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Net Income Per Common Share
 3 Months Ended
Dec. 31, 2013
Earnings Per Share [Abstract]  
Net Income Per Common Share
NET INCOME PER COMMON SHARE
Basic net income per common share is computed by dividing net income to common shareholders by the weighted average number of common shares outstanding during the period, without considering any dilutive items.  Diluted net income per common share is computed by dividing net income to common shareholders by the weighted average number of common shares and common stock equivalents for items that are dilutive, net of shares assumed to be repurchased using the treasury stock method at the average share price for the Company’s common stock during the period.  The dividend and related accretion for the amount of the Company's Series A Preferred Stock outstanding for the respective period was deducted from net income in computing net income to common shareholders.  Common stock equivalents arise from the assumed conversion of outstanding stock options and the outstanding warrant to purchase common stock.  In accordance with the Financial Accounting Standards Board (“FASB”) guidance for stock compensation, shares owned by the Bank’s ESOP that have not been allocated are not considered to be outstanding for the purpose of computing basic and diluted net income per common share. At December 31, 2013 and 2012, there were 191,916 and 229,234 shares, respectively, that had not been allocated under the Bank’s ESOP.








 
Information regarding the calculation of basic and diluted net income per common share for the three months ended December 31, 2013 and 2012 is as follows (dollars in thousands, except per share amounts):
 
Three Months Ended December 31
 
2013

 
2012

 
(Dollars in thousands, except for per share data)
Basic net income per common share computation
 
 
 
Numerator – net income
$
1,611

 
$
1,708

Preferred stock dividends
(136
)
 
(201
)
Preferred stock discount accretion
(70
)
 
(63
)
Net income to common shareholders
$
1,405

 
$
1,444

 
 
 
 
Denominator – weighted average
common shares outstanding
6,853,683

 
6,815,782

 
 
 
 
Basic net income per common share
$
0.20


$
0.21

 
 
 
 
Diluted net income per common share computation
 
 
 
Numerator – net income
$
1,611

 
$
1,708

Preferred stock dividends
(136
)
 
(201
)
Preferred stock discount accretion
(70
)
 
(63
)
Net income to common shareholders
$
1,405

 
$
1,444

 
 
 
 
Denominator – weighted average
common shares outstanding
6,853,683

 
6,815,782

Effect of dilutive stock options (1)
29,596

 
5,224

Effect of dilutive stock warrant (2)
95,106

 
—

Weighted average common shares
and common stock equivalents
6,978,385

 
6,821,006

 
 
 
 
Diluted net income per common share
$
0.20

 
$
0.21

____________________________________________
(1) For the three months ended December 31, 2013 and 2012, average options to purchase 125,198 and 212,152 shares of common stock, respectively, were outstanding but not included in the computation of diluted net income per common share because their effect would have been anti-dilutive.
(2) For the three months ended December 31, 2012, a warrant to purchase 370,899 shares of common stock was outstanding but not included in the computation of diluted net income per common share because the warrant's exercise price was greater than the average market price of the common stock, and, therefore, its effect would have been anti-dilutive.