EARNINGS PER SHARE

3 Months Ended

Mar. 31, 2014

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 is as follows:

	Three months ended March 31,
(In thousands except per share data )	2014			2013
Net income available for stockholders:	$	1,978		$	1,449
Less: Dividends paid		(1,145	)		(1,141	)
Undistributed earnings	$	833		$	308

Average basic shares outstanding:
Common stock		35,746			35,549
Restricted shares of common stock		1,212			1,246
		36,958			36,795
Diluted shares outstanding:
Common stock		35,746			35,549
Dilutive effect of stock based awards		297			208
		36,043			35,757
Restricted shares of common stock		1,212			1,246
		37,255			37,003

Inclusion of all participating securities in the computation of earnings per share (EPS) under the two-class method had no impact on the basic EPS amounts reported.

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:

	Three months ended March 31,
(in thousands)	2014	2013
Stock options	42	42

- Definition

The entire disclosure for earnings per share.

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