Net Income Per Common Share

9 Months Ended

Jun. 30, 2013

Earnings Per Share [Abstract]

Net Income Per Common Share

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 and the outstanding warrant to purchase common stock.  In accordance with the Financial Accounting Standards Board (“FASB”) guidance for stock compensation, shares owned by the Bank’s ESOP that have not been allocated are not considered to be outstanding for the purpose of computing basic and diluted net income per common share. At June 30, 2013 and 2012, there were 225,070 and 264,520 shares, respectively, that had not been allocated under the Bank’s ESOP.

Information regarding the calculation of basic and diluted net income per common share for the three months and nine months ended June 30, 2013 and 2012 is as follows (dollars in thousands, except per share amounts):

	Three Months Ended June 30						Nine Months Ended June 30
	2013			2012			2013			2012
	(In thousands, except for per share data)
Basic net income per common share computation
Numerator – net income	$	876		$	1,348		$	3,863		$	3,438
Preferred stock dividends	(151		)	(208		)	(559		)	(624		)
Preferred stock discount accretion	(47		)	(61		)	(236		)	(179		)
Repurchase of preferred stock at a discount	—			—			255			—
Net income to common shareholders	$	678		$	1,079		$	3,323		$	2,635
Denominator – weighted average common shares outstanding	6,818,752			6,780,516			6,816,772			6,780,516
Basic net income per common share	$	0.10		$	0.16		$	0.49		$	0.39
Diluted net income per common share computation
Numerator – net income	$	876		$	1,348		$	3,863		$	3,438
Preferred stock dividends	(151		)	(208		)	(559		)	(624		)
Preferred stock discount accretion	(47		)	(61		)	(236		)	(179		)
Repurchase of preferred stock at a discount	—			—			255			—
Net income to common shareholders	$	678		$	1,079		$	3,323		$	2,635
Denominator – weighted average common shares outstanding	6,818,752			6,780,516			6,816,772			6,780,516
Effect of dilutive stock options (1)	18,458			—			13,035			—
Effect of dilutive stock warrant (2)	65,287			—			40,944			—
Weighted average common shares and common stock equivalents	6,902,497			6,780,516			6,870,751			6,780,516
Diluted net income per common share	$	0.10		$	0.16		$	0.48		$	0.39

____________________________________________

(1) For the three and nine months ended June 30, 2013, options to purchase 56,546 and 131,152 shares of common stock, respectively, were outstanding but not included in the computation of diluted net income per common share because their effect would have been anti-dilutive. For the three and nine months ended June 30, 2012, options to purchase 110,726 and 133,652 shares of common stock, respectively, were outstanding but not included in the computation of diluted net income per common share because their effect would have been anti-dilutive.

(2) For the three and nine months ended June 30, 2012, a warrant to purchase 370,899 shares of common stock was outstanding but not included in the computation of diluted net income per common share because the warrant's exercise price was greater than the average market price of the common stock, and, therefore, its effect would have been anti-dilutive.