Earnings Per Share of Common Stock

6 Months Ended

Mar. 31, 2017

Basic net income per common share is computed by dividing net income available to common shareholders by the weighted average number of common shares outstanding for the period. Diluted net income per common share reflects the maximum dilution that would have resulted from the assumed exercise and share repurchase related to dilutive stock options and is computed by dividing net income by the assumed weighted average number of common shares outstanding.

We are required to present earnings per share, or EPS, utilizing the two class method because we had outstanding, non-vested share-based payment awards that contain non-forfeitable rights to dividends or dividend equivalents, which are considered participating securities.

Basic and diluted earnings per share computations for the Company’s reported net income attributable to common stockholders are as follows:



	For the three months ended				For the six months ended
	March 31, 2017		March 31, 2016		March 31, 2017		March 31, 2016
	(Amounts in thousands except per share data)
Net income	$	428	$	503	$	385	$	786
Less: net income attributable to nonvested common stock	18		23		28		30
Net income attributable to common stockholders	$	410	$	480	$	357	$	756

Weighted average total shares outstanding – basic	3,888		3,782		3,986		3,732
Less: weighted average non-vested shares outstanding	164		173		289		143
Weighted average number of common shares outstanding – basic	3,724		3,609		3,697		3,589
Potential common shares from non-vested stock awards and the assumed exercise of stock options	123		121		110		139
Weighted average common shares outstanding – diluted	3,847		3,730		3,807		3,728

Net income per share – basic	$	0.11	$	0.13	$	0.10	$	0.21
Net income per share – diluted	$	0.11	$	0.13	$	0.09	$	0.20

All anti-dilutive securities, including certain stock options, are excluded from the diluted income per share computation. For the three and six months ended March 31, 2017, there were no shares subject to stock options excluded from the diluted income per share calculation because their inclusion would have been anti-dilutive as their exercise price exceeded fair value. For the three and six months ended March 31, 2016, 30,000 and 33,000 shares subject to stock options, respectively, were excluded from the diluted income per share calculation because their inclusion would have been anti-dilutive as their exercise price exceeded fair value.