Note 3 — Earnings Per Common Share

Basic earnings per share was determined by dividing net income allocable to common stockholders for each period by the weighted average number of shares of common stock outstanding during the applicable period. Net income is also allocated to the unvested restricted stock outstanding during each period, as the restricted stock is entitled to receive dividends and is therefore considered a participating security. Unvested restricted stock is not allocated net losses; such losses are allocated entirely to the common stockholders, other than the holders of unvested restricted stock. As of September 30, 2017, the shares of common stock underlying the restricted stock units awarded under the 2016 Incentive Plan are excluded from the basic earnings per share calculation, as these units are not participating securities. The restricted stock units issued pursuant to the 2009 and 2016 Incentive Plans are referred to as “RSUs”.

Diluted earnings per share reflects the potential dilution that could occur if securities or other rights exercisable for, or convertible into, common stock were exercised or converted or otherwise resulted in the issuance of common stock that shared in the earnings of the Company.

See Note 13 for information regarding the Company’s equity incentive plans.

The diluted weighted average number of shares of common stock includes common stock underlying the RSUs awarded under the plans identified in the table below:

	Number of	Three Months Ended September 30,			Nine Months Ended September 30,
	underlying shares	2017		2016	2017		2016
2009 Incentive Plan	200,000		(a)	117,000		(a)	117,000
2016 Incentive Plan	76,250	38,125	(b)	—	38,125	(b)	—

(a)

RSUs with respect to 113,584 shares vested on June 30, 2017 and such shares were issued in August 2017.

(b)

Includes 38,125 shares that would be issued pursuant to a return on capital performance metric, assuming the end of the quarterly period was the June 30, 2020 vesting date. None of the remaining 38,125 shares (of a total of 76,250 that were awarded on September 26, 2017) are included as the applicable total stockholder return metric has not been met for these shares.

The following table provides a reconciliation of the numerator and denominator of earnings per share calculations (amounts in thousands, except per share amounts):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2017			2016			2017			2016
Numerator for basic and diluted earnings per share:
Net income	$	7,128		$	4,323		$	20,007		$	20,067
Less net income attributable to non-controlling interests	(23		)	(24		)	(65		)	(40		)
Less earnings allocated to unvested restricted stock (a)	(263		)	(248		)	(796		)	(744		)

Net income available for common stockholders, basic and diluted	$	6,842		$	4,051		$	19,146		$	19,283


Denominator for basic earnings per share: Weighted average common shares	18,000			16,845			17,859			16,605
Effect of diluted securities:
RSUs	79			117			102			117

Denominator for diluted earnings per share: Weighted average shares	18,079			16,962			17,961			16,722


Earnings per common share, basic	$	.38		$	.24		$	1.07		$	1.16

Earnings per common share, diluted	$	.38		$	.24		$	1.07		$	1.15


Net income attributable to One Liberty Properties, Inc. common stockholders, net of non-controlling interests	$	7,105		$	4,299		$	19,942		$	20,027

(a)

Represents an allocation of distributed earnings to unvested restricted stock which, as participating securities, are entitled to receive dividends.