Earnings Per Share

9 Months Ended

Sep. 30, 2012

Earnings Per Share [Abstract]

EARNINGS PER SHARE

7. EARNINGS PER SHARE

Basic earnings per share is computed by dividing net income by the weighted average number of shares outstanding during the applicable period, excluding outstanding participating securities. Diluted earnings per share is computed using the weighted average number of shares determined for the basic computation plus the dilutive effect of potential common shares issuable under certain stock compensation plans. For the three and nine months ended September 30, 2012, 37,500 shares issuable pursuant to outstanding stock options under stock compensation plans were excluded from the diluted earnings per share calculations because the strike prices associated with the options exceeded the market price of the Corporation’s common stock thus making the shares anti-dilutive. For the three and nine months ended September 30, 2011, 107,375 and 75,500 shares issuable pursuant to outstanding stock options were excluded from the diluted earnings per share calculations because the strike prices associated with the options exceeded the market price of the Corporation’s common stock thus making the shares anti-dilutive.

Unvested share-based payment awards that contain nonforfeitable rights to dividends or dividend equivalents (whether paid or unpaid) are participating securities and are included in the computation of earnings per share pursuant to the two-class method. The Corporation has determined that its outstanding non-vested stock awards are participating securities.

The computation of basic and diluted earnings per share is shown below (in thousands except share and per share data):

	Three months ended September 30,						Nine months ended September 30,
	2012			2011			2012			2011
Net income per consolidated statements of income	$	4,563		$	4,067		$	13,246		$	11,235
Net earnings allocated to participating securities		(17	)		(12	)		(50	)		(34	)
Net earnings allocated to common stock	$	4,546		$	4,055		$	13,196		$	11,201
Basic earnings per common share computation:
Distributed earnings allocated to common stock	$	2,045		$	2,025		$	6,130		$	6,064
Undistributed earnings allocated to common stock		2,501			2,030			7,066			5,137
Net earnings allocated to common stock	$	4,546		$	4,055		$	13,196		$	11,201
Weighted average common shares outstanding, including shares considered participating securities		12,448			12,315			12,430			12,290
Less: Average participating securities		(41	)		(31	)		(42	)		(35	)
Weighted average shares		12,407			12,284			12,388			12,255
Basic earnings per common share	$	0.37		$	0.33		$	1.07		$	0.91
Diluted earnings per common share computation:
Net earnings allocated to common stock	$	4,546		$	4,055		$	13,196		$	11,201
Weighted average common shares outstanding for basic earnings per common share		12,407			12,284			12,388			12,255
Add: Dilutive effects of assumed exercises of stock options		4			6			4			7
Weighted average shares and dilutive potential common shares		12,411			12,290			12,392			12,262
Diluted earnings per common share	$	0.37		$	0.33		$	1.06		$	0.91