EARNINGS PER COMMON SHARE ("EPS")

12 Months Ended

Sep. 30, 2022

The Company has granted restricted share awards with dividend rights that are considered to be participating securities. Accordingly, a portion of the Company’s earnings is allocated to those participating securities in the earnings per share calculation under the two-class method. Basic EPS is computed using the two-class method by dividing income available to common stockholders after the allocation of dividends and undistributed earnings to the participating securities by the weighted average number of common shares outstanding for the period. Diluted EPS is calculated using the more dilutive of the treasury stock method or the two-class method. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised, and is computed after giving consideration to the weighted average dilutive effect of the Company’s stock options, performance share units, and nonvested restricted stock, where applicable. Diluted EPS under the two-class method also considers the allocation of earnings to the participating securities. Antidilutive securities are disregarded in earnings per share calculations. Diluted EPS shown below reflects the two-class method, as diluted EPS under the two-class method was more dilutive than under the treasury stock method.

A reconciliation of net income and common stock share amounts used in the computation of basic and diluted earnings per share is presented below.


	Fiscal Year Ended September 30,
(Dollars in thousands, except per share data)	2022		2021		2020
Basic income per common share:
Net income attributable to Pathward Financial, Inc.	$	156,386	$	141,708	$	104,720
Dividends and undistributed earnings allocated to participating securities	(2,565)		(2,698)		(2,414)
Basic net earnings available to common stockholders	153,821		139,010		102,306
Undistributed earnings allocated to nonvested restricted stockholders	2,468		2,575		2,249
Reallocation of undistributed earnings to nonvested restricted stockholders	(2,468)		(2,573)		(2,249)


Diluted net earnings available to common stockholders	$	153,821	$	139,012	$	102,306

Total weighted-average basic common shares outstanding	29,227,071		31,729,596		34,829,971
Effect of dilutive securities(1)
Stock options	—		—		—
Performance share units	5,176		21,926		—

Total effect of dilutive securities	5,176		21,926		—
Total weighted-average diluted common shares outstanding	29,232,247		31,751,522		34,829,971

Net earnings per common share:
Basic earnings per common share	$	5.26	$	4.38	$	2.94
Diluted earnings per common share(2)	$	5.26	$	4.38	$	2.94

(1) Represents the effect of the assumed exercise of stock options and vesting of performance share units and restricted stock, as applicable, utilizing the treasury stock method.

(2) Excluded from the computation of diluted earnings per share for the fiscal years ended September 30, 2022, 2021, and 2020, respectively, were 487,476, 615,811, and 821,738 weighted average shares of nonvested restricted stock because their inclusion would be anti-dilutive.