Earnings Per Share

The Company calculates basic net income per common share based on the Company’s common stock outstanding as well as its unvested restricted share units. The unvested restricted share units are included in the basic earnings per share calculation using the two class method because they are eligible to receive dividends. Under the two class method income is allocated to the class of securities prior to the calculation of earnings per share. A diluted net income for the period takes into account the effect of dilutive instruments, such as any options on common shares, but uses the average share price for the period in determining the number of incremental shares that are to be added to the weighted average number of common shares outstanding. Diluted net income also includes the minimal dilutive impact of the 3,609,420 Operating Company warrants held by TFP as part of the Contribution Transactions as summarized in Note 13. Earnings per share data excludes Tiptree’s Class B common stock, as the Class B common stock evidences a voting right without any economic interest.

The following table presents a reconciliation of basic and diluted net income per common share for the three and six month periods ended June 30, 2014 and 2013:



	Three months ended June 30,				Six months ended June 30,
	2014		2013		2014		2013
Basic:
Net income	$	1,071	$	3,415	$	2,096	$	4,733

Weighted average number of Class A common shares outstanding (basic)	10,617,863		10,243,951		10,602,311		10,242,733
Basic earnings per share	$	0.10	$	0.33	$	0.20	$	0.46
Diluted:
Net income	$	1,070	$	3,399	$	2,084	$	4,704

Weighted average number Class A common shares outstanding (diluted)	10,617,863		10,243,951		10,602,311		10,242,733
Diluted earnings per share	$	0.10	$	0.33	$	0.20	$	0.46

The above table excludes the effect of the 2008 warrant convertible into 652,500 shares because the exercise price of $11.33 was greater than the average market price during such periods.