Note 10. Stockholders’ Equity and Earnings per Share

STOCKHOLDERS’ EQUITY – Accumulated Other Comprehensive Income (Loss)

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

	Three Months Ended September 30,				Nine Months Ended September 30,				Affected Line Item on
(dollars in thousands)	2019		2018		2019		2018		Consolidated Statement of Income
Available-for-sale securities
Realized gains on sales of securities	$	286	$	-	$	312	$	120	Gain on sale of available-for-sale securities, net
Tax effect		61		-		66		25	Income tax expense
	$	225	$	-	$	246	$	95

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

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

Three Months Ended September 30, 2019
Balance at beginning of period	$	679		$	679
Net other comprehensive loss		(13	)		(13	)
Balance at end of period	$	666		$	666

Three Months Ended September 30, 2018
Balance at beginning of period	$	(2,889	)	$	(2,889	)
Net other cmprehensive loss		(803	)		(803	)
Balance at end of period	$	(3,692	)	$	(3,692	)

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

Nine Months Ended September 30, 2019
Balance at beginning of period	$	(2,156	)	$	(2,156	)
Net other comprehensive income		2,822			2,822
Balance at end of period	$	666		$	666

Nine Months Ended September 30, 2018
Balance at beginning of period	$	(707	)	$	(707	)
Net other comprehensive loss		(2,769	)		(2,769	)
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	$	(3,692	)	$	(3,692	)

The following tables present the change in each component of accumulated other comprehensive income (loss) on a pre-tax and after-tax basis for the periods indicated.

	Three Months Ended September 30, 2019
(dollars in thousands)	Pretax			Tax			Net-of-Tax
Unrealized losses on available-for-sale securities:
Unrealized holding gains arising during the period	$	270		$	58		$	212
Reclassification adjustment for gains recognized in income		(286	)		(61	)		(225	)

Total change in accumulated other comprehensive income, net	$	(16	)	$	(3	)	$	(13	)

	Three Months Ended September 30, 2018
(dollars in thousands)	Pretax			Tax			Net-of-Tax
Unrealized losses on available-for-sale securities:
Unrealized holding losses arising during the period	$	(1,017	)	$	(214	)	$	(803	)

Total change in accumulated other comprehensive loss, net	$	(1,017	)	$	(214	)	$	(803	)

	Nine Months Ended September 30, 2019
(dollars in thousands)	Pretax			Tax			Net-of-Tax
Unrealized gains on available-for-sale securities:
Unrealized holding gains arising during the period	$	3,884		$	816		$	3,068
Reclassification adjustment for gains recognized in income		(312	)		(66	)		(246	)

Total change in accumulated other comprehensive income, net	$	3,572		$	750		$	2,822

	Nine Months Ended September 30, 2018
(dollars in thousands)	Pretax			Tax			Net-of-Tax
Unrealized losses on available-for-sale securities:
Unrealized holding losses arising during the period	$	(3,385	)	$	(711	)	$	(2,674	)
Reclassification adjustment for gains recognized in income		(120	)		(25	)		(95	)

Total change in accumulated other comprehensive loss, net	$	(3,505	)	$	(736	)	$	(2,769	)

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 and nine months ended September 30, 2019 and 2018:

(dollars in thousands except per share data)	Net Income Available to Common Shareholders (Numerator)		Weighted Average Common Shares (Denominator)		Per Share Amount
Three Months Ended September 30, 2019
Net income, basic	$	2,232		5,199	$	0.43
Potentially dilutive common shares - employee stock purchase program		-		-		-
Diluted	$	2,232		5,199	$	0.43

Three Months Ended September 30, 2018
Net income, basic	$	1,597		5,182	$	0.31
Potentially dilutive common shares - employee stock purchase program		-		-		-
Diluted	$	1,597		5,182	$	0.31

Nine Months Ended September 30, 2019
Net income, basic	$	5,885		5,196	$	1.13
Potentially dilutive common shares - employee stock purchase program		-		-		-
Diluted	$	5,885		5,196	$	1.13

Nine Months Ended September 30, 2018
Net income, basic	$	3,531		5,127	$	0.69
Potentially dilutive common shares - employee stock purchase program		-		-		-
Diluted	$	3,531		5,127	$	0.69

The Company had no antidilutive shares outstanding in the nine months ended September 30, 2019 and 2018, respectively. Nonvested 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.