Note 3 – Earnings per common share

The following table presents the basic and diluted earnings per common share computation (in thousands, except share and per share data):


	Three Months Ended March 31,
	2020		2019
Numerator
Net income - basic and diluted	$	898	$	809

Denominator
Weighted average shares outstanding - basic		1,454		1,435
Dilutive effect of common stock options		—		—

Weighted average shares outstanding - diluted		1,454		1,435

Earnings per share - basic	$	0.62	$	0.56
Earnings per share - diluted	$	0.62	$	0.56

Applicable guidance requires that outstanding, unvested share-based payment awards that contain voting rights and rights to nonforfeitable dividends participate in undistributed earnings with common shareholders. Accordingly, the weighted average number of shares of the Company’s common stock used in the calculation of basic and diluted net income per common share includes unvested shares of the Company’s outstanding restricted common stock.

The vesting of 4,155 and 8,650 at March 31, 2020 and 2019, respectively, of the unvested restricted units included in Note 11 “Stock incentive plan” was dependent upon meeting certain performance criteria. As of March 31, 2020 and 2019, it was indeterminable whether these unvested restricted units would vest and as such the underlying shares were excluded from common shares issued and outstanding at such date and were not included in the computation of earnings per share for such period.

Outstanding options and warrants to purchase common stock were considered in the computation of diluted earnings per share for the periods presented. Stock options for 514 and 578 shares were not included in computing diluted earnings per share for the three months ended March 31, 2020 and 2019, respectively, because their effects were anti-dilutive. Additionally, the impact of the warrant to acquire shares of the Company’s common stock in connection with the Company’s participation in the Troubled Asset Relief Program is not included for the period ended March 31, 2019, as the warrant was anti-dilutive. The warrant expired on May 1, 2019 and as such was not included in the period ended March 31, 2020.