NOTE 5 EARNINGS PER SHARE

Basic earnings per share are calculated using the two-class method. The two-class method is an earnings allocation formula under which earnings per share is calculated from common stock and participating securities according to dividends declared and participation rights in undistributed earnings. Under this method, all earnings distributed and undistributed, are allocated to participating securities and common shares based on their respective rights to receive dividends. Unvested share-based payment awards that contain non-forfeitable rights to dividends are considered participating securities (i.e. unvested restricted stock), not subject to performance based measures. Basic earnings per share is calculated by dividing net income available to common shareholders by the weighted average number of common shares outstanding. Application of the two-class method for participating securities results a more dilutive basic earnings per share as the participating securities are allocated the same amount of income as if they are outstanding for purposes of basic earnings per share. There is no additional potential dilution in calculating diluted earnings per share, therefore basic and diluted earnings per share are the same amounts. Other than the restricted stock plan, the Company has no other stock based compensation plans.


	In Thousands
	Three Months Ended						Year to Date Ended
	September 30,			September 30,			September 30,			September 30,
	2017			2016			2017			2016
Earnings per share
Net income	$	3,222		$	3,015		$	9,284		$	8,470
Less: distributed earnings allocated to participating securities		(12	)		(10	)		(33	)		(27	)
Less: undistributed earnings allocated to participating securities		(19	)		(16	)		(54	)		(45	)

Net earnings available to common shareholders	$	3,191		$	2,989		$	9,197		$	8,398

Weighted average common shares outstanding including participating securities⁽¹⁾		9,252,919			9,225,532			9,245,514			9,218,376
Less: average unvested restricted shares ⁽¹⁾		(88,596	)		(80,422	)		(87,074	)		(77,866	)

Weighted average common shares outstanding ⁽¹⁾		9,164,323			9,145,110			9,158,440			9,140,510

Basic earnings and diluted per share⁽¹⁾	$	0.35		$	0.33		$	1.00		$	0.92


⁽¹⁾ Share data has been adjusted to reflect a 2-for-1 stock split on September 20, 2017