SHAREHOLDERS' EQUITY

12 Months Ended

Sep. 30, 2018

Stockholders' Equity Note [Abstract]

SHAREHOLDERS' EQUITY

STOCKHOLDERS' EQUITY

Common Stock Dividend Distribution

During the years ended September 30, 2018 and 2017, the Company declared an aggregate of $0.78 and $0.18 per share in cash dividends. The Company did not declare or pay any dividends during the year ended September 30, 2016.

Stock Based Compensation

Each of the Company's 2018 Incentive Plan (the "2018 Plan") and Amended and Restated 2016 Incentive Plan (the "2016 Plan") authorized the Company to grant: (i) up to 600,000 shares of common stock pursuant to stock options, restricted stock, restricted stock units, and performance shares awards; and (ii) cash settled dividend equivalent rights in tandem with the grant of restricted stock units and certain performance based awards. The Company's 2012 Incentive Plan (the "2012 Plan") authorized the Company to grant up to 600,000 shares of common stock pursuant to stock options, restricted stock, restricted stock units and performance share awards. No further awards may be granted pursuant to the 2016 Plan and the 2012 Plan, which are referred to collectively as the "Prior Plans".

Restricted Stock Units

 In June 2016, pursuant to the 2016 Plan, the Company issued restricted stock units (the "Units") to acquire up to 450,000 shares of common stock. The Units entitle the recipients, subject to continued service through March 31, 2021 (the “Performance Period”), to receive in the aggregate, (i) up to 200,000 shares (the “TSR Award”) of common stock based on achieving, during the Performance Period, specified levels in compounded annual growth rate (“CAGR”) in total stockholder return (“TSR”), and (ii) up to 200,000 shares of common stock based on achieving, during the Performance Period, specified levels in CAGR in adjusted funds from operations, as determined pursuant to the performance agreement (the "AFFO Award"). In addition, up to 50,000 shares (the "Adjustment Awared")may be added to or subtracted from the TSR Award, based on attaining or failing to attain, as the case may be, during the Performance Period, of CAGR in TSR relative to the CAGR in TSR

NOTE 12—STOCKHOLDERS' EQUITY (Continued)

for the REITs that comprise, with specified exceptions, the FTSE NAREIT Equity Apartment  Index. The recipients also received dividend equivalent rights entitling them to receive cash dividends with respect to the shares of common stock underlying their Units as if the underlying shares were outstanding during the Performance Period, if, when, and to the extent, the related Units vest. The Units were determined not to be participating securities and accordingly, for financial statement purposes, the shares underlying the Units are excluded in the outstanding shares reflected on the consolidated balance sheet and from the calculation of basic earnings per share. Though the 450,000 shares underlying the units are contingently issuable shares, 250,000 of such shares have not been included in the calculation of diluted earnings per share as the criteria with respect to the AFFO Award and the Adjustment Award were not met at September 30, 2018. The Company included 200,000 shares of common stock underlying the TSR Awards in the calculation of diluted earnings per share as the market criteria with respect to the TSR award have been met at September 30, 2018.

For the TSR Awards, a third party appraiser prepared a Monte Carlo simulation pricing model to assist management in determining fair value. For the AFFO Awards, fair value is based on the market value on the date of grant. Expense is not recognized on the Units which the Company does not expect to vest as a result of conditions the Company does not expect to be satisfied. The total amount recorded at the grant date as deferred compensation with respect to the Units was $2,117,000. As of September 30, 2018, $1,432,000 of deferred compensation allocated to the AFFO Award has been reversed, as it is not anticipated that the performance goals will be met. The remaining $685,000 allocated to the TSR Award is being charged to general and administrative expense over the Performance Period. The deferred compensation expense to be recognized is net of certain forfeiture and performance assumptions. The Company recorded $(56,000), $240,000 and $146,000 of compensation expense related to the amortization of unearned compensation with respect to the Units in the years ended September 30, 2018, 2017 and 2016, respectively. At September 30, 2018 and 2017,  $354,000  and $1,015,000 respectively, has been deferred as unearned compensation and will be charged to expense over the balance of the Performance Period.

Restricted Stock

In March 2018, the Company granted 144,797 shares of restricted stock pursuant to the 2018 Plan. As of September 30, 2018, an aggregate of 705,847 shares of unvested restricted stock are outstanding pursuant to the Plan and the Prior Plans. All shares of restricted stock vest five years from the date of grant and under specified circumstances, including a change in control, may vest earlier. For financial statement purposes, the restricted stock is not included in the outstanding shares shown on the consolidated balance sheets until they vest, but are included in the earnings per share computation. During the years ended September 30, 2018, 2017 and 2016, the Company recorded $1,044,000 and $978,000, and $859,000 respectively, of compensation expense related to the amortization of unearned compensation with respect to the restricted stock awards. At September 30, 2018 and 2017, $3,023,000 and $2,356,000, respectively, has been deferred as unearned compensation and will be charged to expense over the remaining vesting periods of these restricted stock awards. The weighted average vesting period of these restricted shares is 2.3 years.

Changes in the number of restricted shares outstanding under the Company's equity incentive plans are shown below:

	Year Ended September 30,
	2018	2017	2016
Outstanding at beginning of the year	689,375	666,775	672,875
Issued	144,797	147,500	141,050
Cancelled	(400)	—	(16,850)
Vested	(127,925)	(124,900)	(130,300)
Outstanding at the end of the year	705,847	689,375	666,775

NOTE 12—STOCKHOLDERS' EQUITY (Continued)

The following table reflects the compensation expense recorded for all incentive plans (dollars in thousands):

	Year Ended September 30,
	2018		2017		2016
Restricted stock grants	$	1,044	$	978	$	859
Restricted stock units	(56)		240		146
Total compensation	$	988	$	1,218	$	1,005

Earnings Per Share

The following table sets forth the computation of basic and diluted earnings per share (dollars in thousands):

	Year Ended September 30,
	2018		2017		2016
Numerator for basic and diluted earnings per share attributable to common stockholders:
Net income attributable to common stockholders	$	23,773	$	13,600	$	31,289
Denominator:
Denominator for basic earnings per share—weighted average number of shares	14,580,398		13,993,638		14,017,279
Effect of dilutive securities	200,000		25,205		—
Denominator for diluted earnings per share—adjusted weighted average number of shares and assumed conversions	14,780,398		14,018,843		14,017,279
Basic earnings per share	$	1.63	$	0.97	$	2.23
Diluted earnings per share	$	1.61	$	0.97	$	2.23

Equity Distribution Agreements

In January 2018, the Company entered into equity distribution agreements, as amended in May 2018, with three sales agents to sell an aggregate of $30,000 of its common stock from time-to-time in an at-the-market offering. Since the commencement of the at-the-market offering program through September 30, 2018, the Company sold 1,590,935 shares of common stock for net proceeds of $20,411 after giving effect to related fees, commissions and offering related expenses of $502,000.

Share Buyback

On March 11, 2016, the Board of Directors authorized the Company to repurchase up to $5,000,000 of shares of common stock through September 30, 2017. Pursuant to this authorization, the Company, from such date through September 30, 2017, repurchased 98,318 shares of common stock at an average market price of $7.37 per share, for an aggregate purchase price, including commissions, of $724,000.

On September 12, 2017, the Board of Directors authorized the Company, effective as of October 1, 2017, to purchase up to $5.0 million of its shares of common stock through September 30, 2019. Pursuant to this authorization, the Company from such date through September 30, 2018, repurchased 3,500 shares of common stock at an average price of $11.73 per share, for an aggregate purchase price, including commissions, of $41,000.