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. Included in the diluted EPS for March 31, 2018 are the impact of the full conversion of the Company’s depositary shares. Based upon the current conversion price of $10.2374, the 1,500,000 outstanding depositary shares are convertible into an aggregate of 1,465,222 common shares. There were no anti-dilutive shares in 2018 or 2017. The average number of common shares used in the computation of basic and diluted earnings per share were:

	Three Months Ended Mar., 31
($ in thousands - except per share data)	2018		2017

Distributed earnings allocated to common shares	$	486	$	319
Undistributed earnings allocated to common shares		1,720		1,427

Net earnings allocated to common shares		2,206		1,746
Net earnings allocated to participating securities		3		3
Dividends on convertible preferred shares		244		244

Net Income allocated to common shares and participating securities	$	2,453	$	1,993

Weighted average shares outstanding for basic earnings per share		5,519		4,855
Dilutive effect of stock compensation		72		74
Dilutive effect of convertible shares		1,464		1,458

Weighted average shares outstanding for diluted earnings per share		7,055		6,387

Basic earnings per common share	$	0.40	$	0.36

Diluted earnings per common share	$	0.35	$	0.31