EARNINGS PER COMMON SHARE ("EPS")

3 Months Ended

Dec. 31, 2023

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 two-class method or the treasury stock 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 upon vesting of restricted stock grants and after 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 December 31,
(Dollars in thousands, except per share data)		2023		2022
Basic income per common share:
Net income attributable to Pathward Financial, Inc.		$	27,657	$	27,842
Dividends and undistributed earnings allocated to participating securities		(220)		(403)
Basic net earnings available to common stockholders		27,437		27,439
Undistributed earnings allocated to nonvested restricted stockholders		210		383
Reallocation of undistributed earnings to nonvested restricted stockholders		(210)		(382)


Diluted net earnings available to common stockholders		$	27,437	$	27,440

Total weighted-average basic common shares outstanding		25,776,845		28,024,541
Effect of dilutive securities(1)

Performance share units		24,693		62,282

Total effect of dilutive securities		24,693		62,282
Total weighted-average diluted common shares outstanding		25,801,538		28,086,823

Net earnings per common share:
Basic earnings per common share		$	1.06	$	0.98
Diluted earnings per common share(2)		$	1.06	$	0.98

(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 December 31, 2023 and 2022, respectively, were 207,074 and 411,794 weighted average shares of nonvested restricted stock because their inclusion would be anti-dilutive.