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 2018 or 2017. Included in the diluted EPS for June 30, 2018 is the impact of the full conversion of the Company’s depository shares. Based upon the current conversion price of $10.3238, the 1,500,000 outstanding depository shares are convertible into an aggregate of 1,452,954 common shares. The average number of common shares used in the computation of basic and diluted earnings per share were:

	Three Months Ended June 30,
($ and outstanding shares in thousands - except per share data)	2018		2017

Distributed earnings allocated to common shares	$	522	$	344
Undistributed earnings allocated to common shares		2,337		1,727

Net earnings allocated to common shares		2,859		2,071
Net earnings allocated to participating securities		4		2
Dividends on convertible preferred shares		244		244

Net Income allocated to common shares and participating securities	$	3,107	$	2,317

Weighted average shares outstanding for basic earnings per share		6,489		4,827
Dilutive effect of stock compensation		61		65
Dilutive effect of convertible shares		1,453		1,459

Weighted average shares outstanding for diluted earnings per share		8,003		6,351

Basic earnings per common share	$	0.45	$	0.43

Diluted earnings per common share	$	0.40	$	0.37

	Six Months Ended June 30,
($ and outstanding shares in thousands - except per share data)	2018		2017

Distributed earnings allocated to common shares	$	1,008	$	663
Undistributed earnings allocated to common shares		4,057		3,153

Net earnings allocated to common shares		5,065		3,816
Net earnings allocated to participating securities		7		6
Dividends on convertible preferred shares		488		488

Net Income allocated to common shares and participating securities	$	5,560	$	4,310

Weighted average shares outstanding for basic earnings per share		5,935		4,839
Dilutive effect of stock compensation		66		69
Dilutive effect of convertible shares		1,453		1,458

Weighted average shares outstanding for diluted earnings per share		7,454		6,366

Basic earnings per common share	$	0.85	$	0.79

Diluted earnings per common share	$	0.75	$	0.68