Earnings Per Common Share

3 Months Ended

Mar. 31, 2014

Earnings Per Share [Abstract]

Earnings Per Common Share

Earnings Per Common Share

The Corporation calculates earnings per common share (EPS) using the two-class method. The two-class method allocates net income to each class of Common Stock and participating security according to the common dividends declared and participation rights in undistributed earnings. Participating securities consist of unvested stock-based payment awards that contain nonforfeitable rights to dividends. The Corporation also uses the treasury stock method to calculate dilutive EPS. The treasury stock method assumes that the Corporation uses the proceeds from a hypothetical exercise of options to repurchase Common Stock at the average market price during the period. The reconciliation between basic and diluted earnings per share is presented as follows(Dollars in thousands, except per share data) :

	Three Months Ended
	March 31, 2014		March 31, 2013
Basic EPS
Net income	$	1,606	$	1,113
Less:
Preferred stock dividend and accretion	35		257
Income allocated to participating securities	6		11
Net income allocated to common shareholders	$	1,565	$	845
Average common shares outstanding	9,668,297		8,201,120
Less: participating shares included in average common shares outstanding	53,169		117,031
Average common shares outstanding used in basic EPS	9,615,128		8,084,089
Basic net income per common share	$	0.16	$	0.10
Diluted EPS:
Income used in diluted earnings per share calculation	$	1,565	$	845
Average common shares outstanding	9,668,297		8,201,120
Add: Common Stock equivalents:
Stock Options	37,135		10,918
Average common stock shares outstanding	9,705,432		8,212,038
Diluted earnings per common share	$	0.16	$	0.10

For the three months ended March 31, 2014, approximately 172,000 of options to purchase shares of common stock were not included in the computation of diluted earnings per share because the effect would be antidilutive. For the three months ended March 31, 2013, approximately 194,500 of options to purchase shares of common stock were not included in the computation of diluted earnings per share because the effect would be antidilutive.