The computation of earnings per share is as follows:



	Three Months Ended							Nine Months Ended
	September 30,							September 30,
(Amounts in thousands, except per share data)	2017				2016			2017				2016
Net income/(loss) applicable to Piper Jaffray Companies	$	(49,713	)		$	10,658		$	(15,865	)		$	15,033
Earnings allocated to participating securities (1)	(702		)		(2,076		)	(2,241		)		(2,557		)
Net income/(loss) applicable to Piper Jaffray Companies’ common shareholders (2)	$	(50,415	)		$	8,582		$	(18,106	)		$	12,476

Shares for basic and diluted calculations:
Average shares used in basic computation	12,898				12,282			12,774				12,787
Stock options	—				16			—				14
Restricted stock units	77				—			171				—
Average shares used in diluted computation	12,975			(3)	12,298			12,945			(3)	12,801

Earnings/(loss) per common share:
Basic	$	(3.91	)		$	0.70		$	(1.42	)		$	0.98
Diluted	$	(3.91	)	(3)	$	0.70		$	(1.42	)	(3)	$	0.97

(1)

Represents the allocation of distributed and undistributed earnings to participating securities. No allocation of undistributed earnings is made for periods in which a loss is incurred. Distributed earnings (e.g., dividends) are allocated to participating securities. Participating securities include all of the Company’s unvested restricted shares. The weighted average participating shares outstanding were 2,246,663 and 2,974,676 for the three months ended September 30, 2017 and 2016, respectively, and 2,389,755 and 2,623,095 for the nine months ended September 30, 2017 and 2016, respectively.

(2)

Net income/(loss) applicable to Piper Jaffray Companies’ common shareholders for diluted and basic EPS may differ under the two-class method as a result of adding the effect of the assumed exercise of stock options and restricted stock units to dilutive shares outstanding, which alters the ratio used to allocate earnings to Piper Jaffray Companies’ common shareholders and participating securities for purposes of calculating diluted and basic EPS.


(3)	Earnings per diluted common share is calculated using the basic weighted average number of common shares outstanding for periods in which a loss is incurred. Common shares of 2,235,060 were excluded from diluted EPS at September 30, 2017, as the Company had a net loss for these periods.