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Earnings Per Share
9 Months Ended
Sep. 30, 2012
Earnings Per Share  
Earnings Per Share

 

2) Earnings Per Share

        Basic earnings per common share is computed by dividing net income, less dividends and discount accretion on preferred stock, by the weighted average common shares outstanding. On June 21, 2010, the Company issued to various institutional investors 21,004 shares of Series C Convertible Perpetual Preferred Stock ("Series C Preferred Stock"). The Series C Preferred Stock is convertible into 5,601,000 shares of common stock when transferred in accordance with its terms. The Series C Preferred Stock participate in the earnings of the Company and, therefore, the shares issued on the conversion of the Series C Preferred Stock are considered outstanding under the two-class method of computing basic earnings per common share during periods of earnings. Diluted earnings per share reflect potential dilution from outstanding stock options and common stock warrants, using the treasury stock method. The common stock warrant was antidilutive at September 30, 2012 and 2011. A reconciliation of these factors used in computing basic and diluted earnings per common share is as follows:

 
  For the Three Months Ended
September 30,
  For the Nine Months Ended
September 30,
 
 
  2012   2011   2012   2011  
 
  (Dollars in thousands, except per share data)
 

Net income available to common shareholders

  $ 2,486   $ 4,285   $ 6,034   $ 6,752  

Less: net income allocated to Series C Preferred Stock

    436     752     1,059     1,187  
                   

Net income allocated to common shareholders

  $ 2,050   $ 3,533   $ 4,975   $ 5,565  
                   

Weighted average common shares outstanding for basic earnings per common share

    26,312,263     26,295,001     26,297,359     26,257,112  

Dilutive effect of stock options oustanding, using the the treasury stock method

    30,776     2,274     27,096     4,443  
                   

Shares used in computing diluted earnings per common share

    26,343,039     26,297,275     26,324,455     26,261,555  
                   

Basic earnings per share

 
$

0.08
 
$

0.13
 
$

0.19
 
$

0.21
 

Diluted earnings per share

  $ 0.08   $ 0.13   $ 0.19   $ 0.21