ASC Topic 260, "Earnings Per Share" requires the use of the two-class method of computing both basic and diluted earnings (loss) per share for all periods presented for each class of common stock and participating securities. Under the two-class method, all earnings (distributed and undistributed) are allocated to common shares and participating securities according to their respective rights to receive dividends. The unvested RSUs granted under our Equity Incentive Plans to certain employees of the Manager qualify as participating securities as RSUs have non-forfeitable rights to participate in dividends. Therefore, unvested RSUs are included in the calculation of basic earnings per share.

For the three and six months ended June 30, 2026 and 2025, dilutive earnings per share was calculated under the more dilutive computation of the treasury stock method and the if converted method. Under the treasury stock method, the denominator includes the weighted-average outstanding common shares plus the incremental shares related to participating securities. The incremental shares are determined by subtracting the average unrecognized compensation cost for the period divided by the average stock price from the unvested RSUs.

The table below presents the computation of basic and diluted net income per share of common stock for the three and six months ended June 30, 2026 and 2025 ($ in thousands except per share data):


	Three Months Ended June 30,						Six Months Ended June 30,
	2026			2025			2026			2025
Net income	$	25,779		$	20,739		$	52,006		$	46,730
Less: Preferred dividends		(3,068	)		(3,068	)		(6,136	)		(6,136	)
Less: Earnings attributable to participating securities		—			—			—			—
Less: Dividends on participating securities		(8,553	)		(556	)		(9,123	)		(1,117	)
Net income attributable to common stockholders, basic and diluted	$	14,158		$	17,115		$	36,747		$	39,477

Number of Shares:
Basic weighted-average shares of common stock outstanding		131,022,330			138,943,566			135,043,996			138,792,126
Diluted weighted-average shares of common stock outstanding		131,597,073			139,208,860			135,634,057			139,103,947

Earnings Per Share Attributable to Common Stockholders
Basic	$	0.11		$	0.12		$	0.27		$	0.28
Diluted	$	0.11		$	0.12		$	0.27		$	0.28

For the three and six months ended June 30, 2026, 574,742 and 590,061 incremental shares, respectively, were included in the calculation of diluted net income per share because the effect was dilutive. For the three and six months ended June 30, 2025, 265,295 and 311,821 incremental shares, respectively, were included in the calculation of diluted net income per share because the effect was dilutive.