Net Income Per Share

6 Months Ended

Jun. 30, 2020

(2) Net Income Per Share

Basic and diluted earnings or loss per share (“EPS”) are computed using the two-class method, which is an earnings allocation that determines EPS for each class of common stock and participating securities according to dividends declared and participation rights in

undistributed earnings. Restricted Stock Awards (“RSAs”) are considered participating securities because they are legally issued at the date of grant and holders are entitled to receive non-forfeitable dividends during the vesting term.

The computation of diluted EPS includes additional common shares, such as unvested stock options with exercise prices less than the average market price of the Company’s common stock during the period (“in-the-money options”), which would be considered outstanding under the treasury stock method. The treasury stock method assumes that additional shares would have to be issued in cases where the exercise price of stock options is less than the value of the common stock being acquired because the cash proceeds received from the stock option holder would not be sufficient to acquire that same number of shares. The Company does not compute diluted EPS in cases where the inclusion of such additional shares would be anti-dilutive in effect.

The following table sets forth the computation of basic and diluted earnings per share for the three and six months ended June 30, 2020 and 2019 (in thousands, except for earnings per share):

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2020		2019		2020		2019
Weighted-average shares:
Common shares outstanding		35,386		35,839		35,705		35,772
RSAs		95		102		95		103
Total weighted-average shares		35,481		35,941		35,800		35,875
Earnings per common share—Basic
Net income	$	24,104	$	27,455	$	53,058	$	46,653
Less: Undistributed earnings allocated to RSAs		65		78		141		134
Net income available to common shareholders—Basic	$	24,039	$	27,377	$	52,917	$	46,519

Net income per common share—Basic	$	0.68	$	0.76	$	1.48	$	1.30

Basic weighted-average common shares outstanding		35,386		35,839		35,705		35,772
Effect of diluted shares		1,942		1,550		1,975		1,605
Diluted weighted-average shares outstanding		37,328		37,389		37,680		37,377

Net income per common share—Diluted	$	0.64	$	0.73	$	1.40	$	1.24

During the three and six months ended June 30, 2020, the Company had 439,405 stock options, respectively, that were excluded due to the exercise price exceeding the average fair value of the Company’s common stock during the period. During the three and six months ended June 30, 2019, the Company had 30,500 and 0 stock options, respectively, that were excluded due to the exercise price exceeding the average fair value of the Company’s common stock during the period.