Net Income Per Common Share

6 Months Ended

Mar. 31, 2021

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.

Information regarding the calculation of basic and diluted net income per common share for the three and six months ended March 31, 2021 and 2020 is as follows (dollars in thousands, except per share amounts):


	Three Months Ended March 31,				Six Months Ended March 31,
	2021		2020		2021		2020
Basic net income per common share computation
Numerator – net income	$	7,251	$	5,049	$	14,541	$	11,701





Denominator – weighted average common shares outstanding	8,331,121		8,344,201		8,322,210		8,342,828

Basic net income per common share	$	0.87	$	0.61	$	1.75	$	1.40

Diluted net income per common share computation
Numerator – net income	$	7,251	$	5,049	$	14,541	$	11,701





Denominator – weighted average common shares outstanding	8,331,121		8,344,201		8,322,210		8,342,828
Effect of dilutive stock options (1)	113,677		112,458		106,385		123,066

Weighted average common shares outstanding - assuming dilution	8,444,798		8,456,659		8,428,595		8,465,894

Diluted net income per common share	$	0.86	$	0.60	$	1.73	$	1.38

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(1) For the three and six months ended March 31, 2021, average options to purchase 135,590 and 136,631 shares of common stock, respectively, 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, 2020, average options to purchase 138,362 and 121,497 shares of common stock, respectively, were outstanding but not included in the computation of diluted net income per shares, because their effect would have been anti-dilutive.