4. EARNINGS PER SHARE

Basic earnings per share (“EPS”) is computed by dividing net income or loss applicable to common stock by the weighted average number of common shares outstanding during the period, without considering any dilutive items. Diluted EPS is computed by dividing net income or loss applicable to common stock 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 exercise of outstanding stock options and assumed vesting of restricted stock. For the three and six months ended September 30, 2019 and 2018, there were no stock options excluded in computing diluted EPS.

The following table presents a reconciliation of the components used to compute basic and diluted EPS for the periods indicated:


	Three Months Ended				Six Months Ended
	September 30,				September 30,
	2019		2018		2019		2018
Basic EPS computation:
Numerator-net income	$	4,534,000	$	4,229,000	$	8,726,000	$	8,671,000
Denominator-weighted average common shares outstanding		22,643,103		22,579,839		22,631,406		22,575,009
Basic EPS	$	0.20	$	0.19	$	0.39	$	0.38
Diluted EPS computation:
Numerator-net income	$	4,534,000	$	4,229,000	$	8,726,000	$	8,671,000
Denominator-weighted average common shares outstanding		22,643,103		22,579,839		22,631,406		22,575,009
Effect of dilutive stock options and restricted stock		59,593		78,898		62,661		80,288
Weighted average common shares and common stock equivalents		22,702,696		22,658,737		22,694,067		22,655,297
Diluted EPS	$	0.20	$	0.19	$	0.38	$	0.38