Earnings Per Share and Share Repurchase Plan

12 Months Ended

Dec. 31, 2011

Earnings Per Share and Share Repurchase Plan

Earnings Per Share and Share Repurchase Plan

Note 2 – Earnings Per Share and Share Repurchase Plan

The following table sets forth the computation of basic and diluted earnings per share:

Year ended December 31,	2011		2010
Numerator for basic and diluted earnings per share - net income	$	8,880	$	7,217
Denominator for basic earnings per share - weighted average shares outstanding		3,149,752		3,105,565
Effect of dilutive securities - employee stock options		13,996		9,157
Denominator for diluted earnings per share - adjusted weighted average shares outstanding		3,163,748		3,114,722
Earnings per share - basic	$	2.82	$	2.32
Earnings per share - diluted	$	2.81	$	2.32

There were 61,350 and 117,225 stock options that were anti-dilutive as of December 31, 2011 and 2010, respectively. These stock options were not included in the above calculation.

On January 24, 2008, QNB announced that the Board of Directors authorized the repurchase of up to 50,000 shares of its common stock in open market or privately negotiated transactions. On February 9, 2009, the Board of Directors approved increasing the authorization to 100,000 shares. The repurchase authorization does not bear a termination date. There were no shares repurchased during the years ended December 31, 2011 or 2010. As of December 31, 2011 and 2010, 57,883 shares were repurchased under this authorization at an average price of $16.97 and a total cost of $982,000.