Earnings Per Share

6 Months Ended

Jun. 30, 2013

Earnings Per Share

Earnings Per Share

2) Earnings Per Share

        Basic earnings per common share is computed by dividing net income, less dividends and discount accretion on preferred stock, by the weighted average common shares outstanding. On June 21, 2010, the Company issued to various institutional investors 21,004 shares of Series C Convertible Perpetual Preferred Stock ("Series C Preferred Stock"). The Series C Preferred Stock is convertible into 5,601,000 shares of common stock when transferred in accordance with its terms. The Series C Preferred Stock participate in the earnings of the Company and, therefore, the shares issued on the conversion of the Series C Preferred Stock are considered outstanding under the two-class method of computing basic earnings per common share during periods of earnings. Diluted earnings per share reflect potential dilution from outstanding stock options and common stock warrant, using the treasury stock method. The common stock warrant was antidilutive for the six months ended June 30, 2013 and for the three months and six months ended June 30, 2012. The Company repurchased the warrant for $140,000 in the second quarter of 2013. A reconciliation of these factors used in computing basic and diluted earnings per common share is as follows:

	For the Three Months Ended June 30,				For the Six Months Ended June 30,
	2013		2012		2013		2012
	(Dollars in thousands)
Net income available to common shareholders	$	2,793	$	2,679	$	4,973	$	3,548
Less: net income allocated to Series C Preferred Stock		489		470		871		623
Net income allocated to common shareholders	$	2,304	$	2,209	$	4,102	$	2,925
Weighted average common shares outstanding for basic earnings per common share		26,336,244		26,290,480		26,332,793		26,289,907
Dilutive effect of stock options oustanding, using the the treasury stock method		35,648		27,011		46,123		28,058
Shares used in computing diluted earnings per common share		26,371,892		26,317,491		26,378,916		26,317,965
Basic earnings per share	$	0.09	$	0.08	$	0.16	$	0.11
Diluted earnings per share	$	0.09	$	0.08	$	0.16	$	0.11