Net Income Per Share

6 Months Ended

Jun. 30, 2022

(2) Net Income Per Share

Basic and diluted earnings or loss per share (“EPS”) are computed using the two-class method, which is an earnings allocation that determines EPS for each class of common stock and participating securities according to dividends declared and participation rights in undistributed earnings. The Company’s Restricted Stock Awards (“RSA”) are considered participating securities because they are legally issued at the date of grant and holders are entitled to receive non-forfeitable dividends during the vesting term.

The computation of diluted EPS includes additional common shares, such as unvested Restricted Stock Units (“RSU”) and stock options with exercise prices less than the average market price of the Company’s common stock during the period (“in-the-money options”), which would be considered outstanding. This assumes that additional shares would have to be issued in cases where the exercise price of stock options is less than the value of the common stock being acquired because the cash proceeds received from the stock option holder would not be sufficient to acquire that same number of shares. The Company does not compute diluted EPS in cases where the inclusion of such additional shares would be anti-dilutive in effect.

The following table sets forth the computation of basic and diluted earnings per share for the three and six months ended June 30, 2022 and 2021 (in thousands, except for earnings per share):


	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2022			2021			2022			2021
Weighted-average shares:
Common shares outstanding		32,493			35,894			33,696			35,825
RSAs		21			114			21			115
Total weighted-average shares		32,514			36,008			33,717			35,940
Earnings per common share—Basic
Net income	$	49,360		$	39,934		$	110,671		$	83,240
Less: Undistributed earnings allocated to RSAs		(31	)		(127	)		(68	)		(267	)
Net income available to common shareholders—Basic	$	49,329		$	39,807		$	110,603		$	82,973

Net income per common share—Basic	$	1.52		$	1.11		$	3.28		$	2.32

Basic weighted-average common shares outstanding		32,493			35,894			33,696			35,825
Effect of diluted shares		1,202			1,820			1,338			1,912
Diluted weighted-average shares outstanding		33,695			37,714			35,034			37,737

Net income per common share—Diluted	$	1.46		$	1.06		$	3.16		$	2.20

During the three and six months ended June 30, 2022, the Company had (in thousands) 274.4 stock options, respectively, that were excluded due to the exercise price exceeding the average fair value of the Company’s common stock during the period. During the three and six months ended June 30, 2021, the Company had (in thousands) 0 and 273.6 stock options, respectively, that were excluded due to the exercise price exceeding the average fair value of the Company's common stock during the period.