Earnings Per Share

12 Months Ended

Dec. 31, 2015

Note 2: Earnings Per Share

Earnings per common share (EPS) is computed using the two-class method. Basic earnings per common share is computed by dividing net income available to common shareholders by the weighted-average number of common shares outstanding during the applicable period, excluding participating securities. Participating securities include non-vested restricted stock awards. Non-vested restricted stock awards are considered participating securities to the extent the holders of these securities receive non-forfeitable dividends at the same rate as holders of common stock. Diluted earnings per common share is computed using the weighted-average number of shares determined for the basic earnings per common share plus the convertible impact of preferred shares and the dilutive effect of stock compensation using the treasury stock method. EPS for the years ended December 31, 2015 and 2014 is computed as follows:

($ in thousands - except per share data)	2015		2014
Distributed earnings allocated to common shares	$	982	$	783
Undistributed earnings allocated to common shares		5,676		4,477
Net earnings allocated to common shares		6,663		5,260
Net earnings allocated to participating securities		5		3
Dividends on convertible preferred shares		956		-
Net Income allocated to common shares and participating securities	$	7,619	$	5,263

Weighted average shares outstanding for basic earnings per share		4,884		4,874
Dilutive effect of stock compensation		88		68
Dilutive effect of convertible shares		1,451		-
Weighted average shares outstanding for diluted earnings per share		6,423		4,942

Basic earnings per common share	$	1.36	$	1.08
Diluted earnings per common share	$	1.19	$	1.07

Shares subject to issue upon exercise of options of 35,424 and 171,470 in 2015 and 2014, respectively, at prices of $11.50 to $14.15 were excluded from the diluted earnings per common share calculation as they were anti-dilutive.