Basic earnings per share is 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 in 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.

The Compensation Committee of the Company has determined that it is appropriate to award shares of the common stock of the Company to Outside Directors and Employees that are officers of the Company or the Bank who also serve as Directors of the Company and the Bank as a portion of their retainer for services rendered as Directors of the Company and the Bank. The Committee believes that it is appropriate to award the Directors shares equal to approximately $4,000, rounded to the nearest whole share on an annual basis commencing on June 5, 2020 and thereafter on the first Friday of June in each year. The value for the shares is to be based upon the closing price for shares on June 4, 2020 and thereafter on the first Thursday in June each year. Annually, the dollar amount of shares to be given each year is reviewed by the Board Compensation committee and ratified by the Board. On June 3, 2022, twelve Directors each received $10,013 worth of shares which equated to 240 shares. On June 2, 2023, twelve Directors each received $14,997 worth of shares which equated to 754 shares. On June 7, 2024, twelve Directors each received $15,007 worth of shares which equated to 716 shares while one Director received a prorated dollar amount of $5,911 which equated to 282 shares. On December 5, 2024, one new Director received 54 prorated shares worth

approximately $1,730. The use of stock for Directors' retainer, does not have an effect on diluted earnings per share as it is immediately vested.

The table below presents basic and diluted earnings per share for the years ended December 31, 2024, 2023, and 2022.


	(In Thousands, Except Per Share Data)
	Year Ended
	December 31,			December 31,			December 31,
	2024			2023			2022
Earnings per share
Net income	$	25,938		$	22,787		$	32,515
Less: distributed earnings allocated to participating securities		(143	)		(128	)		(97	)
Less: undistributed earnings allocated to participating securities		(362	)		(120	)		(187	)
Net earnings available to common shareholders	$	25,433		$	22,539		$	32,231
Weighted average common shares outstanding including participating securities		13,684,961			13,641,336			13,206,713
Less: average unvested restricted shares		(266,232	)		(148,433	)		(115,291	)
Weighted average common shares outstanding		13,418,729			13,492,903			13,091,422
Basic and diluted earnings per share	$	1.90		$	1.67		$	2.46