EARNINGS PER SHARE

6 Months Ended

Jun. 30, 2012

EARNINGS PER SHARE

NOTE 2 – EARNINGS PER SHARE

Basic earnings per common share (“EPS”) excludes dilution and is computed by dividing net income applicable to common stock by the weighted average number of common shares outstanding for the year. Diluted EPS reflects the potential dilution that could occur if certain securities or other contracts to issue common stock (such as stock options) were exercised or converted into additional common shares that would then share in the earnings of the Company. Diluted EPS is computed by dividing net income applicable to common stock by the weighted average number of common shares outstanding for the year, plus an incremental number of common-equivalent shares computed using the treasury stock method. The following table sets forth the computation of basic and diluted earnings per share under the two-class method, as unvested share-based payment awards include the nonforfeitable right to receive dividends and therefore are considered participating securities:

	Three Months Ended June 30,				Six Months Ended June 30,
	2012		2011		2012		2011
Net income, as reported	$	6,412	$	7,070	$	12,995	$	13,409
Weighted-average common shares outstanding – basic		7,675,819		7,677,594		7,673,927		7,668,831
Dilutive effect of stock-based compensation		11,801		9,539		12,820		10,467
Weighted-average common and potential common shares – diluted		7,687,620		7,687,133		7,687,747		7,679,298
Basic earnings per share – common stock	$	0.84	$	0.92	$	1.69	$	1.75
Basic earnings per share – unvested share-based payment awards		0.81		0.88		1.55		1.64
Diluted earnings per share – common stock		0.83		0.92		1.69		1.75
Diluted earnings per share– unvested share-based payment awards		0.83		0.92		1.69		1.75

For the three-month and six-month periods ended June 30, 2012, options to purchase 75,000 and 50,000 shares, respectively, of common stock were not considered in the computation of potential common shares for purposes of diluted EPS, since the exercise prices of the options were greater than the average market price of the common stock for the respective periods. For the three-month and six-month periods ended June 30, 2011, options to purchase 77,750 and 53,750 shares, respectively, of common stock were not considered in the computation of potential common shares for purposes of diluted EPS, since the exercise prices of the options were greater than the average market price of the common stock for the respective periods.