Net Income Per Share

9 Months Ended

Sep. 30, 2020

Net Income Per Share

Net Income Per Share

8. Net Income Per Share

Grants of restricted stock of the Company and restricted stock units in share-based payment transactions are considered participating securities prior to vesting and, therefore, are considered in computing basic earnings per share under the two-class method. The two-class method is an earnings allocation method for calculating earnings per share when a company’s capital structure includes either two or more classes of common stock or common stock and participating securities. Earnings per basic share under the two-class method is calculated based on dividends declared on common shares and other participating securities (“distributed earnings”) and the rights of participating securities in any undistributed earnings, which represents net income remaining after deduction of dividends accruing during the period. The undistributed earnings are allocated to all outstanding common shares and participating securities based on the relative percentage of each security to the total number of outstanding participating securities. Earnings per basic share represents the summation of the distributed and undistributed earnings per share class divided by the total number of shares.

Through September 30, 2020, all of the Company’s participating securities received dividends or dividend equivalents at an equal dividend rate per share or unit. As a result, distributions to participating securities for the three and nine months ended September 30, 2020 and 2019 have been included in net income attributable to common stockholders to calculate net income per basic and diluted share. We have considered the dilutive effect of the shares necessary to settle the Exchangeable Senior Notes on the if-exchanged method basis for the three and nine months ended September 30, 2020 and 2019, and as this effect was anti-dilutive for both periods, these shares necessary to settle the Exchangeable Senior Notes were excluded from diluted earnings per share.

Computations of net income per basic and diluted share (in thousands, except share data) were as follows:

	For the Three Months Ended				For the Nine Months Ended
	September 30,				September 30,
	2020		2019		2020		2019
Net income	$	19,215	$	6,520	$	44,397	$	13,573
Preferred stock dividend		(338)		(338)		(1,014)		(1,014)
Distribution to participating securities		(133)		(109)		(369)		(256)
Net income attributable to common stockholders used to compute net income per share	$	18,744	$	6,073	$	43,014	$	12,303
Weighted average common share outstanding:
Basic		21,594,637		10,918,477		18,315,231		10,088,036
Diluted		21,708,725		11,057,697		18,429,228		10,225,574
Net income attributable to common stockholders per share:
Basic	$	0.87	$	0.56	$	2.35	$	1.22
Diluted	$	0.86	$	0.55	$	2.33	$	1.20