Net Income Per Common Share

3 Months Ended

Mar. 31, 2021

NET INCOME PER COMMON SHARE

Net income per common share is computed based on the weighted average number of common shares outstanding during the period. Diluted net income per common share is computed similarly but includes the effect of the assumed exercise of dilutive stock options and restricted stock under the treasury stock method.

The Company's restricted shares are entitled to receive dividends and voting rights applicable to the Company's common stock, irrespective of any vesting requirement. Accordingly, the restricted shares are considered a participating security and the Company is required to apply the two-class method to consider the impact of the restricted shares on the calculation of basic and diluted earnings per share.

The computation of basic and diluted net income per common share (in thousands, except for per share data) is as follows:


	Three months ended March 31,
	2021		2020
Net income	$	3,456	$	7,961
Less: net income allocated to participating securities	204		321
Net income available to common shareholders	$	3,252	$	7,640

Weighted average common shares outstanding — basic	7,985,000		7,882,000
Effect of dilutive securities	7,000		—
Weighted average common and potentially issuable common shares outstanding — diluted	7,992,000		7,882,000

Basic net income per common share	$	0.41	$	0.97
Diluted net income per common share	$	0.41	$	0.97

The computation of basic and diluted net income per participating shares is as follows (in thousands, except for per share data):


	Three months ended March 31,
	2021		2020
Net income allocated to participating securities	$	204	$	321

Weighted average participating shares outstanding — basic	500,000		338,000
Effect of dilutive securities	—		—
Weighted average common and potentially issuable common shares outstanding — diluted	500,000		338,000

Basic net income per participating share	$	0.41	$	0.97
Diluted net income per participating share	$	0.41	$	0.97