SR Bancorp, Inc. Earnings Per Share Disclosure
Basic earnings (loss) per share represents income available to common stockholders divided by the weighted-average number of common shares outstanding. Diluted earnings per share have been calculated in a manner similar to that of basic earnings per share except that weighted-average number of common shares outstanding is increased to include the number of additional common shares that would have been outstanding if all potential dilutive common shares (such as those resulting from the exercise of stock options and vested restricted stock awards) were issued during the period, computed using the treasury stock method. Unallocated ESOP shares are not deemed outstanding for earnings per share calculations.
The following table presents the composition of the weighted average common shares used in the earnings per share calculation:
|
|
Year Ended June 30, |
|
|||||
|
|
2025 |
|
|
2024 |
|
||
Net income (loss) |
|
$ |
5,136 |
|
|
$ |
(10,860 |
) |
Weighted average number of common shares outstanding |
|
|
9,261,575 |
|
|
|
7,403,716 |
|
Less: Average unallocated ESOP shares |
|
|
(684,570 |
) |
|
|
(570,086 |
) |
Less: Average unvested restricted stock awards |
|
|
(145,063 |
) |
|
|
— |
|
Weighted average common shares outstanding used to calculate basic |
|
|
8,431,942 |
|
|
|
6,833,630 |
|
Add: Dilutive effect of common stock equivalents |
|
|
12,413 |
|
|
|
— |
|
Weighted average common shares outstanding used to calculate diluted |
|
|
8,444,355 |
|
|
|
6,833,630 |
|
Basic income (loss) per common share |
|
$ |
0.61 |
|
|
$ |
(1.59 |
) |
Diluted income (loss) per common share |
|
$ |
0.61 |
|
|
$ |
(1.59 |
) |
Number of common stock equivalents excluded from the calculation of |
|
|
760,593 |
|
|
|
— |
|
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.