EARNINGS PER COMMON SHARE

9 Months Ended

Sep. 30, 2011

EARNINGS PER COMMON SHARE [Abstract]

2. EARNINGS PER COMMON SHARE

Basic earnings per common share is computed by dividing income available to common stockholders by the weighted average number of common shares outstanding for the period. Income available to common stockholders is net income less preferred stock dividends and accretion of discount on preferred stock, treated as preferred stock dividends. Diluted earnings per common share reflects the potential dilution that would occur if the Company's outstanding stock options and warrants were exercised and converted into common stock and the Company's outstanding restricted stock was vested. The dilutive effect is computed using the treasury stock method, which assumes all outstanding stock options and warrants are exercised. The incremental shares issuable upon exercise of the stock options and warrants, to the extent they would have been dilutive, are included in the denominator of the diluted earnings per common share calculation. The calculation of earnings per common share and diluted earnings per common share for the three and nine months ended September 30, 2011 and 2010 is presented below.

	Three Months Ended September 30,				Nine Months Ended September 30,
	2011		2010		2011		2010
Basic earnings per common share:
Net Income	$	1,024,065	$	1,164,972	$	2,262,109	$	1,664,564
Preferred stock dividends and accretion of discount		132,482		132,230		397,253		396,508
Net income available to common stockholders	$	891,583	$	1,032,742	$	1,864,856	$	1,268,056
Weighted average common shares outstanding - basic		1,350,948		1,347,948		1,349,717		1,346,612
Basic earnings per common share	$	0.66	$	0.77	$	1.38	$	0.94

Diluted earnings per common share:
Net income available to common stockholders		891,583		1,032,742		1,864,856		1,268,056
Weighted average common shares outstanding - basic		1,350,948		1,347,948		1,349,717		1,346,612
Effect of dilutive securities:
Stock Options(1)		-		-		-		-
Restricted Stock		4,125		3,500		3,882		3,605
Common stock warrant(2)		8,686		-		7,105		2,819
Total diluted average common shares issued and outstanding		1,363,759		1,351,448		1,360,704		1,353,036
Diluted earnings (loss) per common share	$	0.65	$	0.76	$	1.37	$	0.94

1For the three and nine months ending September 30, 2011 and 2010, outstanding options to purchase common stock totaled 45,500 and 65,200, respectively. These options were not dilutive because the exercise price of the options exceeded the average closing price for theCompany's common stock.

2For the three months ending September 30, 2010, 99,157shares of common stock warrants were not dilutive because the excerise price of the common stock warrants exceeded the average closing price for the Company's common stock.