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Note J - Earnings Per Share

9 Months Ended

Sep. 30, 2022

Notes to Financial Statements

Earnings Per Share [Text Block]

Note J - Earnings Per Share

In periods in which the Company has net income, the Company is required to calculate earnings per share (“EPS”) using the two-class method. The two-class method is required because the Company’s Series A Preferred Stock is considered a participating security with objectively determinable and non-discretionary dividend participation rights. Series A Preferred stockholders have the right to participate in dividends above their five percent dividend rate should the Company declare dividends on its common stock at a dividend rate higher than the five percent (on an as-converted basis). Under the two-class method, undistributed and distributed earnings are allocated on a pro-rata basis to the common and the preferred stockholders. The weighted-average number of common and preferred stock outstanding during the period is then used to calculate EPS for each class of shares.

In periods in which the Company has a net loss, basic loss per share is calculated using the treasury stock method. The treasury stock method is calculated by dividing the net loss by the weighted-average number of common shares outstanding during the period. The two-class method is not used, because the calculation would be anti-dilutive.

Reconciliations of basic and diluted EPS were as follows:

		*Three Months Ended September 30,*
In thousands, except per share amounts		*2022*				*2021*
Numerator:
Net income		$	7,166			$	4,404
Less: Preferred stock dividends			125				125
Less: Earnings attributable to participating securities			868				543
Numerator for basic EPS: income attributable to common stockholders			6,173			$	3,736

Effect of dilutive securities:
Add back: Allocation of earnings to participating securities			868				543
Less: Re-allocation of earnings to participating securities considering potentially dilutive securities			(827	)			(525	)
Numerator for diluted EPS			6,214				3,754

Denominator:
Basic EPS denominator: weighted-average common shares outstanding			7,125				6,889
Diluted EPS denominator			7,524				7,162

Basic income per Common Share		$	0.87			$	0.54
Diluted income per Common Share		$	0.83			$	0.52

For the three months ended September 30, 2022 and 2021, respectively, the following shares have been excluded from the calculation of shares used in the diluted EPS calculation: 12,694 and 42,931 shares of anti-dilutive market price options; and 1,001,614 and 1,001,614 shares of anti-dilutive Series A Preferred Stock (as if converted).

		*Nine Months Ended September 30,*
In thousands, except per share amounts		*2022*				*2021*
Numerator:
Net Income		$	14,972			$	13,215
Less: Preferred stock dividend			371				372
Less: Earnings attributable to common stockholders			1,817				1,661
Numerator for basic EPS: income attributable to common stockholders			12,784				11,182

Effect of dilutive securities:
Add back: Allocation of earnings to participating securities			1,817				1,661
Less: Re-allocation of earnings to participating securities considering potentially dilutive securities			(1,737	)			(1,578	)
Numerator for diluted EPS		$	12,864			$	11,265

Denominator:
Basic EPS denominator: weighted-average common shares outstanding			7,045				6,743
Diluted EPS denominator			7,418				7,153

Basic income per Common Share		$	1.81			$	1.66
Diluted income per Common Share		$	1.73			$	1.57

For the nine months ended September 30, 2022 and 2021, respectively, the following shares have been excluded from the calculation of shares used in the diluted EPS calculation: 13,602 and 49,236 shares of anti-dilutive market price options; 16,849 and 62,541 of anti-dilutive unvested restricted shares; and 1,001,614 and 1,001,614 shares of anti-dilutive Series A Preferred Stock (as if converted).