(17) Earnings Per Share

Basic earnings per common share is computed under the two-class method in accordance with FASB ASC Topic 260. Under the two-class method, a portion of net income is allocated to participating securities, such as the Company’s preferred stock, and therefore is excluded from the calculation of basic earnings per share allocated to common shares. Diluted earnings per common share is computed by dividing the net income applicable to preferred and common shareholders for the period by the weighted average number of common and potential common shares outstanding during the period. Net income, in both the basic and diluted earnings per common share calculations, is reduced by the Company’s preferred stock dividends and accretion of the Company’s preferred stock to its redemption value.

The following table sets forth the computation of basic earnings per common share (amounts in thousands, except share and per share data):

Diluted earnings (loss) per share for fiscal years 2014, 2013 and 2012 excludes 153,613 stock options and restricted shares at a weighted-average price of $18.70, 202,824 stock options and restricted shares at a weighted-average price of $18.67 and 824,850 stock options and restricted shares at a weighted-average price of $11.37, respectively, which were outstanding during the periods but were anti-dilutive. Diluted earnings per share for fiscal year 2012 also excludes the 8,620,690 shares of common stock issuable upon the conversion of 25,000 shares of preferred stock, which were outstanding until their repurchase and retirement on March 8, 2012, but were anti-dilutive.

The following table sets forth the computation of diluted earnings per share (amounts in thousands, except share and per share data):