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. Common stock equivalents arise from the assumed conversion of outstanding stock options to purchase common stock. Shares owned by the Bank’s ESOP that had not been allocated were not considered to be outstanding for the purpose of computing basic and diluted net income per common share. At March 31, 2020 and March 31, 2019, all shares had been allocated under the Bank's ESOP.

Information regarding the calculation of basic and diluted net income per common share for the three and six months ended March 31, 2020 and 2019 is as follows (dollars in thousands, except per share amounts):



	Three Months Ended March 31,				Six Months Ended March 31,
	2020		2019		2020		2019

Numerator – net income	$	5,049	$	6,114	$	11,701	$	11,729

Denominator – weighted average common shares outstanding	8,344,201		8,310,074		8,342,828		8,301,550

Basic net income per common share	$	0.61	$	0.74	$	1.40	$	1.41

Diluted net income per common share computation
Numerator – net income	$	5,049	$	6,114	$	11,701	$	11,729

Denominator – weighted average common shares outstanding	8,344,201		8,310,074		8,342,828		8,301,550
Effect of dilutive stock options (1)	112,458		154,576		123,066		159,588
Weighted average common shares outstanding - assuming dilution	8,456,659		8,464,650		8,465,894		8,461,138

Diluted net income per common share	$	0.60	$	0.72	$	1.38	$	1.39

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(1) For the three and six months ended March 31, 2020, average options to purchase 138,362 and 121,497 shares of common stock were outstanding but not included in the computation of diluted net income per share because their effect would have been anti-dilutive. For the three and six months ended March 31, 2019, average options to purchase 102,150 and 102,504 shares of common stock, respectively, were outstanding but not included in the computation of diluted net income per share because their effect would have bee anti-dilutive.