Note 10. 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
	2019		2018		Consolidated Statement of Income
Available-for-sale securities	(in thousands)
Realized gains on sales of securities	$	26	$	80	Gain on sale of securities, net
Tax effect		5	$	17	Income tax expense (benefit)
	$	21	$	63

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

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

Three Months Ended March 31, 2019
Balance at beginning of period	$	(2,156	)	$	(2,156	)
Net other comprehensive income		1,540			1,540
Balance at end of period	$	(616	)	$	(616	)


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	)

The following tables present 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, 2019
	Pretax				Tax				Net-of-Tax
	(in thousands)

Unrealized gains on available-for-sale securities:
Unrealized holding gains arising during the period		$	1,975			$	414			$	1,561
Reclassification adjustment for gains recognized in income			(26	)			(5	)			(21	)

Total change in accumulated other comprehensive loss, net		$	1,949			$	409			$	1,540

	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	)

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 the employee stock purchase plan.

The following is a reconciliation of the denominators of the basic and diluted EPS computations for the three months ended March 31, 2019 and 2018:

	Net Income Available to Common Stockholders (Numerator)		Weighted Average Common Shares (Denominator)		Per Share Amount
	(in thousands except per share data)
Three Months Ended March 31, 2019
Net income, basic	$	2,027		5,187	$	0.39
Potentially dilutive common shares - stock options		-		-		-
Potentially dilutive common shares - employee stock purchase program		-		-		-
Diluted	$	2,027		5,187	$	0.39

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

The Company had 100 and 71 antidilutive shares in the first three months of 2019 and 2018, respectively. 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.