OUTSTANDING SHARES AND EARNINGS PER SHARE

9 Months Ended

Sep. 30, 2013

OUTSTANDING SHARES AND EARNINGS PER SHARE [Abstract]

OUTSTANDING SHARES AND EARNINGS PER SHARE

4.           OUTSTANDING SHARES AND EARNINGS PER SHARE

On January 24, 2013, the Board of Directors of the Company declared a 2% stock dividend payable as of March 29, 2013.  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 respective period.  Quarter-to-date diluted EPS is computed by dividing net income available to common shareholders by the weighted average number of shares outstanding plus dilutive shares for the quarter.  Year-to-date diluted EPS is computed by dividing net income available to common shareholders by the weighted average number of shares outstanding plus average dilutive shares year-to-date.  Diluted shares include 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 the Company.

The following table presents a reconciliation of basic and diluted EPS for the three-month and nine-month periods ended September 30, 2013 and 2012.

($ in thousands)	Three months ended						Nine months ended
	September 30,						September 30,
	2013			2012			2013			2012
Basic earnings per share:
Net income	$	1,373		$	1,204		$	4,178		$	3,503
Preferred stock dividend	$	(162	)	$	(286	)	$	(534	)	$	(857	)
Net income available to common shareholders	$	1,211		$	918		$	3,644		$	2,646
Weighted average common shares outstanding		9,418,268			9,385,824			9,413,212			9,383,038
Basic EPS	$	0.13		$	0.10		$	0.39		$	0.28
Diluted earnings per share:
Net income	$	1,373		$	1,204		$	4,178		$	3,503
Preferred stock dividend	$	(162	)	$	(286	)	$	(534	)	$	(857	)
Net income available to common shareholders	$	1,211		$	918		$	3,644		$	2,646
Weighted average common shares outstanding		9,418,268			9,385,824			9,413,212			9,383,038
Effect of dilutive shares		37,730			25,827			33,881			25,754
Adjusted weighted average common shares outstanding		9,455,998			9,411,651			9,447,093			9,408,792
Diluted EPS	$	0.13		$	0.10		$	0.39		$	0.28

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 301,793 shares and 356,805 shares for the three-month periods ended September 30, 2013 and 2012, 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 313,543 shares and 354,478 shares for the nine-month periods ended September 30, 2013 and 2012, respectively.  There were no non-vested shares of restricted stock not included in the computation of diluted earnings per share because they would have an anti-dilutive effect for the three-month periods ended September 30, 2013 and 2012.  Non-vested shares of restricted stock that were not included in the computation of diluted earnings per share because they would have had an anti-dilutive effect amounted to 2,769 shares and zero shares for the nine-month periods ended September 30, 2013 and 2012, respectively.