Earnings per Share

3 Months Ended

Mar. 31, 2023

Basic earnings per share is calculated by dividing net income attributable to the Company available to common stockholders by the weighted average number of common shares outstanding for the three months ended March 31, 2023 and 2022. Diluted earnings per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were either exercised or converted into common stock or resulted in the issuance of common stock that would share in the earnings of the Company. The dilutive effect of options is reflected in diluted earnings per share by application of the treasury stock method. The dilutive effect of shares to be purchased under the Company’s Employee Stock Purchase Plan is reflected in diluted earnings per share by the weighted-average number of shares outstanding that would have been outstanding during the period. The dilutive effect of convertible debt is reflected in diluted earnings per share by application of the if-converted method. The Company uses the two-class method to determine earnings per share.

For calculating basic earnings per share, for the three months ended March 31, 2023, the weighted average number of shares outstanding exclude 1,750,268 non-vested restricted shares and 9,690 unexercised substantive options. The computation of diluted earnings per share for the three months ended March 31, 2023 did not assume the effect of restricted shares or substantive options because the effects were antidilutive.

For calculating basic earnings per share, for the three months ended March 31, 2022, the weighted average number of shares outstanding exclude 2,080,691 non-vested restricted shares and 14,586 unexercised substantive options. The computation of diluted earnings per share for the three months ended March 31, 2022 did not assume the effect of restricted shares or substantive options because the effects were antidilutive.

The following table represents a reconciliation of the net income and weighted average shares outstanding for the calculation of basic and diluted earnings per share for the three months ended March 31, 2023 and 2022 (in thousands, except share data):


	For the Three Months Ended March 31,
	2023		2022
Numerator
Net income	$	537	$	1,457
Earnings allocated to non-vested shares	69		254
Subtotal	$	468	$	1,203
Denominator
Weighted average common shares outstanding	11,800,308		9,926,395
Effect of dilutive nominal options	–		–
Effect of dilutive contingently earned shares	869,273		117,399
Dilutive average shares outstanding	12,669,581		10,043,794
Basic earnings per share	$	0.04	$	0.12
Dilutive earnings per share	$	0.04	$	0.12