Note 4 - Net Income (Loss) Per Common Share

9 Months Ended

Sep. 30, 2011

4. Net Income (Loss) Per Common Share

Basic net income (loss) per common share is determined by dividing net income (loss) available to common shareholders by the weighted average total number of common shares issued and outstanding. Net income (loss) available to common shareholders represents net income (loss) adjusted for preferred stock dividends including dividends declared, accretion of discounts on preferred stock issuances, and cumulative dividends related to the current dividend period that have not been declared as of the end of the period.

Diluted net income (loss) per common share is determined by dividing net income (loss) available to common shareholders by the total weighted average number of common shares issued and outstanding plus amounts representing the dilutive effect of stock options outstanding and outstanding warrants. The effects of stock options and outstanding warrants are excluded from the computation of diluted earnings per common share in periods in which the effect would be antidilutive. Dilutive potential common shares are calculated using the treasury stock method.

Net income (loss) per common share computations were as follows for the three and nine months ended September 30, 2011 and 2010.

	Three Months Ended September 30,						Nine Months Ended September 30,
(In thousands, except per share data)	2011			2010			2011			2010

Net income, basic and diluted	$	272		$	1,255		$	1,486		$	6,041
Preferred stock dividends and discount accretion		(474	)		(469	)		(1,419	)		(1,401	)
Net (loss) income available to common shareholders, basic and diluted	$	(202	)	$	786		$	67		$	4,640

Average common shares outstanding, basic and diluted		7,427			7,393			7,420			7,385

Net (loss) income per common share, basic and diluted	$	(.03	)	$	.11		$	.01		$	.63

For the three and nine months ended September 30, 2011, options to purchase 24,049 common shares were excluded from the computation of net (loss) income per common share and options to purchase 28,049 common shares were excluded for the three and nine months ended September 30, 2010 because they were antidilutive. There were 223,992 potential common shares associated with a warrant issued to the U.S. Treasury that were excluded from the computation of net (loss) income per common share for each of the periods presented because they were antidilutive.