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Earnings Per Share

3 Months Ended

Jun. 30, 2017

3. Earnings Per Share

The Company has granted stock compensation awards with nonforfeitable dividend rights which are considered participating securities. As such, earnings per share is calculated using the two-class method. Basic earnings per share is calculated by dividing net income allocated to common shareholders by the weighted average number of common shares outstanding during the period, which excludes the participating securities. Diluted earnings per share includes the dilutive effect of additional potential common shares from stock compensation awards. Earnings per share have been computed based on the following weighted average number of common shares outstanding:


	Three months ended June 30, (In thousands, except per share amounts)
	2017			2016
Numerator:
Net income per consolidated statements of income	$	813		$	2,903
Less: Allocation of earnings to participating securities		(14	)		(30	)

Net income allocated to common stock		799			2,873

Basic earnings per share computation:
Net income allocated to common stock	$	799		$	2,873

Weighted average common shares outstanding, including shares considered participating securities		7,851			7,753
Less: Weighted average participating securities outstanding		(131	)		(81	)

Weighted average shares of common stock		7,720			7,672

Basic earnings per share	$	0.10		$	0.37

Diluted earnings per share computation:
Net income allocated to common stock	$	799		$	2,873
Undistributed earnings re-allocated to participating securities		—			—

Numerator for diluted earnings per share	$	799		$	2,873

Weighted average common shares outstanding for basic earnings per share		7,720			7,672
Incremental shares from stock options		53			60

Weighted average shares and dilutive potential common shares		7,773			7,732

Diluted earnings per share	$	0.10		$	0.37

Diluted earnings per share do not include the effect of certain stock options as their impact would be anti-dilutive. For the three months ended June 30, 2017 and 2016, potential shares of common stock from stock options totaling 155,000 and 165,000, respectively, were not included in the diluted earnings per share calculation because their effect is anti-dilutive.