Earnings Per Share

3 Months Ended

Mar. 31, 2024

Basic earnings per share (EPS), which excludes dilution, is computed by dividing income available to common shareholders by the weighted-average number of common shares outstanding for the period. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock, such as stock options or restricted stock awards, result in the issuance of common stock which shares in the earnings of the Company.

A reconciliation of the numerators and denominators of the basic and diluted EPS computations is as follows:


Basic Earnings Per Share	For the Three Months Ended March 31,
(In thousands, except share and per share amounts)	2024		2023


Net income	$	3,676	$	6,970
Weighted average shares outstanding	11,750,528		11,703,813
Basic earnings per share	$	0.31	$	0.60


Diluted Earnings Per Share	For the Three Months Ended March 31,
(In thousands, except share and per share amounts)	2024		2023


Net income	$	3,676	$	6,970
Weighted average shares outstanding	11,750,528		11,703,813
Effect of diluted stock options and restricted stock	39,703		27,322
Weighted average shares of common stock and common stock equivalents	11,790,231		11,731,135
Diluted earnings per share	$	0.31	$	0.59

There were no outstanding options at March 31, 2024 or 2023.

Holders of unvested restricted stock accrue dividends at the same rate as common shareholders and they both share equally in undistributed earnings. Unvested restricted stock awards that are time-based contain non-forfeitable rights to dividends or dividend equivalents and are considered to be participating securities in the earnings per share computation using the two-class method. Under the two-class method, earnings are allocated to common shareholder and participating securities according to their respective rights to earnings. Unvested stock awards that vest based on performance or market conditions are not considered to be participating securities in the earnings per share calculation because accrued dividends on shares that do not vest are forfeited.