14. 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 six months ended June 30, 2017 and 2016 (in thousands, except share and per share information):


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2017		2016		2017		2016
Numerator
Net income	$	14,831	$	13,142	$	23,630	$	21,125
Less: Undistributed earnings allocated to participating securities		(101)		(280)		(251)		(530)
Net income allocable to common stockholders	$	14,730	$	12,862	$	23,379	$	20,595
Denominator
Weighted average common shares outstanding - basic		22,146,124		20,649,910		21,814,860		20,628,598
Dilutive effect of restricted stock units		219,953		97,402		215,102		58,099
Weighted average common shares outstanding - diluted		22,366,077		20,747,312		22,029,962		20,686,697
Earnings per share:
Basic	$	0.67	$	0.62	$	1.07	$	1.00
Diluted	$	0.66	$	0.62	$	1.06	$	1.00

We have excluded from diluted earnings per share the common unit equivalents related to 113 restricted stock units for the six months ended June 30, 2017, because their effect would be anti-dilutive.