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 September 30, 2018 is the impact of the full conversion of the Company’s depository shares. Based upon the current conversion price of $10.2059, the 1,499,500 outstanding depository shares are convertible into an aggregate of 1,469,247 common shares. The average number of common shares used in the computation of basic and diluted earnings per share were:

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

Distributed earnings allocated to common shares	$	524	$	340
Undistributed earnings allocated to common shares		2,346		2,136

Net earnings allocated to common shares		2,870		2,476
Net earnings allocated to participating securities		4		3
Dividends on convertible preferred shares		244		244

Net Income allocated to common shares and participating securities	$	3,118	$	2,723

Weighted average shares outstanding for basic earnings per share		6,503		4,797
Dilutive effect of stock compensation		58		70
Dilutive effect of convertible shares		1,461		1,459

Weighted average shares outstanding for diluted earnings per share		8,022		6,326

Basic earnings per common share	$	0.45	$	0.52

Diluted earnings per common share	$	0.39	$	0.43

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

Distributed earnings allocated to common shares	$	1,532	$	999
Undistributed earnings allocated to common shares		6,404		5,294

Net earnings allocated to common shares		7,936		6,293
Net earnings allocated to participating securities		11		9
Dividends on convertible preferred shares		732		731

Net Income allocated to common shares and participating securities	$	8,679	$	7,033

Weighted average shares outstanding for basic earnings per share		6,106		4,825
Dilutive effect of stock compensation		63		73
Dilutive effect of convertible shares		1,457		1,458

Weighted average shares outstanding for diluted earnings per share		7,626		6,356

Basic earnings per common share	$	1.30	$	1.31

Diluted earnings per common share	$	1.14	$	1.11