Earnings Per Common Share

3 Months Ended

Mar. 31, 2013

Earnings Per Common Share [Abstract]

Earnings Per Common Share

Note 10 – Earnings Per Common Share

Non-vested share-based payment awards that contain nonforfeitable rights to dividends or dividend equivalents are participating securities and are included in the computation of earnings per share pursuant to the two-class method. The two-class method is an earnings allocation formula that determines earnings per share for each class of common stock and participating security according to dividends declared (or accumulated) and participation rights in undistributed earnings. Certain of the Company's non-vested restricted stock awards qualify as participating securities.

Net earnings, less any preferred dividends accumulated for the period (whether or not declared), is allocated between the common stock and participating securities pursuant to the two-class method. Basic earnings per common share is computed by dividing net earnings available to common shareholders by the weighted average number of common shares outstanding during the period, excluding participating non-vested restricted shares.

Diluted earnings per common share is computed in a similar manner, except that first the denominator is increased to include the number of additional common shares that would have been outstanding if potentially dilutive common shares, excluding the participating securities, were issued using the treasury stock method. For all periods presented, stock options, certain restricted stock awards and restricted stock units are the only potentially dilutive non-participating instruments issued by the Company. Next, we determine and include in diluted earnings per common share calculation the more dilutive effect of the participating securities using the treasury stock method or the two-class method. Undistributed losses are not allocated to the non-vested share-based payment awards (the participating securities) under the two-class method as the holders are not contractually obligated to share in the losses of the Company.

ESOP shares are considered outstanding for basic and diluted earnings per share when the shares are committed to be released.

Earnings per common share are summarized in the following table:

	Three Months Ended March 31,
	2013		2012
	(In thousands, except per share amounts)
Net income	$	797	$	546
Less net income attributable to participating securities(1)		17		9
Net income available to common shareholders	$	780	$	537
Weighted average number of shares outstanding, basic		2,588		2,582
Effect of potentially dilutive common shares(2)		57		22
Weighted average number of shares outstanding, diluted		2,645		2,604
Earnings per share, basic	$	0.31	$	0.21
Earnings per share, diluted	$	0.30	$	0.21

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(1) Represents dividends paid and undistributed earnings allocated to non-vested restricted stock awards.

(2) Represents the effect of the assumed exercise of warrants, assumed exercise of stock options, vesting of non-participating restricted shares, and vesting of restricted stock units, based on the treasury stock method.

There were no shares considered anti-dilutive for the three months ended March 31, 2013 or 2012.