Earnings Per Common Share

3 Months Ended

Mar. 31, 2023

EARNINGS PER COMMON SHARE

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 ASC No. 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 and warrants with proceeds used to purchase treasury shares at the average market price for the period.

Earnings per share for the three months ended March 31, 2023 and 2022 were calculated as follows (dollars in thousands, except share and per share data):


	Three Months Ended March 31,
		2023		2022
Net income		$	4,157	4,523
Less allocation of earnings and dividends to participating securities		30		24
Net income allocated to common shareholders		$	4,127	4,499

Weighted average common shares outstanding, gross		11,270,010		11,878,451
Less average participating securities		80,840		59,837
Weighted average number of shares outstanding used in the calculation of basic earnings per common share		11,189,170		11,818,614
Add dilutive effect of:
Stock options		—		—
Adjusted weighted average number of shares outstanding used in the calculation of diluted earnings per common share		11,189,170		11,818,614

Earnings per common share:
Basic		$	0.37	0.38
Diluted		0.37		0.38