EARNINGS PER SHARE

12 Months Ended

Dec. 31, 2020

LCNB has granted restricted stock awards with non-forfeitable dividend rights, which are considered participating securities. Accordingly, earnings per share is computed using the two-class method as required by FASB ASC 260-10-45. Basic earnings per common 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 common share is adjusted for the dilutive effects of stock options, warrants, and restricted stock. The diluted average number of common shares outstanding has been increased for the assumed exercise of stock options with proceeds used to purchase treasury shares at the average market price for the period.

Earnings per share for the years ended December 31 were calculated as follows (in thousands, except share and per share data):


	2020		2019	2018
Net income	$	20,075	18,912	14,845
Less allocation of earnings and dividends to participating securities	45		31	18
Net income allocated to common shareholders	$	20,030	18,881	14,827

Weighted average common shares outstanding, gross	12,943,622		13,100,161	11,950,360
Less average participating securities	29,345		21,241	15,010
Weighted average number of shares outstanding used in the calculation of basic earnings per common share	12,914,277		13,078,920	11,935,350
Add dilutive effect of:
Stock options	307		3,973	6,903

Adjusted weighted average number of shares outstanding used in the calculation of diluted earnings per common share	12,914,584		13,082,893	11,942,253

Earnings per common share:
Basic	$	1.55	1.44	1.24
Diluted	1.55		1.44	1.24