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Net Income Per Share
 12 Months Ended
Dec. 31, 2013
Earnings Per Share [Abstract]  
Net Income Per Share
12.
Net Income Per Share

We utilize the two-class method to compute net income per share.  The two-class method allocates a portion of net income to participating securities, which include unvested awards of share-based payments with non-forfeitable rights to receive dividends.  Net income allocated to unvested share-based payments is excluded from net income allocated to common shares.  Any undistributed losses resulting from dividends exceeding net income are not allocated to participating securities.  Basic net income per share is computed by dividing net income allocated to common shares by the weighted average number of common shares outstanding during the period.  Diluted net income per share is computed by dividing net income allocated to common shares by the weighted average number of common shares outstanding during the period, plus the dilutive effect of outstanding stock options.

The following table summarizes the net income allocated to common shares and the basic and diluted shares used in the net income per share computations:

 
 
Year ended December 31,
 
 
2013
 
2012
 
2011
 
 
(in thousands)
Net income
 
$
32,032

 
$
40,402

 
$
30,470

Less distributed and undistributed earnings allocated to participating securities
 
(916
)
 
(1,224
)
 
(908
)
Net income allocated to common shares
 
$
31,116

 
$
39,178

 
$
29,562

 
 
 
 
 
 
 
Weighted average common shares outstanding
 
24,850

 
25,007

 
25,405

Incremental shares from assumed conversions of common stock options
 
22

 
60

 
92

Adjusted weighted average common shares outstanding
 
24,872

 
25,067

 
25,497

 
 
 
 
 
 
 
Potentially dilutive securities not included in weighted average share
calculation due to anti-dilutive effect
 
8

 
29

 
29