EARNINGS PER SHARE

Beginning in the second quarter of 2019, the Company has elected to prospectively use the two-class method in calculating earnings per share due to the unvested restricted stock awards qualifying as participating securities. The two-class method is used in the calculation of basic and diluted earnings per share. Under the two-class method, earnings available to common shareholders for the period are allocated between common shareholders and participating securities according to dividends declared (or accumulated) and participating rights in undistributed earnings.

Average shares of common stock for diluted net income per common share include shares to be issued upon the exercise of stock options granted under the Company's share-based compensation plans and restricted stock awards.

The calculation of basic and diluted earnings per share using the two-class method for the period noted below was as follows:



(In thousands, except per share data)	For the three months ended March 31, 2020
Net income	$	4,110
Net income allocated to participating securities	47
Net income allocated to common shareholders ⁽¹⁾	$	4,063
Weighted average common shares - issued	7,726
Average unvested restricted share awards	(89		)
Weighted average common shares outstanding - basic	7,637
Effect of dilutive securities:
Weighted average common stock equivalents	101
Weighted average common shares outstanding - diluted	7,738
EPS available to common shareholders
Basic earnings per common share	$	0.53
Diluted earnings per common share	$	0.53

⁽¹⁾Net income allocated to common shareholders for basic and diluted earnings per share may differ under the two-class method as a result of adding common share equivalents for options to dilutive shares outstanding, which alters the ratio used to allocate net income to common shareholders and participating securities for the purposes of calculating diluted earnings per share.

For the three months ended March 31, 2019, the basic and diluted earnings per share were calculated using the treasury stock method, as disclosed in the table below.



(In thousands, except per share data)	For the three months ended March 31, 2019
Basic:
Net income attributable to common shareholders	$	3,467
Weighted average common shares outstanding	7,751,750
Basic earnings per share	$	0.45
Diluted:
Net income attributable to common shareholders	$	3,467
Weighted average common shares outstanding	7,751,750
Add: Dilutive effects of assumed exercises of stock options	117,431
Weighted average common and dilutive potential common shares outstanding	7,869,181
Diluted earnings per common share	$	0.44

Stock options for 30,000 shares of common stock were not considered in computing diluted earnings per common share for both the three months ended March 31, 2020 and 2019, because they were antidilutive.