OUTSTANDING SHARES AND EARNINGS PER SHARE

6 Months Ended

Jun. 30, 2016

OUTSTANDING SHARES AND EARNINGS PER SHARE [Abstract]

OUTSTANDING SHARES AND EARNINGS PER SHARE

4. OUTSTANDING SHARES AND EARNINGS PER SHARE

On January 28, 2016, the Board of Directors of the Company declared a 4% stock dividend payable as of March 31, 2016.  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.  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.  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 and six months ended June 30, 2016 and 2015 (dollars in thousands except per share amounts):

	Three months ended June 30,					Six months ended June 30,
	2016		2015			2016		2015
Basic earnings per share:
Net income	$	2,035	$	1,770		$	3,766	$	3,287
Preferred stock dividend	$	—	$	(32	)	$	—	$	(64	)
Net income available to common stockholders	$	2,035	$	1,738		$	3,766	$	3,223
Weighted average common shares outstanding		10,607,758		10,577,895			10,601,022		10,560,197
Basic EPS	$	0.19	$	0.16		$	0.36	$	0.31
Diluted earnings per share:
Net income	$	2,035	$	1,770		$	3,766	$	3,287
Preferred stock dividend	$	—	$	(32	)	$	—	$	(64	)
Net income available to common stockholders	$	2,035	$	1,738		$	3,766	$	3,223
Weighted average common shares outstanding		10,607,758		10,577,895			10,601,022		10,560,197
Effect of dilutive shares		67,602		52,332			67,368		58,164
Adjusted weighted average common shares outstanding		10,675,360		10,630,227			10,668,390		10,618,361
Diluted EPS	$	0.19	$	0.16		$	0.35	$	0.30

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 163,010 shares and 170,894 shares for the three months ended June 30, 2016 and 2015, 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 163,010 shares and 180,779 shares for the six months ended June 30, 2016 and 2015, respectively.