Net Income Per Common Share

9 Months Ended

Jun. 30, 2015

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. 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 June 30, 2015 and 2014, there were 149,734 and 187,807 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 and nine months ended June 30, 2015 and 2014 is as follows (dollars in thousands, except per share amounts):



	Three Months Ended June 30,				Nine Months Ended June 30,
	2015		2014		2015		2014
Basic net income per common share computation
Numerator – net income	$	2,159	$	1,434	$	5,337	$	4,204
Preferred stock dividends	—		—		—		(136		)
Preferred stock discount accretion	—		—		—		(70		)
Net income to common shareholders	$	2,159	$	1,434	$	5,337	$	3,998

Denominator – weighted average common shares outstanding	6,902,067		6,857,149		6,897,381		6,855,811

Basic net income per common share	$	0.31	$	0.21	$	0.77	$	0.58

Diluted net income per common share computation
Numerator – net income	$	2,159	$	1,434	$	5,337	$	4,204
Preferred stock dividends	—		—		—		(136		)
Preferred stock discount accretion	—		—		—		(70		)
Net income to common shareholders	$	2,159	$	1,434	$	5,337	$	3,998

Denominator – weighted average common shares outstanding	6,902,067		6,857,149		6,897,381		6,855,811
Effect of dilutive stock options (1)	36,490		38,582		36,680		36,070
Effect of dilutive stock warrant	132,664		137,982		134,760		123,274
Weighted average common shares and common stock equivalents	7,071,221		7,033,713		7,068,821		7,015,155

Diluted net income per common share	$	0.31	$	0.20	$	0.76	$	0.57

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(1) For both the three and nine months ended June 30, 2015, average options to purchase 172,945 and 138,982 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. For the three and nine months ended June 30, 2014, average options to purchase 126,000 and 131,489 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.