Net Income Per Common Share

Basic net income per common share is calculated by dividing net income by the weighted average number of common shares outstanding during each period. Diluted net income per common share is calculated by dividing net income by the weighted average number of common shares outstanding, as adjusted for the assumed exercise of dilutive common stock warrants and common stock options using the treasury stock method.

Awards of restricted shares are included in outstanding shares when granted. Unvested restricted shares are entitled to non-forfeitable dividends and participate in undistributed earnings with common shares. Awards of this nature are considered participating securities and basic and diluted earnings per share are computed under the two-class method.

Dilutive securities in the tables below exclude common stock options and warrants with exercise prices that exceed the average market price of the Company’s common stock during the periods presented. Inclusion of these common stock options and warrants would be anti-dilutive to the diluted earnings per common share calculation. For the three and six months ended June 30, 2018 and 2017, no options and 9,500 options, respectively, were anti-dilutive and were not included in the computation of diluted earnings per common share.

The following table illustrates the calculation of both basic and diluted earnings per share for the three and six months ended June 30, 2018 and 2017:



	Three Months Ended June 30,				Six Months Ended June 30,
(Dollars in thousands, except per share data)	2018		2017		2018		2017

Net income	$	1,871	$	1,919	$	4,724	$	3,868

Basic weighted average shares outstanding	8,341,459		8,033,299		8,227,109		8,029,690
Plus: common stock equivalents	286,646		268,640		279,852		271,741
Diluted weighted average shares outstanding	8,628,105		8,301,939		8,506,961		8,301,431
Earnings per share:
Basic	$	0.22	$	0.24	$	0.57	$	0.48
Diluted	$	0.22	$	0.23	$	0.56	$	0.47