EARNINGS PER COMMON SHARE ("EPS")

6 Months Ended

Mar. 31, 2023

EARNINGS PER COMMON SHARE ("EPS")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.


	Three Months Ended March 31,				Six Months Ended March 31,
(Dollars in thousands, except per share data)	2023		2022		2023		2022
Basic income per common share:
Net income attributable to Pathward Financial, Inc.	$	54,771	$	49,251	$	82,613	$	110,575
Dividends and undistributed earnings allocated to participating securities	(841)		(815)		(1,231)		(1,773)
Basic net earnings available to common stockholders	53,930		48,436		81,382		108,802
Undistributed earnings allocated to nonvested restricted stockholders	820		791		1,190		1,724
Reallocation of undistributed earnings to nonvested restricted stockholders	(818)		(791)		(1,187)		(1,723)


Diluted net earnings available to common stockholders	$	53,932	$	48,436	$	81,385	$	108,803

Total weighted-average basic common shares outstanding	27,078,048		29,212,301		27,555,197		29,731,797
Effect of dilutive securities(1)

Performance share units	91,521		12,061		77,540		17,035

Total effect of dilutive securities	91,521		12,061		77,540		17,035
Total weighted-average diluted common shares outstanding	27,169,569		29,224,362		27,632,737		29,748,832

Net earnings per common share:
Basic earnings per common share	$	1.99	$	1.66	$	2.95	$	3.66
Diluted earnings per common share(2)	$	1.99	$	1.66	$	2.95	$	3.66

(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 three months ended March 31, 2023 and 2022, respectively, were 422,461 and 491,621 weighted average shares of nonvested restricted stock because their inclusion would be anti-dilutive. Excluded from the computation of diluted earnings per share for the six months ended March 31, 2023 and 2022, respectively, were 417,012 and 484,457 weighted average shares of nonvested restricted stock because their inclusion would be anti-dilutive.