Note 10. Net Income (Loss) Per Share

The Company accounts for earnings per share using the two-class method. The two-class method is an earnings allocation that determines net income per share for each class of common stock and participating securities according to participation rights in undistributed earnings. Non-vested restricted stock awards that include non-forfeitable rights to dividends are considered participating securities. Basic earnings per share is computed by dividing net income available to common stockholders for the period by the weighted average number of common shares outstanding for the period. The computation of diluted earnings per share is similar to basic earnings per share, except the denominator is increased to include the number of additional common shares that would have been outstanding if the potentially dilutive common shares had been issued.

The following table sets forth the computation of basic and diluted earnings (losses) per share for the periods indicated:


	Three Months Ended						Six Months Ended
	March 31,						March 31,
(in thousands, except share and per share data)	2019			2020			2019			2020
Numerator: Basic and Diluted
Net income (loss)	$	1,509		$	4,068		$	(94)		$	7,336
Dividends paid and accrued		(2,758)			(2,781)			(5,517)			(5,618)
Undistributed income (loss)		(1,249)			1,287			(5,611)			1,718
Percentage allocated to common shares (a)		100.0	%		99.3	%		100.0	%		99.3	%
Undistributed income (loss) allocated to common shares		(1,249)			1,279			(5,611)			1,707
Dividends paid on common shares outstanding		2,738			2,763			5,475			5,581
Net income (loss) available to common shares		1,489			4,042			(136)			7,288
Denominator: Basic and Diluted
Weighted average common shares outstanding		12,448,792			12,473,881			12,439,689			12,466,867
Adjustment for dilutive potential common shares		151,500			30,182			—			30,082
Weighted average shares outstanding - Diluted		12,600,292			12,504,063			12,439,689			12,496,949

Basic net income (loss) per share	$	0.12		$	0.32		$	(0.01)		$	0.58
Diluted net income (loss) per share	$	0.12		$	0.32		$	(0.01)		$	0.58

Number of stock option shares excluded as their effect would be anti-dilutive		313,028			561,457			313,787			561,457
Number of restricted stock shares excluded as their effect would be anti-dilutive		66,688			—			67,694			—
Number of deferred restricted stock shares excluded as their effect would be anti-dilutive		29,050			—			29,050			—
Number of performance share awards excluded as their effect would be anti-dilutive		55,762			—			49,432			—

(a) Percentage allocated to common shares - Weighted average
Common shares outstanding		12,448,792			12,473,881			12,439,689			12,466,867
Unvested participating shares		—			81,652			—			82,468
		12,448,792			12,555,533			12,439,689			12,549,335