Note 6 - Earnings Per Share

9 Months Ended

Sep. 30, 2024

Notes to Financial Statements

Earnings Per Share [Text Block]

6. Earnings per share

Basic earnings per share (EPS) is computed by dividing net income available to common shareholders by the weighted-average number of common shares outstanding for the period. Diluted EPS is computed in the same manner as basic EPS but also reflects the potential dilution that could occur from the grant of stock-based compensation awards. The Company maintains one active share-based compensation plan that may generate additional potentially dilutive common shares. For granted and unexercised stock-settled stock appreciation rights (SSARs), dilution would occur if Company-issued SSARs were exercised and converted into common stock. As of the three and nine months ended September 30, 2024, there were 9,236 and 9,017 potentially dilutive shares related to issued and unexercised SSARs compared to 11,297 and 16,469 for the same 2023 periods, respectively. The calculation did not include 46,423 weighted average unexercised SSARs that could potentially dilute earnings per share but their effect was antidilutive as of the three and nine months ended  September 30, 2024. For restricted stock, dilution would occur from the Company’s previously granted but unvested shares. There were 31,352 and 27,775 potentially dilutive shares related to unvested restricted share grants as of the three and nine months ended September 30, 2024 compared to 26,406 and 21,094 for the same 2023 periods, respectively. 

In the computation of diluted EPS, the Company uses the treasury stock method to determine the dilutive effect of its granted but unexercised SSARs and unvested restricted stock. Under the treasury stock method, the assumed proceeds, as defined, received from shares issued in a hypothetical stock option exercise or restricted stock grant, are assumed to be used to purchase treasury stock. Proceeds include amounts received from the exercise of outstanding stock options and compensation cost for future service that the Company has not yet recognized in earnings. The Company does not consider awards from share-based grants in the computation of basic EPS.

The following table illustrates the data used in computing basic and diluted EPS for the periods indicated:

	Three months ended September 30,				Nine months ended September 30,
	2024		2023		2024		2023
(dollars in thousands except per share data)
Basic EPS:
Net income available to common shareholders	$	4,967	$	5,340	$	14,960	$	17,742
Weighted-average common shares outstanding		5,735,926		5,687,553		5,731,313		5,669,454
Basic EPS	$	0.87	$	0.94	$	2.61	$	3.13
Diluted EPS:
Net income available to common shareholders	$	4,967	$	5,340	$	14,960	$	17,742
Weighted-average common shares outstanding		5,735,926		5,687,553		5,731,313		5,669,454
Potentially dilutive common shares		40,588		37,703		36,792		37,563
Weighted-average common and potentially dilutive shares outstanding		5,776,514		5,725,256		5,768,105		5,707,017
Diluted EPS	$	0.86	$	0.93	$	2.59	$	3.11