EARNINGS PER SHARE

9 Months Ended

Sep. 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 September 30,						Nine months ended September 30,
(In thousands except per share data )		2012			2011		2012			2011

Net income available for stockholders:		$	2,110		$	1,200	$	5,915		$	3,095
Less: Dividends paid			(754	)		-		(2,264	)		-
Undistributed income		$	1,356		$	1,200	$	3,651		$	3,095

Basic shares outstanding:
Common Stock			35,514			35,409		35,525			35,371
Restricted shares of common stock			1,134			995		1,123			991
			36,648			36,404		36,648			36,362
Diluted shares outstanding:
Common Stock			35,514			35,409		35,525			35,371
Dilutive effect of stock options			110			170		145			419
			35,624			35,579		35,670			35,790
Restricted shares of common stock			1,134			995		1,123			991
			36,758			36,574		36,793			36,781
Basic earnings per share:
Common Stock:
Distributed earnings		$	0.02		$	-	$	0.06		$	-
Undistributed income			0.04			0.03		0.10			0.09
		$	0.06		$	0.03	$	0.16		$	0.09
Restricted shares of common stock:
Distributed earnings		$	0.02		$	-	$	0.06		$	-
Undistributed income			0.04			0.03		0.10			0.08
		$	0.06		$	0.03	$	0.16		$	0.08
Diluted earnings per share:
Common Stock:
Distributed earnings		$	0.02		$	-	$	0.06		$	-
Undistributed income			0.04			0.03		0.10			0.08
		$	0.06		$	0.03	$	0.16		$	0.08

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 September 30,		Nine months ended September 30,
	2012	2011	2012	2011
Stock options	42	42	42	42

- Definition

The entire disclosure for earnings per share.

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