Earnings Per Share

12 Months Ended

Dec. 31, 2020

EARNINGS PER SHARE

Share-based awards that contain non-forfeitable rights to dividends or dividend equivalents, whether paid or unpaid, are participating securities and included in the computation of both basic and diluted earnings per share. Our grants of stock awards to our employees are considered participating securities and we have prepared our earnings per share calculations to exclude earnings allocated to unvested restricted stock awards, using the two-class method, in the basic and diluted weighted average shares outstanding calculation.

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


	Years Ended December 31,
	2018		2019		2020
Numerator for basic and diluted earnings per share:
Net income	$	11,645	$	14,533	$	16,090
Less: Earnings allocated to unvested restricted stock	(57)		(62)		(46)
Income attributable to common stockholders	$	11,588	$	14,471	$	16,044

Denominator:
Denominator for basic earnings per common share - weighted average shares outstanding	17,971		17,877		17,872
Effect of dilutive securities:
Stock options	66		118		196
Convertible Notes	337		10		9
Denominator for diluted earnings per common share - weighted average shares outstanding	18,374		18,005		18,077

Basic earnings per common share	$	0.64	$	0.81	$	0.90
Diluted earnings per common share	$	0.63	$	0.80	$	0.89

The fully diluted weighted average shares outstanding for the years ended December 31, 2018, 2019 and 2020, and the corresponding calculation of fully diluted earnings per share, included approximately 337,000, 10,000 and 9,000 shares that would have been issued upon the conversion of our convertible subordinated notes as a result of the application of the if-converted method prescribed by the FASB ASC 260.

During the year ended December 31, 2020, no stock options were excluded from the computation of diluted earnings per share. For the years ended December 31, 2018 and 2019, there were 1,660,919 and 338,440 stock options excluded from the computation of diluted earnings per share because the inclusion of such stock options would result in an antidilutive effect.