NET INCOME PER SHARE

12 Months Ended

Dec. 31, 2021

3.	NET INCOME PER SHARE

The Company presents basic and diluted income per common share using the two-class method which requires all outstanding Series A Preferred Stock and unvested restricted stock that contain rights to non-forfeitable dividends and therefore participate in undistributed income with common shareholders to be included in computing income per common share. Under the two-class method, net income is reduced by the amount of dividends declared in the period for each class of common stock and participating security. The remaining undistributed income is then allocated to common stock and participating securities, based on their respective rights to receive dividends. Series A Preferred Stock and unvested restricted stock contain non-forfeitable rights to dividends on an if-converted basis and on the same basis as common shares, respectively, and are considered participating securities. The Series A Preferred Stock and unvested restricted stock are not included in the computation of basic income per common share in periods in which we have a net loss, as the Series A Preferred Stock and unvested restricted stock are not contractually obligated to share in our net losses. However, the cumulative dividends on preferred stock for the period decreases the income or increases the net loss allocated to common shareholders unless the dividend is paid in the period. Basic income per common share has been computed by dividing net income allocated to common shareholders by the weighted-average number of common shares outstanding. The basic and diluted net income amounts are the same for the years ended December 31, 2021 and 2020 as a result of the anti-dilutive impact of the potentially dilutive securities.

The following is a reconciliation of the numerator and denominator of the diluted net income per share computations for the periods presented below:

	Year Ended December 31,
(in thousands, except share data)	2021			2020
Numerator:
Net income	$	34,718		$	48,565
Less: preferred stock dividend		(1,219	)		(1,378	)
Less: allocation to preferred stockholders		(5,601	)		(8,224	)
Less: allocation to restricted stockholders		(1,796	)		(2,150	)
Net income allocated to common stockholders	$	26,102		$	36,813

Basic net income per share:
Denominator:
Weighted average common shares outstanding		25,080,789			24,748,496
Basic net income per share	$	1.04		$	1.49

Diluted net income per share:
Denominator:
Weighted average number of:
Common shares outstanding		25,080,789			24,748,496
Dilutive potential common shares outstanding:
Series A Preferred Stocck		-			-
Unvested restricted stock		-			-
Stock options		-			-
Dilutive shares outstanding		25,080,789			24,748,496
Diluted net income per share	$	1.04		$	1.49

The following table summarizes the potential weighted average shares of common stock that were excluded from the determination of our diluted shares outstanding as they were anti-dilutive:

	Year Ended December 31,
	2021		2020
Series A preferred stock		5,381,356		5,381,356
Unvested restricted stock		825,569		632,693
		6,206,925		6,014,049