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, 2017 and 2016, there were no outstanding stock options to include in the diluted earnings per share calculations.

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 unvested stock awards are participating securities.

The computation of basic and diluted earnings per share is shown below:


	Three months ended						Nine months ended
	September 30,						September 30,
	2017			2016			2017			2016
Basic earnings per common share computation:
Net income per consolidated statements of income	$	7,246		$	6,416		$	20,409		$	15,500
Net earnings allocated to participating securities		(40	)		(40	)		(120	)		(101	)

Net earnings allocated to common stock	$	7,206		$	6,376		$	20,289		$	15,399

Distributed earnings allocated to common stock	$	2,506		$	2,370		$	7,521		$	7,107
Undistributed earnings allocated to common stock		4,700			4,006			12,768			8,292

Net earnings allocated to common stock	$	7,206		$	6,376		$	20,289		$	15,399

Weighted average common shares outstanding, including shares considered participating securities		15,285			14,464			15,188			14,453
Less: Average participating securities		(78	)		(82	)		(84	)		(85	)

Weighted average shares		15,207			14,382			15,104			14,368

Basic earnings per common share	$	0.47		$	0.44		$	1.34		$	1.07

Diluted earnings per common share computation:
Net earnings allocated to common stock	$	7,206		$	6,376		$	20,289		$	15,399

Weighted average shares and dilutive potential common shares		15,207			14,382			15,104			14,368

Diluted earnings per common share	$	0.47		$	0.44		$	1.34		$	1.07