Earnings Per Share

9 Months Ended

Sep. 30, 2015

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, 2015, there were no outstanding stock options to include in the diluted earnings per share calculation.

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

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


	Three months ended September 30,						Nine months ended September 30,
	2015			2014			2015			2014
Basic earnings per common share computation:
Net income per consolidated statements of income	$	5,522		$	5,548		$	16,689		$	16,331
Net earnings allocated to participating securities		(30	)		(23	)		(92	)		(70	)

Net earnings allocated to common stock	$	5,492		$	5,525		$	16,597		$	16,261

Distributed earnings allocated to common stock	$	2,363		$	2,359		$	7,095		$	7,109
Undistributed earnings allocated to common stock		3,129			3,166			9,502			9,152

Net earnings allocated to common stock	$	5,492		$	5,525		$	16,597		$	16,261

Weighted average common shares outstanding, including shares considered participating securities		14,406			14,368			14,408			14,421
Less: Average participating securities		(71	)		(53	)		(72	)		(55	)

Weighted average shares		14,335			14,315			14,336			14,366

Basic earnings per common share	$	0.38		$	0.39		$	1.16		$	1.13

Diluted earnings per common share computation:
Net earnings allocated to common stock	$	5,492		$	5,525		$	16,597		$	16,261

Weighted average common shares outstanding for basic earnings per common share		14,335			14,315			14,336			14,366
Add: Dilutive effects of assumed exercises of stock options		0			1			0			1

Weighted average shares and dilutive potential common shares		14,335			14,316			14,336			14,367

Diluted earnings per common share	$	0.38		$	0.39		$	1.16		$	1.13