3. Earnings per Common Share

6 Months Ended

Jun. 30, 2013

Notes to Financial Statements

Note 3. Earnings per Common Share

Earnings per common share amounts are computed based on the weighted average number of shares of common stock issued during the period (retroactively adjusted for stock splits and stock dividends), including Dividend Reinvestment Plan shares issuable upon reinvestment of dividends declared, and reduced for shares held in treasury.

The following tables illustrate the calculation for the periods ended June 30, as adjusted for the cash dividends declared on the preferred stock:

For The Quarters Ended June 30,	2013		2012
Net income, as reported	$	1,238,344	$	1,021,192
Less: dividends to preferred shareholders (1)		20,312		46,875
Net income available to common shareholders	$	1,218,032	$	974,317
Weighted average number of common shares
used in calculating earnings per share		4,831,307		4,760,169
Earnings per common share	$	0.25	$	0.20

For The Six Months Ended June 30,	2013		2012
Net income, as reported	$	2,280,122	$	1,986,042
Less: dividends to preferred shareholders (1)		40,625		93,750
Net income available to common shareholders	$	2,239,497	$	1,892,292
Weighted average number of common shares
used in calculating earnings per share		4,823,988		4,748,013
Earnings per common share	$	0.46	$	0.40

(1) Reflects a reduction in the dividend rate paid on the preferred stock, effective January 1, 2013, from a fixed rate of 7.50% to a quarterly adjustable rate equal to the Wall Street Journal Prime Rate in effect on the first business day of the quarter.