Sound Financial Bancorp, Inc. Earnings Per Share Disclosure
| Year Ended December 31, | |||||||||||
| 2024 | 2023 | ||||||||||
| Net income | $ | 4,640 | $ | 7,439 | |||||||
| LESS: Participating dividends - Unvested RSAs | (13) | (12) | |||||||||
| LESS: Income allocated to participating securities - Unvested RSAs | (18) | (35) | |||||||||
| Net income available to common stockholders - basic | 4,609 | 7,392 | |||||||||
| ADD BACK: Income allocated to participating securities - Unvested RSAs | 18 | 35 | |||||||||
| LESS: Income reallocated to participating securities - Unvested RSAs | (18) | (35) | |||||||||
| Net income available to common stockholders - diluted | $ | 4,609 | $ | 7,392 | |||||||
| Weighted average number of shares outstanding, basic | 2,542,805 | 2,562,182 | |||||||||
| Effect of potentially dilutive common shares | 23,133 | 19,520 | |||||||||
| Weighted average number of shares outstanding, diluted | 2,565,938 | 2,581,702 | |||||||||
| Earnings per share, basic | $ | 1.81 | $ | 2.88 | |||||||
| Earnings per share, diluted | $ | 1.80 | $ | 2.86 | |||||||
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.