Note 8. Stockholders' Equity and Earnings per Share

STOCKHOLDERS' EQUITY – Accumulated Other Comprehensive Loss

The following table presents information on amounts reclassified out of accumulated other comprehensive loss, by category, during the periods indicated:

	Three Months Ended March 31,				Affected Line Item on
	2018		2017		Consolidated Statement of Income
Available-for-sale securities	(in thousands)
Realized gains on sales of securities	$	80	$	-	Gain on sale of available-for-sale securities, net
Tax effect		17	$	-	Income tax expense
	$	63	$	-

The following table presents the changes in accumulated other comprehensive loss, by category, net of tax, for the periods indicated:

	Unrealized Gains (Losses) on Available-for-Sale Securities			Defined Benefit Pension Plans			Accumulated Other Comprehensive Loss
	(in thousands)

Three Months Ended March 31, 2018
Balance at beginning of period	$	(707	)	$	-		$	(707	)
Net other comprehensive loss		(1,814	)		-			(1,814	)
Reclassification of the income tax effects of the Tax Cuts and Jobs Act from AOCI		(139	)		-			(139	)
Reclassification of net unrealized gains on equity securities from AOCI per ASU 2016-01		(77	)		-			(77	)
Balance at end of period	$	(2,737	)	$	-		$	(2,737	)


Three Months Ended March 31, 2017
Balance at beginning of period	$	(1,739	)	$	(2,469	)	$	(4,208	)
Net other comprehensive income		428			-			428
Balance at end of period	$	(1,311	)	$	(2,469	)	$	(3,780	)

The following table presents the change in each component of accumulated other comprehensive loss on a pre-tax and after-tax basis for the periods indicated.

	Three Months Ended March 31, 2018
	Pretax				Tax				Net-of-Tax
	(in thousands)

Unrealized losses on available-for-sale securities:
Unrealized holding losses arising during the period		$	(2,217	)		$	(466	)		$	(1,751	)
Reclassification adjustment for gains recognized in income			(80	)			(17	)			(63	)

Total change in accumulated other comprehensive loss, net		$	(2,297	)		$	(483	)		$	(1,814	)

	Three Months Ended March 31, 2017
	Pretax			Tax			Net-of-Tax
	(in thousands)

Unrealized gains on available-for-sale securities:
Unrealized holding gains arising during the period		$	648		$	220		$	428
Reclassification adjustment for gains recognized in income			-			-			-

Total change in accumulated other comprehensive loss, net		$	648		$	220		$	428

EARNINGS PER COMMON SHARE

Basic earnings per share is computed by dividing net income by the weighted average number of common shares outstanding during the period. Diluted earnings per share is computed using the weighted average number of common shares outstanding during the period, including the effect of dilutive potential common shares attributable to outstanding stock options.

The following is a reconciliation of the denominators of the basic and diluted EPS computations for the three months ended March 31, 2018 and 2017:

	Net Income Available to Common Shareholders (Numerator)		Weighted Average Common Shares (Denominator)		Per Share Amount
	(in thousands except per share data)
Three Months Ended March 31, 2018
Net income, basic	$	942		5,020	$	0.19
Potentially dilutive common shares - stock options		-		-		-
Potentially dilutive common shares - employee stock purchase program		-		-		-
Diluted	$	942		5,020	$	0.19

Three Months Ended March 31, 2017
Net income, basic	$	942		4,977	$	0.19
Potentially dilutive common shares - stock options		-		15		-
Potentially dilutive common shares - employee stock purchase program		-		-		-
Diluted	$	942		4,992	$	0.19

The Company had no antidilutive shares in the first three months of 2018 or 2017. Non-vested restricted common shares, which carry all rights and privileges of a common share with respect to the stock, including the right to vote, were included in the basic and diluted per common share calculations.