4. Earnings Per Common Share

Basic earnings per share include only the weighted average common shares outstanding. Diluted earnings per share include the weighted average common shares outstanding and any potentially dilutive common stock equivalent shares in the calculation. Treasury shares are treated as retired for earnings per share purposes. Options and warrants to purchase 103,570 common shares, at exercise prices ranging from $3.23 to $5.75, and 261,583 common shares, at exercise prices ranging from $2.57 to $6.10, were outstanding as of March 31, 2013 and 2012, respectively, but were not included in the computation of diluted earnings per common share because to do so would be antidilutive. Dividends on preferred shares are deducted from net income in the calculation of earnings per common share.


	Three months ended March 31,
	2013		2012
	(In thousands, except per share data)
Numerator:
Net income	$	1,056	$	1,565
Preferred stock dividends		52		263
Net income available to common shareholders	$	1,004	$	1,302
Denominator:
Weighted average common shares outstanding (basic)		19,168		20,679
Effect of stock options		89		43
Weighted average common shares outstanding (diluted)		19,257		20,722
Earnings per common share:
Basic	$	0.05	$	0.06
Diluted		0.05		0.06

- Definition

The entire disclosure for earnings per share.

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