Earnings Per Share

9 Months Ended

Sep. 30, 2013

2. Earnings Per Share

Basic earnings per share represents income available to common stockholders divided by the weighted average number of common shares outstanding during the period. Diluted earnings per share reflects additional common shares that would have been outstanding if dilutive potential common shares had been issued, as well as any adjustment to income that would result from the assumed issuance. Potential common shares that may be issued by the Company relate solely to outstanding stock options and are determined using the treasury stock method.

The following table sets forth the weighted average shares outstanding used in the computations of basic and diluted earnings per share. All share and per share data has been adjusted to reflect the retroactive effect of the 10% stock dividend declared during the period ending March 31, 2013.

(in thousands)



	Three Months Ended		Nine Months Ended
	September 30,		September 30,
	2013	2012	2013	2012
Basic EPS weighted average shares outstanding	3,626	3,606	3,624	3,607
Dilutive effect of stock options	12	9	13	5
Diluted EPS weighted average shares outstanding	3,638	3,615	3,637	3,612

Stock options which had no intrinsic value, because their effect would be anti-dilutive and therefore would not be included in the diluted EPS calculation were 0 and 66,000 as of September 30, 2013 and 2012, respectively, based upon the closing prices of Norwood common stock of $28.95 and $27.45 per share on September 30, 2013 and 2012, respectively.

- Definition

The entire disclosure for earnings per share.

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