Note 3 - Earnings Per Share

6 Months Ended

Jun. 30, 2016

NOTE 3. EARNINGS PER SHARE

Basic earnings per share excludes dilution and is computed by dividing net income available to common shareholders by the weighted average number of common shares outstanding for the period, excluding unvested restricted stock awards which do not have voting rights or share in dividends. Diluted earnings per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that subsequently shared in the earnings of the Holding Company. The computation of diluted earnings per share does not assume conversion, exercise, or contingent issuance of securities that would have an anti-dilutive effect on earnings per share.

The following is a computation of basic and diluted earnings per share for the three and six months ended June 30, 2016 and 2015.

	For the Three Months Ended				For the Six Months Ended
(Amounts in thousands, except per share information)	June 30,				June 30,
Earnings Per Share	2016		2015		2016		2015
Numerators:
Net income	$	1,556	$	2,390	$	596	$	4,191
Less:
Preferred stock dividends		—		50		—		100
Net income available to common shareholders	$	1,556	$	2,340	$	596	$	4,091
Denominators:
Weighted average number of common shares outstanding - basic		13,367		13,338		13,364		13,320
Potentially dilutive common shares (1)		58		32		44		33
Weighted average number of common shares outstanding - diluted		13,425		13,370		13,408		13,353
Earnings per common share:
Basic	$	0.11	$	0.18	$	0.04	$	0.31
Diluted	$	0.11	$	0.18	$	0.04	$	0.31
Anti-dilutive options not included in diluted earnings per share calculation		116		121		116		121
Anti-dilutive restricted shares not included in diluted earnings per share calculation		—		8		41		30

(1)

Represents the effects of the assumed exercise of stock options and vesting of non-participating restricted shares.