Note 4 – 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. As of June 30, 2019, the shares of common stock underlying the restricted stock units (the “RSUs”) awarded under the 2016 Incentive Plan are excluded from the basic earnings per share calculation, as these units are not participating securities.

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 that are included in determining the diluted weighted average number of shares of common stock:

Three and Six Months Ended

June 30, 2019 (b)

June 30, 2018 (c)

Date of Award and

Return on

Stockholder

Return on

Stockholder

Total Number of

Capital

Return

Capital

Return

Underlying Shares (a)

metric

Total

metric

Total

September 26, 2017

76,250 shares

(d)

32,824

38,125

70,949

36,120

38,125

74,245

July 1, 2018

76,250 shares

(e)

29,771

38,125

67,896

n/a

62,595

76,250

138,845

36,120

38,125

74,245

(a)

The RSUs awarded in 2017 and 2018 vest, subject to satisfaction of the applicable market and/or performance conditions, on June 30, 2020 and 2021, respectively.

(b)

Reflects the number of shares underlying RSUs that would be issued assuming the measurement date used to determine whether the applicable conditions are satisfied is June 30, 2019.

(c)

Reflects the number of shares underlying RSUs that would be issued assuming the measurement date used to determine whether the applicable conditions are satisfied is June 30, 2018.

(d)

None of the remaining 5,301 shares and 2,005 shares are included at June 30, 2019 and 2018, respectively, as the applicable condition had not been met for these shares at the respective measurement dates.

(e)

None of the remaining 8,354 shares are included at June 30, 2019, as the applicable conditions had not been met for these shares at the measurement date.

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				Six Months Ended
	June 30,				June 30,
	2019		2018		2019		2018
Numerator for basic and diluted earnings per share:
Net income	$	4,558	$	4,546	$	8,569	$	11,199
Less net income attributable to non-controlling interests		(446)		(29)		(486)		(831)
Less earnings allocated to unvested restricted stock (a)		(310)		(293)		(620)		(586)
Net income available for common stockholders: basic and diluted	$	3,802	$	4,224	$	7,463	$	9,782

Denominator for basic earnings per share:
Weighted average number of common shares		19,023		18,519		18,959		18,458
Effect of diluted securities:
RSUs		106		74		101		74
Denominator for diluted earnings per share:
Weighted average number of shares		19,129		18,593		19,060		18,532

Earnings per common share, basic	$	.20	$	.23	$	.39	$	.53
Earnings per common share, diluted	$	.20	$	.23	$	.39	$	.53

(a)

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