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 to purchase common stock. 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 December 31, 2019, all shares had been allocated under the Bank's ESOP. At December 31, 2018, there were 14,027 shares 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 ended December 31, 2019 and 2018 is as follows (dollars in thousands, except per share amounts):



	Three Months Ended December 31,
	2019		2018

Numerator – net income	$	6,652	$	5,615

Denominator – weighted average common shares outstanding	8,341,470		8,293,212

Basic net income per common share	$	0.80	$	0.68

Diluted net income per common share computation
Numerator – net income	$	6,652	$	5,615

Denominator – weighted average common shares outstanding	8,341,470		8,293,212
Effect of dilutive stock options (1)	133,559		164,491
Weighted average common shares outstanding - assuming dilution	8,475,029		8,457,703

Diluted net income per common share	$	0.78	$	0.66

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(1) For the three months ended December 31, 2019 and 2018, average options to purchase 104,816 and 102,850 shares of common stock were outstanding but not included in the computation of diluted net income per share because their effect would have been anti-dilutive.