Earnings Per Common Share and Share Awards

Basic (loss) earnings per common share is computed by dividing net (loss) income by the weighted average number of common shares outstanding during the reporting period. Diluted (loss) earnings per common share is computed by dividing net (loss) income by the combination of dilutive potential common stock, comprised of shares issuable under the Company’s share-based compensation plans, and the weighted average number of common shares outstanding during the reporting period. Dilutive common share equivalents include the dilutive effect of in-the-money share-based awards, which are calculated based on the average share price for each period using the treasury stock method. Under the treasury stock method, as share-based awards are exercised, (a) the exercise price of a share-based award and (b) the amount of compensation cost, if any, for future services that the Company has not yet recognized, are assumed to be used to repurchase shares in the current period.

The following table sets forth the computation of basic and diluted (loss) earnings per share for the three-month periods ended March 31:



	Three Months Ended March 31,
(in thousands, except per share amounts)	2020			2019
Net (loss) income	$	(7,011	)	$	6,626
Weighted average common shares outstanding – Basic	1,890			1,887
Incremental shares outstanding assuming the exercise of dilutive SARs (share-settled)	—			9
Weighted average common shares outstanding – Diluted	1,890			1,896
Basic (loss) earnings per common share	$	(3.71	)	$	3.51
Diluted (loss) earnings per common share	$	(3.71	)	$	3.49

There were 15 thousand and 9 thousand potential shares excluded from the computation of diluted (loss) earnings per share for the three-month periods ended March 31, 2020 and 2019, respectively, due to the out-of-the-money status of the related share-based awards. Diluted loss per share is comparable to basic loss per share when an organization is in a net loss situation, like the Company was for the three-month period ended March 31, 2020, as the impact to loss per share from share awards is antidilutive.

The Company historically has adopted employee stock award plans under which restricted stock, options or stock appreciation rights ("SARs") exercisable for the Company's stock may be granted to key employees or directors of the Company. There is currently one active plan from which the Company may grant share-based awards. The awards eligible to be granted under the active plan are limited to SARs, and the maximum aggregate number of shares of common stock of the Company available pursuant to the plan for the grant of SARs is 250 thousand shares.

As of March 31, 2020, the only outstanding awards under the plans were SARs, which expire within seven years or less from the date of grant. Most outstanding SARs vest and are exercisable within one year of the date of grant, with the exception of a one-time grant where the SARs vest over a five-year period. All SARs issued to date have been share-settled only. There have been no stock options or SARs granted where the exercise price was less than the market price on the date of grant.

There was approximately $118 thousand and $88 thousand of compensation expense relating to SARs vesting on or before March 31, 2020 and 2019, respectively, included in personnel expenses in the Consolidated Statements of Operations. As of March 31, 2020, there was $171 thousand of unrecognized compensation expense related to unvested share-based compensation arrangements granted under the Company’s stock award plans.

A summary of share-based award transactions for all share-based award plans follows:



(in thousands, except weighted average exercise price and average remaining contractual term)	Number Of Shares		Weighted Average Exercise Price		Average Remaining Contractual Term (Years)	Aggregate Intrinsic Value
Outstanding as of January 1, 2019	28		$	110.27	3.64	$	2,019
SARs granted	4		162.81
SARs exercised	(2	)	50.50
Outstanding as of December 31, 2019	30		$	124.13	3.53	$	1,352
SARs granted	7		143.53
SARs exercised	(5	)	74.87
Outstanding as of March 31, 2020	32		$	135.47	4.33	$	585

Exercisable as of March 31, 2020	27		$	135.02	3.83	$	585

Unvested as of March 31, 2020	5		$	137.90	6.96	$	—

During the first quarter of 2020 the Company issued 7 thousand share-settled SARs to directors and employees of the Company. There were no such issuances in the first quarter of 2019, as all 2019 issuances of share-settled SARs were made in the second quarter. SARs give the holder the right to receive stock equal to the appreciation in the value of shares of stock from the grant date for a specified period of time, and as a result, are accounted for as equity instruments. The fair value of each award is estimated on the date of grant using the Black-Scholes option valuation model with the weighted average assumptions noted in the table shown below. Expected volatilities are based on both the implied and historical volatility of the Company’s stock. The Company uses historical data to project SAR exercises and pre-exercise forfeitures within the valuation model. The expected term of awards represents the period of time that SARs granted are expected to be outstanding. The interest rate assumed for the expected life of the award is based on the U.S. Treasury yield curve in effect at the time of the grant. The weighted average fair value for the SARs issued during first quarter 2020 was $35.49 and was estimated using the weighted average assumptions shown in the table below.



	2020
Expected Life in Years	6.2 - 7.0
Volatility	27.2%
Interest Rate	0.8%
Yield Rate	1.0%