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. Restricted Stock Awards (“RSAs”) 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 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 under the treasury stock method. The treasury stock method 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 nine months ended September 30, 2019 and 2018 (in thousands, except for earnings per share):


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2019		2018		2019		2018
Weighted-average shares:
Common shares outstanding		35,939		35,569		35,829		35,525
RSAs		98		141		101		144
Total weighted-average shares		36,037		35,710		35,930		35,669
Earnings per common share—Basic
Net income	$	23,977	$	19,305	$	70,630	$	50,424
Less: Undistributed earnings allocated to RSAs		65		76		199		204
Net income available to common shareholders—Basic	$	23,912	$	19,229	$	70,431	$	50,220

Net income per common share—Basic	$	0.67	$	0.54	$	1.97	$	1.41

Basic weighted-average common shares outstanding		35,939		35,569		35,829		35,525
Effect of diluted shares		1,896		1,556		1,678		1,270
Diluted weighted-average shares outstanding		37,835		37,125		37,507		36,795

Net income per common share—Diluted	$	0.63	$	0.52	$	1.88	$	1.36

During the three and nine months ended September 30, 2019, the Company had 245,000 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 nine months ended September 30, 2018, the Company had 13,420 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.