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 unvested restricted stock is entitled to receive dividends and is therefore considered a participating security. As of June 30, 2018, 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.

The following table identifies the impact to the diluted weighted average number of shares of common stock related to the RSUs under the plans identified in the table below:

	Number of underlying		Three Months Ended June 30,				Six Months Ended June 30,
	shares		2018		2017		2018		2017
2009 Incentive Plan	200,000		—		113,584	(a)	—		113,584	(a)
2016 Incentive Plan	76,250	(b)	74,245	(c)	—		74,245	(c)	—

(a)

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

(b)

Awarded on September 26, 2017.

(c)

Includes 36,120 shares that would be issued pursuant to a return on capital performance metric and 38,125 shares that would be issued pursuant to a stockholder return metric, assuming the end of the quarterly period was the June 30, 2020 vesting date. Excludes 2,005 shares subject to the capital performance metric as such metric was not met. See Note 13 for information regarding the Company’s equity incentive plans.

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 June 30,						Six Months Ended June 30,
	2018			2017			2018			2017
Numerator for basic and diluted earnings per share:
Net income	$	4,546		$	9,993		$	11,199		$	12,879
Less net income attributable to non-controlling interests	(29		)	(21		)	(831		)	(42		)
Less earnings allocated to unvested restricted stock (a)	(293		)	(332		)	(586		)	(533		)

Net income available for common stockholders: basic and diluted	$	4,224		$	9,640		$	9,782		$	12,304


Denominator for basic earnings per share:
Weighted average number of common shares	18,519			17,824			18,458			17,788
Effect of dilutive securities:
RSUs	74			114			74			114

Denominator for diluted earnings per share:
Weighted average number of shares	18,593			17,938			18,532			17,902


Earnings per common share, basic	$	.23		$	.54		$	.53		$	.69

Earnings per common share, diluted	$	.23		$	.54		$	.53		$	.69


Net income attributable to One Liberty Properties, Inc. common stockholders, net of non-controlling interests	$	4,517		$	9,972		$	10,368		$	12,837

(a)

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