EARNINGS PER SHARE
The following table sets forth the computation of the basic and diluted earnings per share (in thousands, except per share data):
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | Year ended December 31, | |
| | | | | 2025 | | 2024 | | 2023 | |
| Numerator for basic and diluted earnings per share: | | | | | | | | | | |
| Net income | | | | | $ | 51,507 | | | $ | 32,953 | | | $ | 33,413 | | |
| Less: Earnings allocated to unvested restricted stock | | | | | (687) | | | (432) | | | (306) | | |
| Income attributable to common stockholders | | | | | $ | 50,820 | | | $ | 32,521 | | | $ | 33,107 | | |
| | | | | | | | | | |
| Denominator: | | | | | | | | | | |
| Denominator for basic earnings per common share – weighted average shares outstanding | | | | | 15,428 | | | 14,971 | | | 14,803 | | |
| Effect of dilutive securities: | | | | | | | | | | |
| Stock options | | | | | 206 | | | 56 | | | 55 | | |
| | | | | | | | | | |
| Performance awards | | | | | — | | | 416 | | | 597 | | |
| Denominator for diluted earnings per common share – weighted average shares outstanding | | | | | 15,634 | | | 15,443 | | | 15,455 | | |
| | | | | | | | | | |
| Basic earnings per common share: | | | | | $ | 3.29 | | | $ | 2.17 | | | $ | 2.24 | | |
| Diluted earnings per common share: | | | | | $ | 3.25 | | | $ | 2.10 | | | $ | 2.14 | | |
Stock options excluded from the computation of diluted earnings per share because the inclusion of such stock options would result in an antidilutive effect are as follows (in thousands):
| | | | | | | | | | | | | | | | | | | | | | |
| | | Year ended December 31, | |
| | | | | 2025 | | 2024 | | 2023 | |
| Antidilutive stock options | | | | | 223 | | | 1,143 | | | 1,208 | | |
Share-based awards that contain non-forfeitable rights to dividends or dividend equivalents, whether paid or unpaid, are participating securities and included in the computation of both basic and diluted earnings per share. Our grants of stock awards to our employees are considered participating securities and we have prepared our earnings per share calculations to exclude earnings allocated to unvested restricted stock awards, using the two-class method, in the basic and diluted weighted average shares outstanding calculation.
About Earnings Per Share Disclosures
The earnings per share disclosure breaks down the calculation from net income to both basic and diluted EPS, revealing the full impact of a company's capital structure on per-share economics. The reconciliation between basic and diluted share counts exposes how many stock options, RSUs, convertible securities, and warrants are potentially dilutive to existing shareholders.
Key signals: a widening gap between basic and diluted shares indicates growing dilution from equity compensation or convertible instruments. Anti-dilutive securities excluded from the diluted calculation deserve attention — they represent latent dilution that will materialize if the stock price rises. Watch for the effect of share buybacks on per-share metrics: EPS growth driven primarily by repurchases rather than income growth signals weakening fundamentals. Compare year-over-year changes in the diluted share count against equity compensation expense to assess whether management is effectively managing dilution.