NOTE 8: EARNINGS PER SHARE

Basic earnings per share excludes dilution and is computed by dividing net income or loss available to common stockholders by the weighted average number of common shares outstanding for the period. Diluted earnings per share reflects the potential dilution that could occur if contracts to issue common stock were exercised or converted into common stock that would then share in earnings. The following table sets forth the Company’s unaudited earnings per share calculations for the periods indicated:

	Quarter Ended September 30, 2014				Quarter Ended September 30, 2013
(dollars in thousands, except per share amounts)	Basic		Diluted		Basic		Diluted

Net income	$	2,659	$	2,659	$	1,453	$	1,453

Basic common shares outstanding		7,735,350		7,735,350		7,414,527		7,414,527
Effect of contingent shares issuable				64,000				-
Effect of options and restricted stock				441,074				341,948
Diluted common shares outstanding				8,240,424				7,756,475

Earnings per share	$	0.34	$	0.32	$	0.20	$	0.19

Based on a weighted average basis, options to purchase 65,407 shares of common stock were excluded for the quarter ended September 30, 2014 because their effect would have been anti-dilutive. As of September 30, 2014, FFI had accrued $1.0 million related to contingent consideration to be paid to shareholders of an acquired company. Per the merger agreement, this contingent consideration is to be paid in shares of common stock of FFI based on an assigned value of $15.00 per share. Based on this per share price, the number of dilutive shares related to this contingent consideration is 64,000 as of September 30, 2014.

	Nine Months Ended September 30, 2014				Nine Months Ended September 30, 2013
(dollars in thousands, except per share amounts)	Basic		Diluted		Basic		Diluted

Net income	$	5,388	$	5,388	$	4,363	$	4,363

Basic common shares outstanding		7,734,372		7,734,372		7,402,044		7,402,044
Effect of contingent shares issuable				64,000				-
Effect of options and restricted stock				390,261				305,984
Diluted common shares outstanding				8,188,633				7,708,028

Earnings per share	$	0.70	$	0.66	$	0.59	$	0.57

Based on a weighted average basis, options to purchase 65,633 and 206,986 shares of common stock were excluded for the nine months ended September 30, 2014 and 2013, respectively, because their effect would have been anti-dilutive. As of September 30, 2014, FFI had accrued $1.0 million related to contingent consideration to be paid to shareholders of an acquired company. Per the merger agreement, this contingent consideration is to be paid in shares of common stock of FFI based on an assigned value of $15.00 per share. Based on this per share price, the number of dilutive shares related to this contingent consideration is 64,000 as of September 30, 2014.