Equity

6 Months Ended

Jun. 30, 2024

Equity Distribution Agreements

The Company has equity distribution agreements with three sales agents to sell up to $40,000,000 of its common stock from time-to-time in an at-the-market offering. During the three and six months ended June 30, 2024 and 2023, the Company did not sell any shares.

Common Stock Dividend Distribution

The Company declared a quarterly cash distribution of $0.25 per share, payable on July 9, 2024 to stockholders of record on June 25, 2024.

Dividend Reinvestment Plan

The Dividend Reinvestment Plan (the “DRP”), among other things, provides stockholders with the opportunity to reinvest all or a portion of their cash dividends paid on the Company’s common stock in additional shares of its common stock, at a discount, determined in the Company’s sole discretion, of up to 5% from the market price for the common stock (as such price is calculated pursuant to the DRP). The discount from the market price is currently 3%. During the three and six months ended June 30, 2024, 57,901 and 108,852 shares were issued in lieu of cash dividends of $947,000 and $1,878,000 respectively. During the three and six months ended June 30, 2023, 35,634 and 75,852 shares were issued in lieu of cash dividends of $670,000 and $1,433,000, respectively.

Stock Based Compensation

In June 2024, the Company's stockholders approved the 2024 Incentive Plan (the "2024 Plan"). This plan permits the Company to grant: (i) stock options, restricted stock, restricted stock units, performance shares awards and any one or more of the foregoing, for up to a maximum of 1,000,000 shares; and (ii) cash settled dividend equivalent rights in tandem with the grant of restricted stock units and certain performance based awards. As of June 30, 2024, (i) 1,000,000 shares are available for issuance pursuant to awards under the 2024 Plan and (ii) awards to acquire 1,387,398 shares of common stock (i.e., 962,229 shares of restricted stock and awards (i.e., restricted stock units) to acquire 425,169 shares under our pay for performance plans), are outstanding under the 2022 Amended and Restated Incentive Plan (the "2022 Plan"), the 2020 Amended and Restated Incentive Plan (the "2020 Plan"), and the 2018 Amended and Restated Incentive Plan (the "2018 Plan; and together with the 2020 Plan and the 2022 Plan, the "Prior Plans"). No further awards may be made pursuant to the Prior Plans.

Restricted Stock Units

In July 2024, the Company issued restricted stock units (the "RSUs") to acquire up to 215,325 shares of common stock pursuant to the 2024 Plan. As of June 30, 2024, an aggregate of 425,169 of unvested restricted stock units are outstanding pursuant to the Prior Plans. Generally, the RSUs entitle the recipients, subject to continued service through the three-year vesting period to receive (i) the underlying shares if and to the extent certain performance and/or market conditions are satisfied at the vesting date, and (ii) an amount equal to the cash dividends that would have been paid during the three-year performance period with respect to the shares of common stock underlying the RSUs if, when, and to the extent, the related RSUs vest. The shares underlying the RSUs are not participating securities but are contingently issuable shares.

On May 6, 2024, the compensation committee of the Company's board of directors approved the vesting and issuance of 123,384 shares of common stock subject to RSUs (of the 209,322 shares subject to RSUs) granted in 2021 and the payout of $359,000 pursuant to the related dividend equivalent rights. The balance of 85,938 RSUs granted in 2021 that did not vest have expired.

Expense is recognized on the RSUs which the Company expects to vest over the applicable vesting period. For the three months ended June 30, 2024 and 2023, the Company recorded $231,000 and $369,000, respectively and for the six months ended June 30, 2024 and 2023, the Company recorded $703,000 and $883,000, respectively of compensation expense related to the amortization of unearned compensation with respect to the RSUs issued under the Prior Plans. At June 30, 2024 and December 31, 2023, $1,296,000 and $1,999,000 of compensation expense, respectively, has been deferred and will be charged to expense over the remaining vesting periods.

Restricted Stock

In January 2024, the Company granted 166,439 shares, of restricted stock pursuant to the 2022 Plan. As of June 30, 2024, an aggregate of 962,229 shares of unvested restricted stock are outstanding pursuant to the 2024 Plan and Prior Plans. The shares of restricted stock vest five years from the date of grant and under specified circumstances, including a change in control, may vest earlier. For financial statement purposes, the restricted stock is not included in the outstanding shares shown on the consolidated balance sheets until they vest, but is included in the earnings per share computation.

For the three months ended June 30, 2024 and 2023, the Company recorded $859,000 and $824,000, respectively and for the six months ended June 30, 2024 and 2023, the Company recorded $1,729,000 and $1,720,000, of compensation expense related to the amortization of unearned compensation with respect to the restricted stock awards. At June 30, 2024 and December 31, 2023, $8,844,000 and $7,484,000, respectively, has been deferred as unearned compensation and will be charged to expense over the remaining vesting periods of these restricted stock awards. The weighted average remaining vesting period of these shares of restricted stock is 2.5 years.

Share Repurchase

Pursuant to the Company’s repurchase program, as amended from time to time, the Company is authorized to repurchase shares of its common stock through open-market transactions, privately negotiated transactions, or otherwise.

During the three months ended June 30, 2024, the Company repurchased 53,619 shares of common stock at an average price per share of $17.34 for an aggregate cost of $930,000. During the six months ended June 30, 2024, the Company repurchased 176,680 shares of common stock at an average price of $18.10 for an aggregate cost of $3,198,000. As of June 30, 2024, the Company is authorized to repurchase up to $6,386,000 of shares through December 31, 2025.

During the three and six months ended June 30, 2023, the Company repurchased 309,153 shares of common stock at an average price per share of $18.87 for an aggregate cost of $5,836,000.

Per Share Data

Basic earnings per share is determined by dividing net income applicable to common stockholders for the applicable period by the weighted average number of shares of common stock outstanding during such 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. The RSUs are excluded from the basic earnings per share calculation as they are not participating securities.

Diluted earnings per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into shares of common stock or resulted in the issuance of shares of common stock that share in the earnings of the Company. Diluted earnings per share is determined by dividing net income applicable to common stockholders for the applicable period by the weighted average number of shares of common stock deemed to be outstanding

during such period.

In calculating diluted earnings per share, the Company includes only those shares underlying the RSUs that it anticipates will vest based on management's estimates as of the end of the most recent quarter. The Company excludes any shares underlying the RSUs from such calculation if their effect would have been anti-dilutive. 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 June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Numerator for basic and diluted earnings per share:
Net (loss) income	$	(2,309)	$	11,238	$	(5,445)	$	7,176
Deduct net income attributable to non-controlling interests	(36)		(36)		(71)		(72)
Deduct (loss) allocated to unvested restricted stock	(120)		(561)		(285)		(349)
Net (loss) income available for common stockholders: basic and diluted	$	(2,465)	$	10,641	$	(5,801)	$	6,755

Denominator for basic earnings per share:
Weighted average number of common shares outstanding	17,737,452		18,155,062		17,681,514		18,110,508
Effect of dilutive securities:
RSUs	—		65,752		—		47,296
Denominator for diluted earnings per share:
Weighted average number of shares	17,737,452		18,220,814		17,681,514		18,157,804

Earnings (loss) per common share, basic	$	(0.13)	$	0.59	$	(0.30)	$	0.37
Earnings (loss) per common share, diluted	$	(0.13)	$	0.58	$	(0.30)	$	0.37