Net Income Per Common Share ("EPS")

9 Months Ended

Mar. 31, 2015

3. NET INCOME PER COMMON SHARE (“EPS”)

Basic EPS is based on the weighted average number of common shares actually outstanding including restricted stock awards (see following paragraph) adjusted for Employee Stock Ownership Plan (“ESOP”) shares not yet committed to be released. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock, such as outstanding stock options, were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the Company. Diluted EPS is calculated by adjusting the weighted average number of shares of common stock outstanding to include the effect of contracts or securities exercisable or which could be converted into common stock, if dilutive, using the treasury stock method. Shares issued and reacquired during any period are weighted for the portion of the period they were outstanding.

The Financial Accounting Standards Board (“FASB”) has issued guidance on determining whether instruments granted in share-based payment transactions are participating securities. This guidance clarifies that all outstanding unvested share-based payment awards that contain rights to non-forfeitable dividends participate in undistributed earnings with common shareholders. Awards of this nature are considered participating securities and the two-class method of computing basic and diluted earnings per share must be applied.

The following is a reconciliation of the numerators and denominators of the basic and diluted earnings per share computations:

	Three Months Ended March 31, 2015						Nine Months Ended March 31, 2015
	Income (Numerator)		Shares (Denominator)		Per Share Amount		Income (Numerator)		Shares (Denominator)		Per Share Amount
	(In Thousands, Except Per Share Data)						(In Thousands, Except Per Share Data)
Net income	$	3,878					$	8,970
Basic earnings per share, income available to common stockholders	$	3,878		67,078	$	0.06	$	8,970		67,032	$	0.13
Effect of dilutive securities:
Stock options		-		14				-		114
	$	3,878		67,092	$	0.06	$	8,970		67,146	$	0.13

	Three Months Ended March 31, 2014						Nine Months Ended March 31, 2014
	Income (Numerator)		Shares (Denominator)		Per Share Amount		Income (Numerator)		Shares (Denominator)		Per Share Amount
	(In Thousands, Except Per Share Data)						(In Thousands, Except Per Share Data)
Net income	$	1,786					$	7,359
Basic earnings per share, income available to common stockholders	$	1,786		65,684	$	0.03	$	7,359		65,797	$	0.11
Effect of dilutive securities:
Stock options		-		98				-		32
	$	1,786		65,782	$	0.03	$	7,359		65,829	$	0.11

During the three and nine months ended March 31, 2015, the average number of options which were considered anti-dilutive totaled approximately 162,333 and 177,555, respectively. During the three and nine months ended March 31, 2014, the average number of options which were considered anti-dilutive totaled approximately 1,915,850 and 1,964,126, respectively.

- Definition

The entire disclosure for earnings per share.

+ References+ Details

Kearny Financial Corp. 10-Q