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Note 6 - Earnings Per Share

6 Months Ended

Jun. 30, 2023

Notes to Financial Statements

Earnings Per Share [Text Block]

6. Earnings per share

Basic earnings per share (EPS) is computed by dividing net income available to common shareholders by the weighted-average number of common shares outstanding for the period. Diluted EPS is computed in the same manner as basic EPS but also reflects the potential dilution that could occur from the grant of stock-based compensation awards. The Company maintains one active share-based compensation plan that may generate additional potentially dilutive common shares. For granted and unexercised stock-settled stock appreciation rights (SSARs), dilution would occur if Company-issued SSARs were exercised and converted into common stock. As of the three and six months ended June 30, 2023, there were 17,725 and 18,983 potentially dilutive shares related to issued and unexercised SSARs compared to 17,094 and 20,406 for the same 2022 periods, respectively. The calculation did not include 46,423 weighted average unexercised SSARs that could potentially dilute earnings per share but their effect was antidilutive as of the three and six months ended June 30, 2023. For restricted stock, dilution would occur from the Company’s previously granted but unvested shares. There were 15,978 and 18,882 potentially dilutive shares related to unvested restricted share grants as of the three and six months ended June 30, 2023 compared to 10,360 and 12,042 for the same 2022 periods, respectively. The calculation did not include 43,177 and 23,726 weighted average unvested restricted shares that could potentially dilute earnings per share but their effect was antidilutive as of the three and six months ended June 30, 2023.

In the computation of diluted EPS, the Company uses the treasury stock method to determine the dilutive effect of its granted but unexercised stock options and SSARs and unvested restricted stock. Under the treasury stock method, the assumed proceeds, as defined, received from shares issued in a hypothetical stock option exercise or restricted stock grant, are assumed to be used to purchase treasury stock. Proceeds include amounts received from the exercise of outstanding stock options and compensation cost for future service that the Company has not yet recognized in earnings. The Company does not consider awards from share-based grants in the computation of basic EPS.

The following table illustrates the data used in computing basic and diluted EPS for the periods indicated:

		Three months ended June 30,								Six months ended June 30,
		*2023*				2022				*2023*				2022
(dollars in thousands except per share data)
Basic EPS:
Net income available to common shareholders		$	5,362			$	7,664			$	12,402			$	15,187
Weighted-average common shares outstanding			5,670,769				5,658,854				5,660,255				5,657,033
Basic EPS		$	0.95			$	1.35			$	2.19			$	2.68

Diluted EPS:
Net income available to common shareholders		$	5,362			$	7,664			$	12,402			$	15,187
Weighted-average common shares outstanding			5,670,769				5,658,854				5,660,255				5,657,033
Potentially dilutive common shares			33,703				27,454				37,865				32,448
Weighted-average common and potentially dilutive shares outstanding			5,704,472				5,686,308				5,698,120				5,689,481
Diluted EPS		$	0.94			$	1.35			$	2.18			$	2.67