Earnings Per Share

9 Months Ended

Sep. 30, 2013

Earnings Per Share

Earnings Per Share

8. Earnings Per Share

The Company computes earnings per share using the two-class method, an earnings allocation formula that determines earnings per share for common stock and participating securities according to dividends declared and participation rights in undistributed earnings, when that method results in a more dilutive effect than the Treasury method. The Company’s unvested grants of restricted stock contain non-forfeitable rights to dividends, should any be declared, and are treated as participating securities and included in the computation of earnings per share.

Net income available to common shareholders and the weighted average number of common shares used to compute basic and diluted earnings per share was as follows:

	Three months ended				Nine months ended
	September 30,				September 30,
(In thousands, except per share data)	2013		2012		2013		2012
Numerator:
Net income	$	8,315	$	8,746	$	24,737	$	24,491
Less: Net income allocated to participating securities	83		78		237		195
Net income available to common shareholders	$	8,232	$	8,668	$	24,500	$	24,296
Denominator:
Weighted average common shares outstanding	20,860		20,410		20,769		20,349
Weighted average dilutive securities	592		776		629		785
Weighted average common shares outstanding, diluted	21,452		21,186		21,398		21,134
Income per common share, basic	$	0.39	$	0.42	$	1.18	$	1.19
Income per common share, diluted	$	0.38	$	0.41	$	1.14	$	1.15

For the three and nine months ended September 30, 2013, common equivalents related to approximately 221,000 outstanding stock options were excluded from the diluted earnings per share calculation because the inclusion of such shares would either be anti-dilutive or the exercise prices of those stock options were greater than the average market price of the Company’s common stock for the period. For the three and nine months ended September 30, 2012, common equivalents related to approximately 229,000 outstanding stock options were excluded from the diluted earnings per share calculation because the inclusion of such shares would either be anti-dilutive or the exercise prices of those stock options were greater than the average market price of the Company’s common stock for the period. Additionally, for the three and nine months ended September 30, 2012, common equivalents related to approximately 12,000 outstanding performance shares were excluded from the diluted earnings per share calculation because the underlying performance obligation was not met as of the end of the period.