Calculation of Basic and Diluted Earnings per Share

12 Months Ended

Dec. 31, 2012

Income Per Common Share

Calculation of Basic and Diluted Earnings per Share

10. Calculation of Basic and Diluted Earnings per Share

(in thousands, except per share amounts)		Year Ended December 31,
		2012		2011		2010
Numerator:
Net Income (Loss)	$	5,028	$	3,836	$	2,288
Preferred stock dividends		-		(16)		(60)
Numerator for basic earnings per share - income (loss) available to common shareholders		5,028		3,820		2,228
Effect of dilutive securities:		22		103		90
Numerator for diluted earnings per share - income (loss) available to common shareholders after assumed conversions	$	5,050	$	3,923	$	2,318
Denominator:
Denominator for basic earnings per share - weighted-average shares		2,781		2,079		1,904
Effect of dilutive securities
Employee stock options		30		35		13
Warrants		447		533		302
6% Convertible Debentures		136		551		566
Preferred stock		-		37		-
Dilutive potential common shares		613		1,119		881
Denominator for diluted earnings per share - weighted-average shares and assumed conversions		3,394		3,235		2,785
Basic earnings per common share:
Net Income (Loss)	$	1.81	$	1.84	$	1.17
Diluted earnings per common share:
Net Income (Loss)	$	1.49	$	1.21	$	0.83

Excluded from the calculation of diluted earnings per share were a total of 111,111 common shares issuable upon conversion of the 200,000 convertible preferred shares for the year ended December 31, 2010.  The convertible preferred shares were not included in the computation of diluted earnings per share as the conversion price was greater than the average market price of the common shares and, therefore, the effect would be antidilutive.  For the years ended December 31, 2012 and 2011, there were no convertible preferred shares excluded from the calculation of diluted earnings per share as all were converted to common stock during 2011.

For the years ended December 31, 2012, 2011 and 2010, there were no convertible debentures excluded from the calculation of diluted earnings per share.

For the years ended December 31, 2012, 2011 and 2010, there were no warrants excluded from the calculation of diluted earnings per share.

For the years ended December 31, 2012, 2011 and 2010, stock options excluded from diluted earnings per share were 77,820, 24,320 and 151,985, respectively.  The options were excluded from the computation of diluted earnings per share because the exercise price was greater than the average market price of the common shares and, therefore, the effect would be antidilutive.