our net loss for the year ended December 31, 2023, we were required to use basic weighted-average common shares outstanding in the calculation of diluted loss per share, as the inclusion of 282,515 restricted shares would have been antidilutive to the calculation. If we had not incurred a net loss for the year ended December 31, 2023, diluted weighted-average common shares would have been 25,531,784.

Historical Timeline

Fiscal YearFiled
2025Feb 26, 2026Showing above
2024Feb 26, 2025
2023Feb 29, 2024
2022Feb 28, 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.

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