12.

Computation of Earnings per Share

Basic and diluted earnings per share are calculated as follows (in thousands, except per share amounts):

	Three Months Ended
	June 30,
	2017		2016
	(unaudited)
Net income	$	5,494	$	3,019
Weighted average shares - basic		32,086		31,401
Weighted average shares - diluted		33,044		32,001
Net income per share - basic	$	0.17	$	0.10
Net income per share - diluted	$	0.17	$	0.09

Diluted weighted average shares included approximately

958,000

and

600,000

common equivalent shares from stock options for the

three

months ended

June 30, 2017

and

2016.

Basic net income available per common share is computed using net income and the weighted average number of common shares outstanding

during the period. Diluted net income per common share is computed using net income and the weighted average number of common shares outstanding, assuming dilution, which includes potentially dilutive common shares outstanding during the period. Potentially dilutive common shares include the assumed exercise of stock options using the treasury stock method. During the

three

months ended

June 30, 2017

and

2016,

there were outstanding options to purchase

579,033

and

2,889,670

shares, respectively, that were

not

included in the computation of diluted net income per share since the exercise prices of the options exceeded the market price of the common stock and thus their inclusion would be anti-dilutive. These options could dilute earnings per share in future periods if the market price of the common stock increases.