EARNINGS PER SHARE

Earnings per share for the three and six months ended June 30, 2012 and 2013 is calculated based on the weighted average number of common and common equivalent shares outstanding during the periods. The following table sets forth the computation of the basic and diluted earnings per share for the three and six months ended June 30, 2012 and 2013:



	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2012			2013			2012			2013

Net income	$	2,663		$	4,144		$	7,122		$	9,403
Net income allocated to non-vested share awards	(85		)	(73		)	(196		)	(170		)
Preferred stock dividend	(3		)	—			(7		)	(4		)
Undistributed earnings available to common stockholders	$	2,575		$	4,071		$	6,919		$	9,229
Income from discontinued operations	203			539			742			366
Undistributed earnings from continuing operations available to common stockholders	$	2,372		$	3,532		$	6,177		$	8,863

Weighted average number of common shares outstanding for basic EPS computation	18,077			18,201			18,171			18,170
Effect of dilutive securities:										—
Stock options	76			164			66			181
Convertible junior subordinated debentures	—			—			—			4,392
Weighted average number of common and common equivalent shares outstanding for diluted EPS computation	18,153			18,365			18,237			22,743

Basic earnings per common share:
Undistributed earnings	$	0.14		$	0.20		$	0.34		$	0.49
Allocation of earnings to non-vested share awards	—			—			0.01			0.01
Basic earnings per share from continuing operations	$	0.14		$	0.20		$	0.35		$	0.50
Discontinued operations	0.01			0.03			0.04			0.02
Basic earnings per common share	$	0.15		$	0.23		$	0.39		$	0.52

Diluted earnings per common share:
Undistributed earnings	$	0.14		$	0.20		$	0.34		$	0.45
Allocation of earnings to non-vested share awards	—			—			0.01			$	0.01
Diluted earnings per share from continuing operations	$	0.14		$	0.20		$	0.35		$	0.46
Discontinued operations	0.01			0.03			0.04			0.02
Diluted earnings per common share	$	0.15		$	0.23		$	0.39		$	0.48

Share-based awards that contain non-forfeitable rights to dividends or dividend equivalents, whether paid or unpaid, are participating securities and included in the computation of both basic and diluted earnings per share. Our grants of restricted stock awards to our employees and directors are considered participating securities, and we have prepared our earnings per share calculations to include outstanding unvested restricted stock awards in the basic and diluted weighted average shares outstanding calculation.

The fully diluted weighted average shares outstanding for the six months ended June 30, 2013, and the corresponding calculation of fully diluted earnings per share include approximately 4.4 million shares that would be issued upon conversion of our convertible junior subordinated debentures as a result of the application of the if-converted method prescribed by FASB ASC 260-10-45. For the three and six months ended June 30, 2012 and the three months ended June 30, 2013, the conversion of our convertible junior subordinated debentures is excluded from the fully diluted earnings per share calculation and the fully diluted weighted average share count because the inclusion of such converted shares would result in an antidilutive impact.

The following table sets forth the reconciliation of the numerators and denominators of the basic and diluted earnings per share computations for the three months ended June 30, 2013:



	For the Three Months Ended June 30, 2013
	Income (Numerator)		Shares (Denominator)	Per-Share Amount
Net income	$	4,144
Less: Preferred Stock dividends	—

Basic earnings per share
Net income available to common stockholders	4,144		18,201	$	0.23

Effect of dilutive securities
Stock options	—		164
Convertible junior subordinated debentures	—		—

Diluted earnings per share
Net income available to common stockholders and assumed conversions	$	4,144	18,365	$	0.23

The following table sets forth the reconciliation of the numerators and denominators of the basic and diluted earnings per share computations for the six months ended June 30, 2013:



	For the Six Months Ended June 30, 2013
	Income (Numerator)			Shares (Denominator)	Per-Share Amount
Net income	$	9,403
Less: Preferred Stock dividends	(4		)

Basic earnings per share
Net income available to common stockholders	9,399			18,170	$	0.52

Effect of dilutive securities
Stock options	—			181
Convertible junior subordinated debentures	1,474			4,392

Diluted earnings per share
Net income available to common stockholders and assumed conversions	$	10,873		22,743	$	0.48