INCOME PER COMMON SHARE

12 Months Ended

Dec. 31, 2012

Income Per Common Share

INCOME PER COMMON SHARE

13. Income Per Common Share

Basic earnings per share are computed by dividing net income by the weighted-average number of common shares outstanding. Diluted earnings per share are computed by dividing net income by the weighted-average number of common shares and potential common shares outstanding. Potential common shares consist of dilutive stock options determined using the treasury stock method and the average market price of common stock. All share and per share data have been retroactively restated for all common stock dividends and distributions including the 10% stock dividend declared on August 26, 2010.

Options to purchase 34,675 shares of common stock and options to purchase 159,675 shares of common stock with prices ranging from $11.67 to $15.11 and $10.42 to $15.11 per share were not included in the computation of diluted earnings per share for 2012 or 2011, respectively, because the options’ exercise price was greater than the average market price of common shares.

The following is a summary of the reconciliation of average shares outstanding for the years ended December 31:

	2012				2011				2010
	Basic		Diluted		Basic		Diluted		Basic		Diluted
Weighted average shares outstanding		4,445,738		4,445,738		4,439,887		4,439,887		4,416,065		4,416,065
Effect of dilutive securities:
Stock options		—		—		—		—		—		—
Average shares outstanding		4,445,738		4,445,738		4,439,887		4,439,887		4,416,065		4,416,065