Earnings Per Share

Basic earnings per share (“basic EPS”) is computed by dividing net income by the weighted average number of common shares outstanding for the reporting period. Diluted earnings per share (“diluted EPS”) gives effect to all dilutive potential shares outstanding resulting from employee stock options, restricted stock units, performance share units and stock appreciation rights ("SARs") during the period. The following table sets forth the computation of basic and diluted earnings per share for the three and nine months ended September 30, 2017 and 2016:



	Three Months Ended September 30,				Nine Months Ended September 30,
	2017		2016		2017		2016

Net income	$	7,197	$	7,337	$	8,791	$	7,956

Basic – weighted average shares outstanding	27,924		27,818		27,915		27,785

Effect of dilutive potential securities	259		133		209		161

Diluted – weighted average shares outstanding	28,183		27,951		28,124		27,946

Net income (per share)
Basic	$	0.26	$	0.26	$	0.31	$	0.29
Diluted	0.26		0.26		0.31		0.28

The shares used in the calculation of diluted EPS exclude options and SARs to purchase shares where the exercise price was greater than the average market price of common shares for the period and the effect of the inclusion would be anti-dilutive. Such shares aggregated approximately 1.3 million and 1.2 million for the three and nine months ended September 30, 2017, respectively, and approximately 1.6 million and 1.4 million for the three and nine months ended September 30, 2016, respectively.