Earnings Per Common Share

9 Months Ended

Sep. 30, 2020

EARNINGS PER COMMON SHARE

The two-class method is used in the calculation of basic and diluted earnings per common 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 periods noted below was as follows:


	For the three months ended September 30,				For the nine months ended September 30,
(In thousands, except per share data)	2020		2019		2020		2019
Net income	$	5,209	$	4,409	$	12,040	$	11,431
Net income allocated to participating securities	40		45		140		110

Net income allocated to common shareholders (1)	$	5,169	$	4,364	$	11,900	$	11,321
Weighted average common shares - issued	7,734		7,721		7,730		7,738
Average unvested restricted share awards	(59)		(80)		(90)		(76)
Weighted average common shares outstanding - basic	7,675		7,641		7,640		7,662
Effect of dilutive securities:
Weighted average common stock equivalents	37		111		61		114
Weighted average common shares outstanding - diluted	7,712		7,752		7,701		$	7,776
EPS available to common shareholders
Basic earnings per common share	$	0.68	$	0.57	$	1.56	$	1.48
Diluted earnings per common share	$	0.67	$	0.56	$	1.55	$	1.46

(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.

Stock options for 214,668 and 30,000 shares of common stock were not considered in computing diluted earnings per common share for the three months ended September 30, 2020 and 2019, respectively, and 117,334 and 30,000 of common stock were not considered in computing diluted earnings per common share for the nine months ended September 30, 2020 and 2019, respectively, because they were antidilutive.