NORWOOD FINANCIAL CORP Earnings Per Share Disclosure
The following table sets forth the computations of basic and diluted earnings per share:
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| Years Ended December 31, | ||||
| 2024 |
| 2023 | ||
| (In Thousands, Except Per Share Data) | ||||
Numerator, net (loss) income | $ | (160) |
| $ | 16,759 |
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Denominator: |
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Weighted average shares outstanding |
| 8,137 |
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| 8,105 |
Less: Weighted average unvested restricted shares |
| (44) |
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| (43) |
Denominator: Basic earnings per share |
| 8,093 |
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| 8,062 |
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Weighted average shares outstanding, basic |
| 8,093 |
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| 8,062 |
Add: Dilutive effect of stock options and restricted stock |
| — |
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| 22 |
Denominator: Diluted earnings per share |
| 8,093 |
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| 8,084 |
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Basic (loss) earnings per common share | $ | (0.02) |
| $ | 2.08 |
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Diluted (loss) earnings per common share | $ | (0.02) |
| $ | 2.07 |
Stock options which had no intrinsic value because their effect would be anti-dilutive, and therefore would not be included in the diluted EPS calculation, were 161,000 and 56,000 for the years ended December 31, 2024 and 2023, respectively, based on the closing price of the Company’s common stock which was $27.21 and $32.91 as of December 31, 2024 and 2023, respectively.
About Earnings Per Share Disclosures
The earnings per share disclosure breaks down the calculation from net income to both basic and diluted EPS, revealing the full impact of a company's capital structure on per-share economics. The reconciliation between basic and diluted share counts exposes how many stock options, RSUs, convertible securities, and warrants are potentially dilutive to existing shareholders.
Key signals: a widening gap between basic and diluted shares indicates growing dilution from equity compensation or convertible instruments. Anti-dilutive securities excluded from the diluted calculation deserve attention — they represent latent dilution that will materialize if the stock price rises. Watch for the effect of share buybacks on per-share metrics: EPS growth driven primarily by repurchases rather than income growth signals weakening fundamentals. Compare year-over-year changes in the diluted share count against equity compensation expense to assess whether management is effectively managing dilution.