Note

Earnings per share

The Company is required to present basic earnings per share and diluted earnings per share in its Consolidated Statements of Income. Basic earnings per share amounts are computed by dividing net income by the weighted average number of common shares outstanding. Diluted earnings per share reflects additional common shares that would have been outstanding if potentially dilutive 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 to outstanding unvested RSAs granted to directors and employees. The dilutive effect resulting from these potential shares is determined using the treasury stock method. The Company is also required to provide a reconciliation of the numerator and denominator used in the computation of both basic and diluted earnings per share.

The following table summarizes the computation of basic and diluted earnings per share for the

three

and

nine

months ended

September

30,

2018

and

2017:

(Net income in thousands)	Three Months Ended September 30,				Nine Months Ended September 30,
	2018		2017		2018		2017
Basic earnings per share:
Net income attributable to Common shareholders	$	769		1,013		2,870		3,547
Divided by:
Weighted average shares outstanding		3,904,751		3,894,237		3,903,056		3,893,702

Basic earnings per common share	$	0.20		0.26		0.74		0.91

Diluted earnings per share:
Net income attributable to Common shareholders	$	769		1,013		2,870		3,547

Weighted average shares outstanding		3,904,751		3,894,237		3,903,056		3,893,702

Effect of potentially dilutive restricted common shares		14,067		9,193		17,974		4,854

Divided by:
Weighted average diluted shares outstanding		3,918,818		3,903,430		3,921,030		3,898,556

Diluted earnings per common share	$	0.20		0.26		0.73		0.91