EARNINGS PER SHARE

6 Months Ended

Jun. 30, 2018

EARNINGS PER SHARE

EARNINGS PER SHARE

2. EARNINGS PER SHARE

Financial Accounting Standards Board Accounting Standards Codification (“FASB ASC”) No. 260-10-45 addresses whether instruments granted in share-based payment transactions are participating securities prior to vesting and, therefore, need to be included in the earnings allocation in computing earnings per share (“EPS”).  The restricted stock awards and certain restricted stock units granted by the Company contain non-forfeitable rights to dividends and therefore are considered participating securities.  The two-class method for calculating basic EPS excludes dividends paid to participating securities and any undistributed earnings attributable to participating securities.

The following table presents the computation of EPS for the three and six months ended June 30, 2018 and 2017:

	Three Months Ended						Six Months Ended
	June 30,						June 30,
(In thousands, except per share data)	2018			2017			2018			2017
Net income	$	6,743		$	8,841		$	18,816		$	18,012
Dividends paid on and earnings allocated to participating securities		(148	)		(182	)		(405	)		(360	)
Income attributable to common stock	$	6,595		$	8,659		$	18,411		$	17,652
Weighted average common shares outstanding, including participating securities		19,884			19,781			19,859			19,725
Weighted average participating securities		(445	)		(410	)		(433	)		(401	)
Weighted average common shares outstanding		19,439			19,371			19,426			19,324
Basic earnings per common share	$	0.34		$	0.45		$	0.95		$	0.91
Income attributable to common stock	$	6,595		$	8,659		$	18,411		$	17,652
Impact of assumed conversions - interest on 8.5% trust preferred securities		-			-			-			32
Income attributable to common stock including assumed conversions	$	6,595		$	8,659		$	18,411		$	17,684
Weighted average common shares outstanding		19,439			19,371			19,426			19,324
Incremental shares from assumed conversions of options and restricted stock units		29			23			27			20
Incremental shares from assumed conversions of 8.5% trust preferred securities		-			-			-			35
Weighted average common and equivalent shares outstanding		19,468			19,394			19,453			19,379
Diluted earnings per common share	$	0.34		$	0.45		$	0.95		$	0.91

There were 47,393 stock options outstanding at June 30, 2018 that were not included in the computation of diluted earnings per share for the three and six months ended June 30, 2018 because the options’ exercise prices were greater than the average market price of common stock and were, therefore, antidilutive. There were no stock options outstanding at June 30, 2017.

There were no restricted stock units that were antidilutive for the three months ended June 30, 2018 and 2017. There were zero and 20,084 restricted stock units that were antidilutive for the six months ended June 30, 2018 and 2017, respectively.

The $15.7 million in trust preferred securities outstanding at December 31, 2016 were redeemed effective January 18, 2017 and therefore were not included in the computation of diluted earnings per share for the three months ended June 30, 2017, but were dilutive for the six months ended June 30, 2017 and therefore were included in the computation of diluted earnings per share for that period.