Following shareholder approval received on June 4, 2021, the Company converted 1,380,283 shares of its Series B Convertible Perpetual Preferred Stock ("Convertible Perpetual Preferred Stock") to an equal number of shares of its newly-created Series A Non-Voting Common Stock. The conversion, which was effective on June 28, 2021, represented 100% of the Company's Convertible Perpetual Preferred Stock outstanding at the time of the conversion and retired the Convertible Perpetual Preferred Stock in perpetuity.

The Company has voting common stock, non-voting common stock and a warrant that are all eligible to participate in dividends equal to the voting common stock dividends on a per share basis. Securities that participate in dividends, such as the Company’s non-voting common stock and warrant, are considered “participating securities”. The Company calculates net income available to voting common shareholders using the two-class method required for capital structures that include participating securities.

In applying the two-class method, basic net income per share was calculated by dividing net income (less any dividends on participating securities) by the weighted average number of shares of voting common stock and participating securities outstanding for the period. Diluted earnings per share may include the additional effect of other securities, if dilutive, in which case the dilutive effect of such securities is calculated by applying either the two-class method or the Treasury Stock method to the assumed exercise or vesting of potentially dilutive common shares. The method yielding the more dilutive result is ultimately reported for the applicable period. Potentially dilutive common stock equivalents primarily consist of employee stock options and restricted stock units. Unallocated common shares held by the ESOP are not included in the weighted average number of common shares outstanding for purposes of calculating earnings per common share until they are committed to be released to plan participants.

Anti-dilutive shares are common stock equivalents with average exercise prices in excess of the weighted average market price for the period presented. Anti-dilutive stock options, not included in the computation below, were -0- for the three months ended March 31, 2023, and March 31, 2022, respectively.

The following table sets forth the calculation of basic and diluted earnings per share.


	Three months ended
	March 31,
(In thousands, except share and per share data)	2023		2022
Net income attributable to Pathfinder Bancorp, Inc.	$	2,599	$	2,950
Series A Non-Voting Common Stock dividends		124		124
Warrant dividends		11		11
Undistributed earnings allocated to participating securities		504		600
Net income available to common shareholders-Voting	$	1,960	$	2,215

Net income attributable to Pathfinder Bancorp, Inc.	$	2,599	$	2,950
Voting Common Stock dividends		416		409
Warrant dividends		11		11
Undistributed earnings allocated to participating securities		1,586		1,857
Net income available to common shareholders-Series A Non-Voting	$	586	$	673

Basic and diluted weighted average common shares outstanding-Voting		4,609		4,536
Basic and diluted weighted average common shares outstanding-Series A Non-Voting		1,380		1,380

Basic and diluted earnings per common share-Voting	$	0.43	$	0.49
Basic and diluted earnings per common share-Series A Non-Voting	$	0.43	$	0.49