Earnings Per Common Share

9 Months Ended

Sep. 30, 2020

Basic earnings per common share is calculated by dividing net income by the weighted average number of common shares outstanding during each period. Diluted earnings 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 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 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 would be anti-dilutive to the diluted earnings per common share calculation. For the three months ended September 30, 2020 and 2019, 54,930 and 27,930 options, respectively, were anti-dilutive and were not included in the computation of diluted earnings per share. For the nine months ended September 30, 2020 and 2019, 41,430 and 27,930 options, respectively, were anti-dilutive and were not included in the computation of diluted earnings per share.

The following table illustrates the calculation of both basic and diluted earnings per share for the three and nine months ended September 30, 2020 and 2019:


	Three Months Ended September 30,				Nine Months Ended September 30,
(Dollars in thousands, except per share data)	2020		2019		2020		2019

Net income	$	4,910	$	3,623	$	12,021	$	10,390

Basic weighted average shares outstanding	10,230,488		8,666,251		10,213,601		8,641,684
Plus: common stock equivalents	38,463		56,098		46,876		57,275
Diluted weighted average shares outstanding	10,268,951		8,722,349		10,260,477		8,698,959
Earnings per share:
Basic	$	0.48	$	0.42	1.18		1.20
Diluted	$	0.48	$	0.42	1.17		1.19