EARNINGS PER SHARE

6 Months Ended

Jun. 30, 2012

3.	EARNINGS PER SHARE

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 June 30,					Six months ended June 30,
(In thousands except per share data )	2012			2011		2012			2011
Net income available for stockholders:	$	2,173		$	1,229	$	3,805		$	1,895
Less: Dividends paid Common Stock		(734	)		-		(1,468	)		-
Restricted shares of common stock		(21	)		-		(42	)		-
Undistributed income	$	1,418		$	1,229	$	2,295		$	1,895

Allocation of undistributed income:
Common Stock	$	1,375		$	1,196	$	2,226		$	1,844
Restricted shares of common stock		43			33		69			51

Basic shares outstanding:
Common Stock		35,530			35,386		35,531			35,350
Restricted shares of common stock		1,138			1,008		1,118			990
		36,668			36,394		36,649			36,340
Diluted shares outstanding:
Common Stock		35,530			35,386		35,531			35,350
Dilutive effect of stock options		42			387		147			508
		35,572			35,773		35,678			35,858
Restricted shares of common stock		1,138			1,008		1,118			990
		36,710			36,781		36,796			36,848
Basic earnings per share:
Common Stock:
Distributed earnings	$	0.02		$	-	$	0.04		$	-
Undistributed income		0.04			0.03		0.06			0.05
	$	0.06		$	0.03	$	0.10		$	0.05
Restricted shares of common stock:
Distributed earnings	$	0.02		$	-	$	0.04		$	-
Undistributed income		0.04			0.03		0.06			0.05
	$	0.06		$	0.03	$	0.10		$	0.05
Diluted earnings per share:
Common Stock:
Distributed earnings	$	0.02		$	-	$	0.04		$	-
Undistributed income		0.04			0.03		0.06			0.05
	$	0.06		$	0.03	$	0.10		$	0.05

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:

(shares in thousands)	Three months ended June 30,				Six months ended June 30,
	2012		2011		2012		2011
Stock options		42		42		42		42

- Definition

The entire disclosure for earnings per share.

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