Earnings Per Share

9 Months Ended

Sep. 30, 2016

12. Earnings Per Share

We use the two-class method of calculating earnings per share (which we refer to as “EPS”) as our non-vested restricted stock awards have non-forfeitable rights to dividends and, accordingly, represent a participating security. The two-class method is an earnings allocation method under which EPS is calculated for each class of common stock and participating security considering both dividends declared (or accumulated) and participation rights in undistributed earnings as if all such earnings had been distributed during the period. We use the treasury stock method to calculate the dilutive effect of our restricted stock units as the restricted stock units do not have participating rights.

The following table sets forth the computation of basic and diluted EPS for the three and nine months ended September 30, 2016 and 2015 (in thousands, except share and per share information):


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2016		2015		2016		2015
Numerator
Net income	$	13,342	$	10,583	$	34,467	$	26,732
Less: Undistributed earnings allocated to participating securities		(241)		(358)		(785)		(890)
Net income allocable to common stockholders	$	13,101	$	10,225	$	33,682	$	25,842
Denominator
Weighted average common shares outstanding - basic		20,673,521		20,601,218		20,643,682		20,556,146
Dilutive effect of restricted stock units		148,545		—		88,248		—
Weighted average common shares outstanding - diluted		20,822,066		20,601,218		20,731,930		20,556,146
Earnings per share:
Basic	$	0.63	$	0.50	$	1.63	$	1.26
Diluted	$	0.63	$	0.50	$	1.62	$	1.26