Earnings per share

6 Months Ended

Jun. 30, 2011

Earnings per share

Earnings per share

(5) Earnings per share

Basic earnings per share are calculated by dividing net income by the weighted average number of common shares outstanding during the period.  Diluted earnings per share reflects the effect on weighted average shares outstanding of the number of additional shares outstanding if dilutive stock options were converted into common stock using the treasury stock method.

The table below presents the increase in average shares outstanding, using the treasury stock method, for the diluted earnings per share calculation and the effect of those shares on earnings, for the periods indicated:

	Three months ended June 30,					Six months ended June 30,
	2011			2010		2011		2010
Basic weighted average common shares outstanding	9,401,932			9,219,171		9,360,458		9,172,194
Dilutive shares	95,367			4,794		66,175		4,540
Diluted weighted average common shares outstanding	9,497,299			9,223,965		9,426,633		9,176,734
Basic earnings per share	$	0.29		$	0.28	$	0.55	$	0.60
Effect of dilutive shares	(0.01		)	—		—		—
Diluted earnings per share	$	0.28		$	0.28	$	0.55	$	0.60

For the six months ended June 30, 2011, there was an additional 133,669 average stock options outstanding, which were excluded from the year-to-date calculation of diluted earnings per share due to the exercise price of these options exceeding the average market price of the Company’s common stock for the period.  These options, which were not dilutive at that date, may potentially dilute earnings per share in the future.