Earnings per Share

9 Months Ended

Sep. 30, 2015

The following table sets forth the computation of basic and diluted earnings per share using the two class method (in thousands, except per share data):



	Three months ended September 30,				Nine months ended September 30,
	2015		2014		2015		2014
Distributed earnings allocated to common stock	$	6,362	$	6,073	$	19,086	$	18,220
Undistributed earnings allocated to common stock	4,125		5,673		21,040		19,809
Net earnings allocated to common shareholders	$	10,487	$	11,746	$	40,126	$	38,029

Average shares outstanding	15,178		15,363		15,111		15,509
Effect of dilutive securities:
Warrant outstanding	—		62		37		62
Employee stock awards	20		20		21		23
Shares for diluted earnings per share	15,198		15,445		15,169		15,594

Basic earnings per share	$	0.69	$	0.76	$	2.66	$	2.45
Diluted earnings per share	$	0.69	$	0.76	$	2.65	$	2.44

During the nine months ended September 30, 2015 there were no anti-dilutive options outstanding. Options to purchase approximately 13,953 shares of common stock at an exercise price of $44.43 per share were outstanding during the third quarter of 2014 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.