EARNINGS PER SHARE COMPUTATION

3 Months Ended

Mar. 31, 2014

EARNINGS PER SHARE COMPUTATION

EARNINGS PER SHARE COMPUTATION

4. EARNINGS PER SHARE COMPUTATION

Basic earnings per share is computed by dividing net income by the weighted average common shares outstanding for the period (8,321,448 shares and 9,209,719 shares for the three-month periods ended March 31, 2014 and 2013, respectively). Diluted earnings per share reflect the potential dilution that could occur if securities or other contracts to issue common stock, such as stock options or restricted stock, result in the issuance of common stock. Diluted earnings per share is computed by dividing net income by the weighted average common shares outstanding for the period plus the dilutive effect of stock based awards (20,395 shares for the three-month period ended March 31, 2014 and 10,898 shares for the three-month period ended March 31, 2013). For the three-month periods ended March 31, 2014 and 2013, there were 217,247 and 278,850 stock options, respectively, that were excluded from the calculation as they were considered antidilutive. Earnings per share is retroactively adjusted for stock dividends and stock splits, if applicable, for all periods presented.