EARNINGS PER SHARE

9 Months Ended

Sep. 30, 2014

Earnings Per Share [Abstract]

EARNINGS PER SHARE

NOTE 6 – EARNINGS PER SHARE

The Company defines unvested share-based payment awards that contain nonforfeitable rights to dividends as participating securities that are included in computing Earnings Per Share (“EPS”) using the two-class method. The two-class method is an earnings allocation formula that determines earnings per share for each share of common stock and participating securities according to dividends declared and participation rights in undistributed earnings. Under this method, all earnings (distributed and undistributed) are allocated to common shares and participating securities based on their respective rights to receive dividends. Earnings per common share are calculated by dividing earnings allocated to common stockholders by the weighted-average number of common shares outstanding during the period. Basic EPS excludes dilution and is computed by dividing income allocated to common stockholders by the weighted-average number of common shares outstanding for the period. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the entity.

The following table sets forth the computation of earnings per share (basic and diluted) for the periods indicated:

	Three months						Nine months
Periods ended September 30, (in thousands)		2014			2013			2014			2013
Net income	$	768		$	1,016		$	2,285		$	3,103
Less: Preferred stock dividends declared		(40	)		(40	)		(126	)		(121	)
Net income available to common shareholders		728			976			2,159			2,982
Less: Undistributed earnings allocated to participating securities		(8	)		(11	)		(26	)		(31	)
Net income allocated to common stock	$	720		$	965		$	2,133		$	2,951
Common shares issued		1,713			1,710			1,713			1,707
Less: Unvested restricted stock awards		(20	)		(19	)		(21	)		(17	)
Common shares outstanding used to calculate basic earnings per common share		1,693			1,691			1,692			1,690
Add: Dilutive effect of unvested restricted stock awards		—			—			—			—
Common shares outstanding used to calculate diluted earnings per common share		1,693			1,691			1,692			1,690
Earnings per common share (basic and diluted)	$	0.43		$	0.57		$	1.26		$	1.75