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 granted prior to 2014 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.

The restricted shares granted in 2014 contain a provision making the payment of dividends contingent upon vesting of the shares. These shares are not participating shares because any accumulated unvested dividends are forfeited, along with the shares, if the awards fail to vest. These non-participating shares are excluded from the computation of net income allocated to participating securities in the table below, but are included in the computation of weighted average dilutive securities, unless their inclusion would be anti-dilutive.

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)	2014		2013		2014		2013
Numerator:
Net income	$	8,404	$	8,315	$	22,417	$	24,737
Less: Net income allocated to participating securities		(58)		(83)		(176)		(237)
Net income available to common shareholders	$	8,346	$	8,232	$	22,241	$	24,500

Denominator:
Weighted average common shares outstanding		20,988		20,860		21,040		20,769
Weighted average dilutive securities		533		592		496		629
Weighted average common shares outstanding, diluted		21,521		21,452		21,536		21,398

Income per common share, basic	$	0.40	$	0.39	$	1.06	$	1.18
Income per common share, diluted	$	0.39	$	0.38	$	1.03	$	1.14

For the three and nine month periods ended September 30, 2014 and 2013, certain common stock equivalents were excluded from the calculation of dilutive securities because their inclusion would either have been anti-dilutive or, for stock options, the exercise prices of those stock options were greater than the average market price of the Company’s common stock for the period. All of the Company’s non-participating unvested restricted shares were included in the computation of weighted average dilutive securities. The following table summarizes the shares of common stock underlying the Company’s unvested stock options and performance awards that were excluded from the calculation of dilutive securities:

	Three months ended				Nine months ended
	September 30,				September 30,
(In thousands)	2014		2013		2014		2013

Stock options		103		221		104		221
Performance awards		—		—		84		—

Share Repurchase Program

During the nine months ended September 30, 2014, the Company repurchased 438,577 shares of common stock (at a weighted-average price of $23.96 per share) under its $25.0 million stock repurchase program (the “Repurchase Program”), which expires August 31, 2015. The total cost of $10.5 million , $9.8 million of which had settled as of September 30, 2014, was recorded as a reduction of common stock and additional paid-in capital as of September 30, 2014, leaving $14.5 million available for further share repurchases. All shares repurchased under the Repurchase Program will be retired and returned to authorized but unissued stock.