EARNINGS PER SHARE

9 Months Ended

Sep. 30, 2011

Basic and diluted earnings per share are computed by dividing net income by the weighted average number of shares outstanding during the respective periods. The basic and diluted calculations differ as a result of the dilutive effect of stock options and time lapse restricted shares included in diluted earnings per share, but excluded from basic earnings per share. In addition, the Company has periodically issued share-based payment awards that contain non-forfeitable rights to dividends and are therefore considered participating securities. A reconciliation of weighted average shares outstanding along with the earnings per share attributable to restricted shares of common stock (participating securities) is as follows:

	Three months ended September 30,				Nine months ended September 30,
(In thousands except per share data )	2011		2010		2011		2010
Net income available for stockholders:	$	1,200	$	1,000	$	3,095	$	3,385
Less: Dividends paid
Common Stock		-		-		-		-
Restricted shares of common stock		-		-		-		-
Undistributed income	$	1,200	$	1,000	$	3,095	$	3,385

Allocation of undistributed income:
Common Stock	$	1,169	$	976	$	3,015	$	3,303
Restricted shares of common stock		31		24		80		82

Basic shares outstanding:
Common Stock		35,409		35,293		35,371		35,278
Restricted shares of common stock		995		897		991		895
		36,404		36,190		36,362		36,173
Diluted shares outstanding:
Common Stock		35,409		35,293		35,371		35,278
Dilutive effect of stock options		170		396		419		465
		35,579		35,689		35,790		35,743
Restricted shares of common stock		995		897		991		895
		36,574		36,586		36,781		36,638
Basic earnings per share:
Common Stock:
Distributed earnings	$	-	$	-	$	-	$	-
Undistributed income		0.03		0.03		0.09		0.09
	$	0.03	$	0.03	$	0.09	$	0.09
Restricted shares of common stock:
Distributed earnings	$	-	$	-	$	-	$	-
Undistributed income		0.03		0.03		0.08		0.09
	$	0.03	$	0.03	$	0.08	$	0.09
Diluted earnings per share:
Common Stock:
Distributed earnings	$	-	$	-	$	-	$	-
Undistributed income		0.03		0.03		0.08		0.09
	$	0.03	$	0.03	$	0.08	$	0.09

The effect of the Company’s stock options as shown below have been excluded from the computation of diluted earnings per share for the following periods, as their effect would have been anti-dilutive:

(in thousands)	Three months ended September 30,				Nine months ended September 30,
	2011		2010		2011		2010
Stock options		42		42		42		42