Note 2 - Common Stock Outstanding and Earnings Per Share

3 Months Ended

Mar. 31, 2019

Notes to Financial Statements

Earnings Per Share [Text Block]

NOTE

2.

COMMON STOCK OUTSTANDING AND EARNINGS PER SHARE

On

January 31, 2019

we issued

1,834,142

shares of common stock, and paid

$15.3

million in cash as part of our acquisition of Merchants Holding Company (“Merchants”). Merchants shareholders now hold, in the aggregate, approximately

10%

of our outstanding common stock. The acquisition, after fair value adjustments added

$85.3

million in loans,

$190.2

million in deposits and

$107.4

million in investment securities to our bank as of

January 31, 2019.

See Note

10

Acquisition

in these

Notes to Consolidated Financial Statements

for additional information on the acquisition

Basic earnings per share excludes dilution and is computed by dividing income 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 would 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 then 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

months ended

March 31, 2019

and

2018.

	For the Three Months Ended
(Amounts in thousands, except per share information)	March 31,
Earnings Per Share	2019		2018
Numerators:
Net income	$	2,306	$	3,241
Denominators:
Weighted average number of common shares outstanding - basic (1)		17,489		16,225
Effect of potentially dilutive common shares (2)		63		85
Weighted average number of common shares outstanding - diluted		17,552		16,310
Earnings per common share:
Basic	$	0.13	$	0.20
Diluted	$	0.13	$	0.20
Anti-dilutive options not included in diluted earnings per share calculation		—		—
Anti-dilutive restricted shares not included in diluted earnings per share calculation		—		42

(

1

)

Excludes unvested restricted shares because they do

not

have dividend or voting rights

(

2

)

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