OUTSTANDING SHARES AND EARNINGS PER SHARE

6 Months Ended

Jun. 30, 2012

OUTSTANDING SHARES AND EARNINGS PER SHARE [Abstract]

OUTSTANDING SHARES AND EARNINGS PER SHARE

4.           OUTSTANDING SHARES AND EARNINGS PER SHARE

On January 26, 2012, the Board of Directors of the Company declared a 1% stock dividend payable as of March 30, 2012.  All income per share amounts have been adjusted to give retroactive effect to stock dividends.

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, 2012 and 2011.

	Three months ended						Six months ended
	June 30,						June 30,
	2012			2011			2012			2011
Basic earnings per share:
Net income	$	1,207		$	795		$	2,299		$	1,561
Preferred stock dividend and accretion	$	(286	)	$	(251	)	$	(571	)	$	(500	)
Net income available to common shareholders	$	921		$	544		$	1,728		$	1,061
Weighted average common shares outstanding		9,201,668			9,161,336			9,197,489			9,154,757
Basic EPS	$	0.10		$	0.06		$	0.19		$	0.12
Diluted earnings per share:
Net income	$	1,207		$	795		$	2,299		$	1,561
Preferred stock dividend and accretion	$	(286	)	$	(251	)	$	(571	)	$	(500	)
Net income available to common shareholders	$	921		$	544		$	1,728		$	1,061
Weighted average common shares outstanding		9,201,668			9,161,336			9,197,489			9,154,757
Effect of dilutive shares		24,000			1,141			25,213			1,756
Adjusted weighted average common shares outstanding		9,225,668			9,162,477			9,222,702			9,156,513
Diluted EPS	$	0.10		$	0.06		$	0.19		$	0.12

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 349,809 shares and 399,230 shares for the three months ended June 30, 2012 and 2011, respectively.  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 346,380 shares and 407,045 shares for the six months ended June 30, 2012 and 2011, respectively.  There were no non-vested shares of restricted stock not included in th ecomputation of diluted earnings per share because they would have an anti-dilutive effect for the three-month and six-month periods ended June 30, 2012.  Non-vested shares of restricted stock not included in the computation of diluted earnings per share because they would have an anti-dilutive effect amounted to 45,570 shares for the three-month and six-month periods ended June 30, 2011.  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 the three-month and six-month periods ended June 30, 2011 because they would have had an anti-dilutive effect.