EARNINGS PER SHARE

Basic earnings per share (EPS) of common stock are based on the weighted-average number of common shares outstanding during each period. Diluted earnings per share of common stock include the dilutive effect of potential common shares outstanding. The Company’s potential common shares outstanding are stock options, shares associated with the Long-Term Incentive Compensation Plan and non-vested shares. The Company calculates the dilutive effect of outstanding options using the treasury stock method. Anti-dilutive shares are not included in the computation of diluted EPS when their exercise price is greater than the average closing market price of the common shares. The Company calculates the dilutive effect of shares related to the Long-Term Incentive Compensation Plan and non-vested shares based on the number of shares, if any, that would be issuable if the end of the fiscal period were the end of the contingency period.

In computing EPS for the three and nine months ended March 31, 2018 and 2017, net income as reported for each respective period is divided by the fully diluted weighted-average number of shares outstanding:



	Three Months Ended		Nine Months Ended
	March 31,		March 31,
(in thousands)	2018	2017	2018	2017

Basic shares	7,853	7,804	7,844	7,770

Potential common shares:
Stock options	57	95	67	90
Long-term incentive plan	15	21	15	10
Non-vested shares	5	2	3	2
	77	118	85	102

Diluted shares	7,930	7,922	7,929	7,872

Anti-dilutive shares	61	-	22	-

Cash dividends declared per common share were $0.22 and $0.20 for the quarters ended March 31, 2018 and 2017, respectively. Cash dividends declared per common share were $0.66 and $0.60 for the nine months ended March 31, 2018 and 2017, respectively.