EPS

The following is an analysis of basic and diluted EPS, reflecting the application of the two-class method, as described below:



	Three Months Ended September 30,						Nine Months Ended September 30,
(In thousands, except number of shares and per share data)	2019			2018			2019			2018
Net income	$	14,488		$	14,057		$	41,965		$	39,094
Dividends and undistributed earnings allocated to participating securities⁽¹⁾	(33		)	(39		)	(86		)	(110		)
Net income available to common shareholders	$	14,455		$	14,018		$	41,879		$	38,984
Weighted-average common shares outstanding for basic EPS	15,339,093			15,580,782			15,482,765			15,565,355
Dilutive effect of stock-based awards⁽²⁾	42,835			58,204			39,736			56,045
Weighted-average common and potential common shares for diluted EPS	15,381,928			15,638,986			15,522,501			15,621,400
Earnings per common share:
Basic EPS	$	0.94		$	0.90		$	2.70		$	2.50
Diluted EPS	$	0.94		$	0.90		$	2.70		$	2.50


(1)	Represents dividends paid and undistributed earnings allocated to nonvested stock-based awards that contain non-forfeitable rights to dividends.


(2)	Represents the effect of the assumed exercise of stock options and vesting of restricted shares and restricted stock units utilizing the treasury stock method. Not included are the unvested LTIP awards, which are the Company's performance-based awards.

For the three and nine months ended September 30, 2019 and 2018, there were no anti-dilutive stock based awards that have been excluded from the computation of potential common shares for purposes of calculating diluted EPS, because the average market price of the Company's common stock is greater than the exercise prices.

Nonvested stock-based payment awards that contain non-forfeitable rights to dividends are participating securities and are included in the computation of EPS pursuant to the two-class method. The two-class method is an earnings allocation formula that determines EPS for each class of common stock and participating security according to dividends declared (or accumulated) and participation rights in undistributed earnings. Certain of the Company’s nonvested stock-based awards qualify as participating securities.

Net income is allocated between the common stock and participating securities pursuant to the two-class method. Basic EPS is computed by dividing net income available to common shareholders by the weighted average number of common shares outstanding during the period, excluding participating nonvested stock-based awards. Diluted EPS is computed in a similar manner, except that the denominator includes the number of additional common shares that would have been outstanding if potentially dilutive common shares were issued using the treasury stock method.