Earnings Per Common Share

9 Months Ended

Sep. 30, 2016

Earnings per Common Share

Basic earnings per common share is calculated by dividing net income available to common shareholders by the weighted average number of common shares outstanding during the period. Diluted earnings per common share is adjusted for the dilutive effects of stock options, warrants, and restricted stock. The diluted average number of common shares outstanding has been increased for the assumed exercise of stock options and warrants with proceeds used to purchase treasury shares at the average market price for the period. The computations are as follows for the three and nine months ended September 30, 2016 and 2015 (dollars in thousands, except share and per share data):



	For the Three Months Ended September 30,			For the Nine Months Ended September 30,
	2016		2015	2016		2015
Net income	$	2,896	2,633	$	8,828	8,590
Weighted average number of shares outstanding used in the calculation of basic earnings per common share	9,962,571		9,898,233	9,930,182		9,637,344
Add dilutive effect of:
Stock options	10,052		16,219	15,360		17,199
Stock warrants	—		91,336	22,093		88,296
Restricted shares	4,969		—	6,684		—
Adjusted weighted average number of shares outstanding used in the calculation of diluted earnings per common share	9,977,592		10,005,788	9,974,319		9,742,839
Earnings per common share:
Basic	$	0.29	0.26	$	0.89	0.89
Diluted	0.29		0.26	0.88		0.88

Options to purchase 2,516 and 12,962 shares of common stock at a weighted average price of $17.88 and $18.41 per share were outstanding at September 30, 2016 and 2015, respectively, but were not included in the computation of diluted earnings per common share because the exercise prices of the options were greater than the average market price of the common shares.