OUTSTANDING SHARES AND EARNINGS PER SHARE

6 Months Ended

Jun. 30, 2011

OUTSTANDING SHARES AND EARNINGS PER SHARE [Abstract]

OUTSTANDING SHARES AND EARNINGS PER SHARE

4.           OUTSTANDING SHARES AND EARNINGS PER SHARE

Earnings Per Share (EPS)

Basic EPS includes no dilution and is computed by dividing net income available to common shareholders by the weighted average number of common shares outstanding for the period.  Diluted EPS includes all common stock equivalents (“in-the-money” stock options, unvested restricted stock, stock units, warrants and rights, convertible bonds and preferred stock), which reflects the potential dilution of securities that could share in the earnings of an entity.

The following table presents a reconciliation of basic and diluted EPS for the three-month and six-month periods ended June 30, 2011 and 2010.

	Three months ended						Six months ended
	June 30,						June 30,
	2011			2010			2011			2010
Basic earnings per share:
Net income	$	795		$	599		$	1,561		$	960
Preferred stock dividend and accretion	$	(251	)	$	(249	)	$	(500	)	$	(495	)
Net income available to common shareholders	$	544		$	350		$	1,061		$	465
Weighted average common shares outstanding		9,070,746			9,020,354			9,064,167			9,014,661
Basic EPS	$	0.06		$	0.04		$	0.12		$	0.05
Diluted earnings per share:
Net income	$	795		$	599		$	1,561		$	960
Preferred stock dividend and accretion	$	(251	)	$	(249	)	$	(500	)	$	(495	)
Net income available to common shareholders	$	544		$	350		$	1,061		$	465
Weighted average common shares outstanding		9,070,746			9,020,354			9,064,167			9,014,661
Effect of dilutive options		1,130			3,525			1,739			2,148
Adjusted weighted average common shares outstanding		9,071,876			9,023,879			9,065,906			9,016,809
Diluted EPS	$	0.06		$	0.04		$	0.12		$	0.05

Stock options which were not included in the computation of diluted earnings per share because they would have had an anti-dilutive effect amounted to 395,277 and 499,687 for the three months ended June 30, 2011 and 2010 respectively.  In addition, warrants for 352,977 shares issued to the U.S. Treasury were not used in the computation of diluted earnings per share for both periods because they would have had an anti-dilutive effect.

Stock options which were not included in the computation of diluted earnings per share because they would have had an anti-dilutive effect amounted to 403,015 and 499,687 for the six months ended June 30, 2011 and 2010 respectively.  In addition, warrants for 352,977 shares issued to the U.S. Treasury were not used in the computation of diluted earnings per share for both periods because they would have had an anti-dilutive effect.