NOTE 5 – EARNINGS PER SHARE

Basic earnings per share are calculated by dividing net income by the weighted average number of shares of common stock outstanding during the period. Diluted earnings per share reflect additional common shares that would have been outstanding if dilutive potential common shares (unvested restricted stock grants and stock options) had been issued, as well as any adjustment to income that would result from the assumed issuance of potential common shares that may be issued by us. Potential common shares related to stock options are determined using the treasury stock method.


	Three Months Ended March 31, 2020					Three Months Ended March 31, 2019
	Income		Shares	Per Share		Income		Shares	Per Share
(Dollars in thousands, except share and per share data)	(Numerator)		(Denominator)	Amount		(Numerator)		(Denominator)	Amount
Shares Outstanding (weighted average)			9,259,825					9,416,987
Shares held by Rabbi Trust			95,027					99,029
Shares liability under deferred compensation agreement			(95,027)					(99,029)
Basic earnings per share:
Net earnings applicable to common stockholders	$	5,128	9,259,825	$	0.55	$	5,823	9,416,987	$	0.62
Effect of dilutive securities:
Unvested stock awards		—	44,792				-	43,131
Diluted earnings per share:
Net income applicable to common stockholders and assumed conversions	$	5,128	9,304,617	$	0.55	$	5,823	9,460,118	$	0.62

There were 38,390 shares of options outstanding during the three months ended March 31, 2020 and no shares of options outstanding during the three months ended March 31, 2019, which were not included in the computation of diluted earnings per share because to do so would have been anti-dilutive.