Net Income Per Common Share

12 Months Ended

Sep. 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 Timberland Bancorp’s common stock during the period.  The 5% dividend and related accretion for the amount of the Company's Series A Preferred Stock outstanding for the respective year is deducted from net income, and the discount on the redemption of Series A Preferred Stock is added to net income in computing net income to common shareholders. Common stock equivalents arise from assumed conversion of outstanding stock options and outstanding warrants to purchase common stock.  In accordance with 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 net income per common share.  Information regarding the calculation of basic and diluted net income per common share for the years ended September 30, 2013, 2012 and 2011 is as follows (dollars in thousands, except per share amounts):

	2013			2012			2011
Basic net income per common share computation
Numerator - net income	$	4,757		$	4,590		$	1,089
Preferred stock dividends	(710		)	(832		)	(832		)
Discount on redemption of preferred stock	255			—			—
Preferred stock discount accretion	(283		)	(240		)	(225		)
Net income to common stockholders	$	4,019		$	3,518		$	32
Denominator - weighted average common shares     outstanding	6,817,918			6,780,612			6,745,347
Basic net income per common share	$	0.59		$	0.52		$	—
Diluted net income per common share computation
Numerator - net income	$	4,757		$	4,590		$	1,089
Preferred stock dividends	(710		)	(832		)	(832		)
Discount on redemption of preferred stock	255			—			—
Preferred stock discount accretion	(283		)	(240		)	(225		)
Net income to common stockholders	$	4,019		$	3,518		$	32
Denominator - weighted average common shares     outstanding	6,817,918			6,780,612			6,745,347
Effect of dilutive stock options	16,555			—			177
Effect of dilutive stock warrant	52,522			—			—
Weighted average common shares outstanding-     assuming dilution	6,886,995			6,780,612			6,745,524
Diluted net income per common share	$	0.58		$	0.52		$	—

For the years ended September 30, 2013, 2012 and 2011, average options to purchase 109,953, 162,517 and 163,714 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 years ended September 30, 2012 and 2011, a warrant to purchase a weighted average of 370,899 shares 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 shares and, therefore, its effect would have been anti-dilutive.