NOTE 2—EARNINGS PER SHARE

Earnings per share (EPS) have been computed based on the weighted average number of common shares outstanding during the periods presented. There were no anti-dilutive shares in 2017. For the period ended June 30, 2016, share-based awards totaling 33,924 common shares were not considered in computing diluted EPS as they were anti-dilutive. Included in the diluted EPS for June 30, 2017 is the impact of the full conversion of the Company’s depository shares. Based upon the current conversion price of $10.2784, the 1,500,000 outstanding depository shares are convertible into an aggregate of 1,459,376 common shares. The average number of common shares used in the computation of basic and diluted earnings per share were:

	Three Months Ended Jun., 30
($ in thousands - except per share data)	2017		2016

Distributed earnings allocated to common shares	$	344	$	296
Undistributed earnings allocated to common shares		1,727		1,723

Net earnings allocated to common shares		2,071		2,019
Net earnings allocated to participating securities		2		2
Dividends on convertible preferred shares		244		244

Net Income allocated to common shares and participating securities	$	2,317	$	2,265

Weighted average shares outstanding for basic earnings per share		4,827		4,893
Dilutive effect of stock compensation		65		45
Dilutive effect of convertible shares		1,459		1,452

Weighted average shares outstanding for diluted earnings per share		6,351		6,390

Basic earnings per common share	$	0.43	$	0.41

Diluted earnings per common share	$	0.36	$	0.35

	Six Months Ended Jun., 30
($ in thousands - except per share data)	2017		2016

Distributed earnings allocated to common shares	$	663	$	566
Undistributed earnings allocated to common shares		3,153		2,861

Net earnings allocated to common shares		3,816		3,427
Net earnings allocated to participating securities		6		5
Dividends on convertible preferred shares		488		488

Net Income allocated to common shares and participating securities	$	4,310	$	3,920

Weighted average shares outstanding for basic earnings per share		4,839		4,894
Dilutive effect of stock compensation		69		50
Dilutive effect of convertible shares		1,458		1,452

Weighted average shares outstanding for diluted earnings per share		6,366		6,396

Basic earnings per common share	$	0.79	$	0.70

Diluted earnings per common share	$	0.68	$	0.61