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 September 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 number of shares of common stock underlying the RSUs awarded under the 2016 Incentive Plan that are included in the calculation of diluted weighted average number of shares of common stock:

Three and Nine

Months Ended

September 30, 2018

September 30, 2017

Date of Award and

Return on

Stockholder

Return on

Stockholder

Total Number of

Capital

Return

Capital

Return

Underlying Shares

metric

Total

metric

Total

September 26, 2017

76,250 shares

(a)

33,524

38,125

71,649

38,125

—

38,125

July 1, 2018

76,250 shares

(b)

30,929

—

30,929

n/a

64,453

38,125

102,578

38,125

—

38,125

(a)

Includes shares that would be issued pursuant to the respective metrics, assuming the end of the quarterly period was the June 30, 2020 vesting date. None of the remaining 4,601 shares and 38,125 shares are included at September 30, 2018 and 2017, respectively, as the applicable metrics had not been met for these shares.

(b)

Includes shares that would be issued pursuant to the respective metrics, assuming the end of the quarterly period was the June 30, 2021 vesting date. None of the remaining 45,321 shares are included at September 30, 2018, as the applicable metrics had not been met for these shares.

In 2010, RSUs exchangeable for up to 200,000 shares of common stock were awarded pursuant to the 2009 Incentive Plan. In June 2017, 113,584 of these shares vested and such shares were issued in August 2017.

See Note 14 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				Nine Months Ended
	September 30,				September 30,
	2018		2017		2018		2017

Numerator for basic and diluted earnings per share:
Net income	$	10,182	$	7,128	$	21,381	$	20,007
Less net income attributable to non-controlling interests		(35)		(23)		(866)		(65)
Less earnings allocated to unvested restricted stock (a)		(342)		(263)		(879)		(796)
Net income available for common stockholders: basic and diluted	$	9,805	$	6,842	$	19,636	$	19,146

Denominator for basic earnings per share:
Weighted average number of common shares		18,646		18,000		18,521		17,859
Effect of dilutive securities:
RSUs		59		79		41		102
Denominator for diluted earnings per share:
Weighted average number of shares		18,705		18,079		18,562		17,961

Earnings per common share, basic	$	.53	$	.38	$	1.06	$	1.07
Earnings per common share, diluted	$	.52	$	.38	$	1.06	$	1.07

(a)

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