Earnings Per Share

3 Months Ended

Mar. 31, 2013

Earnings Per Share

Earnings Per Share

2.             Earnings Per Share

Basic net earnings per share is computed by dividing net earnings applicable to common shareholders by the weighted average number of common shares outstanding during the period.  Diluted net earnings per share is determined using the weighted average number of common shares outstanding during the period, adjusted for the dilutive effect of common stock equivalents, consisting of shares that might be issued upon exercise of common stock options or warrants and vesting of restricted stock.  Common stock equivalents are included in the diluted net earnings per share calculation to the extent these shares are dilutive.  A reconciliation of the numerator and denominator used in the calculation of basic and diluted net earnings per share available to common shareholders is as follows:

Earnings per share calculation

	Three months ended
(dollars in thousands,	March 31,
except per share amounts)	2013		2012
Net income	$	3,421	$	2,707
Weighted average shares:
Basic common shares	14,411,008		14,363,541
Diluted potential common shares related to stock options, restricted stock, and preferred stock	657,923		435,182
Total average common equivalent shares	15,068,931		14,798,723
Basic earnings per share	$	0.24	$	0.19
Diluted earnings per share	$	0.23	$	0.18

There were 204,979 options to acquire common stock (including those issuable pursuant to contingent stock agreements) that could potentially dilute basic earnings per share in the future that were not included in the computation of diluted earnings per share for the three months ended March 31, 2013, because to do so would have been anti-dilutive.