Net Income per Share

6 Months Ended

Jun. 30, 2011

Net Income per Share

Net Income per Share

NOTE 3.  Net Income per Share

 Basic net income per common share is calculated as net income available to common shareholders divided by the weighted average common shares outstanding during the reporting period.  Net income available to common shareholders is calculated as net income less accrued dividends and discount accretion related to preferred stock. 

Diluted net income per common share is computed similarly to that of basic net income per common share, except that the denominator is increased to include the number of additional common shares that would have been outstanding if all potentially dilutive common shares, principally stock options and warrants, were issued during the reporting period utilizing the Treasury stock method.  However, when a net loss rather than net income is recognized, diluted earnings per share equals basic earnings per share.

The following is a reconciliation of the calculation of basic and diluted income per share. 

	Three months ended June 30,					Six months ended June 30,
(In thousands, except per share amounts)		2011		2010		2011		2010
Net income	$	644	$	681	$	863	$	1,429
Less: Preferred stock dividends and discount accretion		395		379		778		752
Income available to common shareholders	$	249	$	302	$	85	$	677
Weighted average common shares outstanding - Basic		7,271		7,156		7,245		7,153
Plus:  Potential dilutive common stock equivalents		439		319		443		239
Weighted average common shares outstanding - Diluted		7,710		7,475		7,688		7,392
Net income per common share -
Basic	$	0.03	$	0.04	$	0.01	$	0.09
Diluted		0.03		0.04		0.01		0.09
Stock options and common stock excluded from the income per share computation as their effect would have been anti-dilutive		385		566		386		750

The "potential dilutive common stock equivalents" and the "stock options and common stock excluded from the income per share calculation as their effect would have been anti-dilutive" shown in the table above include the impact of 764,778 common stock warrants issued to the U.S. Department of Treasury under the Capital Purchase Program in December 2008.  These warrants were dilutive for the three and six months ended June 30, 2011.