Pursuant to the Earnings Per Share Topic of the FASB ASC, unvested share-based payment awards that contain nonforfeitable rights to dividends or dividend equivalents (whether paid or unpaid) are participating securities and are included in the computation of EPS using the two-class method.

Basic EPS is computed by dividing net income available to common stockholders by the weighted average number of common shares outstanding for the period using the two-class method, which includes our unvested restricted stock awards as participating securities. Diluted EPS is computed based on the weighted average number of common shares outstanding for the period using the two-class method, which includes our unvested restricted stock awards as participating securities, and the dilutive impact of the exercise or conversion of common stock equivalents, such as stock options, into shares of common stock as if those securities were exercised or converted.

The following table provides net income and shares used in computing basic and diluted EPS:

			Three Months Ended June 30,				Six Months Ended June 30,
			2011		2010		2011		2010

			(Dollars in thousands, except per-share data)

Net income			$	1,530	$	1,551	$	2,284	$	2,788

Weighted average common shares outstanding				11,979,787		11,899,847		11,957,281		11,854,044
	Add: Unvested restricted stock awards considered participating
		securities		1,009,894		932,945		1,000,271		948,535
Adjusted weighted average common shares used in computing
		basic EPS		12,989,681		12,832,792		12,957,552		12,802,579
	Add: Effect of dilutive stock options			75,525		71,371		76,323		63,278
Adjusted weighted average common shares used in computing
		diluted EPS		13,065,206		12,904,163		13,033,875		12,865,857

Net earnings per common share:
	Basic		$	0.12	$	0.12	$	0.18	$	0.22
	Diluted		$	0.12	$	0.12	$	0.18	$	0.22

For the three-month periods ended June 30, 2011 and June 30, 2010, options to purchase 323,585 and 381,378 shares of common stock were not considered in the computation of potential common shares for purposes of diluted EPS, since the exercise prices of the options were greater than the average market price of the Company's common stock for the respective periods.

For the six-month periods ended June 30, 2011 and June 30, 2010, options to purchase 343,752 and 428,405 shares of common stock were not considered in the computation of potential common shares for purposes of diluted EPS, since the exercise prices of the options were greater than the average market price of the Company's common stock for the respective periods.