Net Income Per Share

9 Months Ended

Sep. 30, 2023

Net Income Per ShareBasic 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. The Company’s Restricted Stock Awards (“RSA”) 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 Restricted Stock Units (“RSU”) and 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. This 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 nine months ended September 30, 2023 and 2022 (in thousands, except for earnings per share):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Weighted-average shares:
Common shares outstanding	30,629		31,009		30,723		32,791
RSAs	21		21		21		21
Total weighted-average shares	30,650		31,030		30,744		32,812
Earnings per common share—Basic
Net income	$	70,550	$	66,027	$	204,512	$	176,698
Less: Undistributed earnings allocated to RSAs	(48)		(44)		(138)		(112)
Net income available to common shareholders—Basic	$	70,502	$	65,983	$	204,374	$	176,586

Net income per common share—Basic	$	2.30	$	2.13	$	6.65	$	5.39

Basic weighted-average common shares outstanding	30,629		31,009		30,723		32,791
Effect of diluted shares	1,133		1,244		1,116		1,307
Diluted weighted-average shares outstanding	31,762		32,253		31,839		34,098

Net income per common share—Diluted	$	2.22	$	2.05	$	6.42	$	5.18

During the nine months ended September 30, 2023, the Company had (in thousands) 0.6 stock options 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 nine months ended September 30, 2022, the Company had (in thousands) 274.4 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.