Earnings Per Share

9 Months Ended

Sep. 30, 2014

Earnings Per Share

3. Earnings Per Share. Basic earnings per share for each period is computed using the weighted average number of common shares outstanding during such period. Unvested restricted shares are excluded from outstanding shares for purposes of this calculation. Diluted earnings per share is computed using the weighted average number of common and potentially dilutive securities outstanding during the period. Potentially dilutive securities consist of the incremental common shares issuable upon the exercise of stock options and unvested restricted shares (using the treasury stock method). Potentially dilutive securities are excluded from the computation if their effect is anti-dilutive. For the three and nine months ended September 30, 2014, options to purchase 87,000 shares of common stock and 379,657 restricted shares were excluded from the computation of diluted earnings per share. For the three and nine months ended September 30, 2013, options to purchase 107,000 shares of common stock and 357,593 restricted shares were excluded from the computation of diluted earnings per share. These options and restricted shares were excluded because either (i) their respective exercise prices were greater than the average market price of the Company’s common stock during these periods, or (ii) the inclusion, in the calculation of common stock equivalents under the treasury method, of the unvested compensation expense attributable to those options or restricted shares would have been anti-dilutive.

The table which follows sets forth the manner in which diluted earnings per common share for the three and nine month periods ended September 30, 2014 and 2013 were calculated.

	Three Months Ended September 30,				Nine Months Ended September 30,
	2014		2013		2014		2013
	(In thousands)
Numerator:
Net earnings	$	582	$	487	$	631	$	645
Denominator:
Weighted average shares outstanding(1)		4,936		4,712		4,896		4,679
Dilutive effect of stock options and non-vested restricted shares		4		92		25		81
Denominator for diluted net earnings per share		4,940		4,804		4,921		4,760

(1) Does not include unvested restricted shares.