Note 3: Earnings per Common Share

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. There were no anti-dilutive stock options excised for the three months ended March 31, 2025 and March 31, 2024, 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)	2025		2024
Net income attributable to Pathfinder Bancorp, Inc.	$	2,974	$	2,120
Series A Non-Voting Common Stock dividends		138		138
Warrant dividends		13		13
Undistributed earnings allocated to participating securities		565		363
Net income available to common shareholders - Voting	$	2,258	$	1,606

Net income attributable to Pathfinder Bancorp, Inc.	$	2,974	$	2,120
Voting Common Stock dividends		476		471
Warrant dividends		13		13
Undistributed earnings allocated to participating securities		1,829		1,165
Net income available to common shareholders - Non-Voting	$	656	$	471

Basic and diluted weighted average common shares outstanding - Voting		4,749		4,701
Basic and diluted weighted average common shares outstanding - Series A Non-Voting		1,380		1,380

Basic earnings per common share-Voting	$	0.48	$	0.34
Basic earnings per common share-Series A Non-Voting	$	0.48	$	0.34
Diluted earnings per common share-Voting	$	0.41	$	0.34
Diluted earnings per common share-Series A Non-Voting	$	0.41	$	0.34