Earnings Per Common Share

9 Months Ended

Sep. 30, 2011

Earnings Per Common Share

Basic earnings (loss) per common share is computed by dividing net income (loss) available to common shareholders by the weighted-average number of common shares outstanding. Diluted earnings (loss) per common share is computed by dividing net income (loss) available to common shareholders by the weighted-average number of common shares outstanding adjusted to include the effect of potentially dilutive common shares. Potentially dilutive common shares include incremental common shares issuable upon exercise of outstanding stock options, SARs and non-vested restricted common shares using the treasury stock method. As disclosed in Note 5, Peoples had a Warrant to purchase 313,505 common shares outstanding at September 30, 2011. This Warrant was excluded from the calculation of diluted earnings (loss) per common share since it was anti-dilutive. In addition, stock options and SARs covering 248,093 and 251,319 common shares were excluded from the calculations for the nine months ended September 30, 2011 and 2010, respectively, since they were anti-dilutive.

The calculation of basic and diluted earnings (loss) per common share was as follows:



	Three Months Ended					Nine Months Ended
	September 30,					September 30,
(Dollars in thousands, except per common share data)	2011		2010			2011		2010
Net income	$	3,921	$	413		$	8,711	$	5,013
Preferred dividends	237		514			998		1,539
Net income (loss) available to common shareholders	$	3,684	$	(101	)	$	7,713	$	3,474
Weighted-average common shares outstanding	10,484,609		10,437,770			10,478,310		10,417,316
Effect of potentially dilutive common shares	35,064		—			20,398		8,147
Total weighted-average diluted common shares outstanding	10,519,673		10,437,770			10,498,708		10,425,463
Earnings (loss) per common share:
Basic	$	0.35	$	(0.01	)	$	0.74	$	0.33
Diluted	$	0.35	$	(0.01	)	$	0.73	$	0.33