Earnings Per Share

3 Months Ended

Mar. 31, 2014

The following table sets forth the computation of basic and diluted earnings per share (EPS) for the three months ended March 31, 2014 and 2013:



	Income (Numerator)		Shares (Denominator)	Per-Share Amount
For the three months ended March 31, 2014
Net income as reported	$	3,428,000
Less dividends and amortization of premium on preferred stock	—
Basic EPS: Income available to common shareholders	3,428,000		10,627,214	$	0.32
Effect of dilutive securities: restricted stock			60,911
Diluted EPS: Income available to common shareholders plus assumed conversions	$	3,428,000	10,688,125	$	0.32
For the three months ended March 31, 2013
Net income as reported	$	2,856,000
Less dividends and amortization of premium on preferred stock	195,000
Basic EPS: Income available to common shareholders	2,661,000		9,869,177	$	0.27
Effect of dilutive securities: warrants and restricted stock			48,550
Diluted EPS: Income available to common shareholders plus assumed conversions	$	2,661,000	9,917,727	$	0.27

All earnings per share calculations have been made using the weighted average number of shares outstanding during the period. The potentially dilutive securities are incentive stock options, unvested shares of restricted stock granted to certain key members of Management and the warrants. The number of dilutive shares is calculated using the treasury method, assuming that all options and warrants were exercisable at the end of each period. Options and warrants that are out-of-the-money are not considered in the calculation of dilutive earnings per share as the effect would be anti-dilutive.

The following table presents the number of options and warrants outstanding as of March 31, 2014 and 2013 and the amount for which the market price at period end is above or below the strike price:



	Outstanding	In-the-Money	Out-of-the-Money
As of March 31, 2014
Incentive stock options	42,000	—	42,000
Warrants issued to Treasury	225,904	—	225,904
Total dilutive securities	267,904	—	267,904
As of March 31, 2013
Incentive stock options	42,000	—	42,000
Warrants issued to Treasury	225,904	225,904	—
Total dilutive securities	267,904	225,904	42,000

- Definition

The entire disclosure for earnings per share.

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