Note K – Earnings per Share

The following table sets forth the computation of basic and diluted earnings per share:

	Three Months Ended June 30,		Six Months Ended June 30,
(In thousands, except per share data)	2011	2010	2011	2010

Distributed earnings allocated to common stock	$ 5,092	$ 5,274	$ 10,184	$ 10,549
Undistributed earnings allocated to common stock	4,669	5,373	9,123	9,355
Net earnings allocated to common shareholders	$ 9,761	$ 10,647	$ 19,307	$ 19,904

Average shares outstanding	15,120	15,656	15,244	15,722

Effect of dilutive securities:
Employee stock options	73	65	78	63

Shares for diluted earnings per share	15,193	15,721	15,322	15,785

Basic earnings per share	$ 0.65	$ 0.68	$ 1.27	$ 1.27
Diluted earnings per share	$ 0.64	$ 0.68	$ 1.26	$ 1.26

Options to purchase 133,000 and 113,054 shares of common stock at an exercise price between $33.54 and $40.88 and between $33.54 and $40.88 per share were outstanding during the second quarter of 2011 and the second quarter of 2010, respectively, but were not included in the computation of diluted earnings per share because the options' exercise price was greater than the average market price of the common shares and therefore, the effect would have been anti-dilutive.