OUTSTANDING SHARES AND EARNINGS PER SHARE

3 Months Ended

Mar. 31, 2014

OUTSTANDING SHARES AND EARNINGS PER SHARE [Abstract]

OUTSTANDING SHARES AND EARNINGS PER SHARE

4.           OUTSTANDING SHARES AND EARNINGS PER SHARE

On January 23, 2014, the Board of Directors of the Company declared a 3% stock dividend payable as of March 31, 2014.  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 period ended March 31, 2014 and 2013.

	Three months ended
	March 31,
	2014			2013
Basic earnings per share:
Net income	$	1,364		$	1,363
Preferred stock dividend	$	(32	)	$	(212	)
Net income available to common stockholders	$	1,332		$	1,151
Weighted average common shares outstanding		9,716,072			9,688,681
Basic EPS	$	0.14		$	0.12
Diluted earnings per share:
Net income	$	1,364		$	1,363
Preferred stock dividend	$	(32	)	$	(212	)
Net income available to common stockholders	$	1,332		$	1,151
Weighted average common shares outstanding		9,716,072			9,688,681
Effect of dilutive shares		50,848			31,640
Adjusted weighted average common shares outstanding		9,766,920			9,720,321
Diluted EPS	$	0.14		$	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 244,101 shares and 331,654 shares for the three-month periods ended March 31, 2014 and 2013, respectively.  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 24,890 shares and 8,650 for the three-month periods ended March 31, 2014 and 2013, respectively.