EARNINGS PER COMMON SHARE ("EPS")

3 Months Ended

Dec. 31, 2020

The Company has granted restricted share awards with dividend rights that are considered to be participating securities. Accordingly, a portion of the Company’s earnings is allocated to those participating securities in the earnings per share calculation under the two-class method. Basic earnings per common share is computed using the two-class method by dividing income available to common stockholders after the allocation of dividends and undistributed earnings to the participating securities by the weighted average number of common shares outstanding for the period. Diluted earnings per common share is calculated using the more dilutive of the treasury stock method or the two-class method. Diluted earnings per common share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised, and is computed after giving consideration to the weighted average dilutive effect of the Company’s stock options, performance share units, and nonvested restricted stock, where applicable. Diluted EPS under the two-class method also considers the allocation of earnings to the participating securities. Antidilutive securities are disregarded in earnings per share calculations. Diluted EPS shown below reflects the two-class method, as diluted EPS under the two-class method was more dilutive than under the treasury stock method.

A reconciliation of net income and common stock share amounts used in the computation of basic and diluted earnings per share is presented below.


	Three Months Ended December 31,
(Dollars in Thousands, Except Share and Per Share Data)	2020		2019
Basic income per common share:
Net income attributable to Meta Financial Group, Inc.	$	28,037	$	21,068
Dividends and undistributed earnings allocated to participating securities	(554)		(460)
Basic net earnings available to common stockholders	27,483		20,608
Undistributed earnings allocated to nonvested restricted stockholders	521		420
Reallocation of undistributed earnings to nonvested restricted stockholders	(521)		(420)
Diluted net earnings available to common stockholders	$	27,483	$	20,608

Total weighted-average basic common shares outstanding	32,782,285		36,613,699
Effect of dilutive securities(1)
Stock options	—		34,090
Performance share units	8,610		—
Total effect of dilutive securities	8,610		34,090
Total weighted-average diluted common shares outstanding	32,790,895		36,647,789

Net earnings per common share:
Basic earnings per common share	$	0.84	$	0.56
Diluted earnings per common share(2)	$	0.84	$	0.56

(1) Represents the effect of the assumed exercise of stock options and vesting of performance share units and restricted stock, as applicable, utilizing the treasury stock method.

(2) Excluded from the computation of diluted earnings per share for the three months ended December 31, 2020 and 2019, respectively, were 660,659 and 818,089 weighted average shares of nonvested restricted stock because their inclusion would be anti-dilutive.