OUTSTANDING SHARES AND EARNINGS PER SHARE

9 Months Ended

Sep. 30, 2021

OUTSTANDING SHARES AND EARNINGS PER SHARE [Abstract]

OUTSTANDING SHARES AND EARNINGS PER SHARE

10.  OUTSTANDING SHARES AND EARNINGS PER SHARE

On January 27, 2021, the Board of Directors of the Company declared a 5% stock dividend payable March 25, 2021 to shareholders of record as of February 26, 2021. 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 nine months ended September 30, 2021 and 2020 (dollars in thousands except per share amounts):

	Three months ended September 30,				Nine months ended September 30,
	2021		2020		2021		2020
Basic earnings per share:
Net income	$	4,509	$	3,425	$	10,993	$	8,809
Weighted average common shares outstanding		13,363,515		13,470,856		13,460,418		13,459,813
Basic EPS	$	0.34	$	0.25	$	0.82	$	0.65
Diluted earnings per share:
Net income	$	4,509	$	3,425	$	10,993	$	8,809
Weighted average common shares outstanding		13,363,515		13,470,856		13,460,418		13,459,813
Effect of dilutive shares		179,634		98,670		169,870		116,579
Adjusted weighted average common shares outstanding		13,543,149		13,569,526		13,630,288		13,576,392
Diluted EPS	$	0.33	$	0.25	$	0.81	$	0.65

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 255,190 shares and 424,475 shares for the three months ended September 30, 2021 and 2020, respectively. Unvested restricted stock which were not included in the computation of diluted earnings per share because they would have had an anti-dilutive effect amounted to 0 shares and 44,137 shares for the three months ended September 30, 2021 and 2020, 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 275,023 shares and 424,475 shares for the nine months ended September 30, 2021 and 2020, respectively. Unvested restricted stock which were not included in the computation of diluted earnings per share because they would have had an anti-dilutive effect amounted to 13,292 shares and 44,137 shares for the nine months ended September 30, 2021 and 2020, respectively.