Earnings Per Share

9 Months Ended

Sep. 30, 2013

Earnings Per Share

Earnings Per Share

Note 12.  Earnings Per Share

Basic earnings per common share are computed by dividing net income available to common shareholders by the weighted-average number of common shares outstanding for the reporting period.  Diluted earnings per common share are computed by dividing net income available to common shareholders by the weighted-average number of common shares outstanding over the reporting period, adjusted to include the effect of potentially dilutive common shares.  Potentially dilutive common shares are calculated using the treasury stock method and include incremental shares issuable upon exercise of outstanding stock options, other share-based compensation awards and any other security in which its conversion / exercise may result in the issuance of common stock, such as the warrant the Company issued to the U.S. Treasury during 2009, which was retired unexercised in August 2013, or the Series C Perpetual Preferred Stock the Company issued during 2010.  The computation of diluted earnings per common share excludes the impacts of the assumed exercise or issuance of securities that would have an anti-dilutive effect, which can occur when the Company reports a net loss or when the market price for the Company’s stock falls below the exercise price of equity awards issued by the Company.  For the three months ended September 30, 2013 and 2012, common stock equivalents, primarily options, totaling approximately 418,000 shares and 299,000 shares, respectively, were excluded from the calculation of diluted earnings per share, as their impact would be anti-dilutive.  For the nine months ended September 30, 2013 and 2012, common stock equivalents, primarily options, totaling approximately 358,000 shares and 278,000 shares, respectively, were excluded from the calculation of diluted earnings per share, as their impact would be anti-dilutive.

The following tables set forth the number of shares used in the calculation of both basic and diluted earnings per common share:

	For the Three Months Ended September 30,
		2013				2012
		Net				Net
(dollar amounts in thousands except per share data)		Income			Shares	Income			Shares
Net income		$	2,761			$	6,428
Dividends and accretion on preferred stock		(181		)		(357		)
Net income  available to common shareholders		$	2,580			$	6,071
Weighted average shares outstanding					25,172,929				25,089,325
Basic earnings per common share		$	0.10			$	0.24
Dilutive effect of share-based compensation awards, common stock warrants, and convertible perpetual preferred stock					1,376,639				1,341,392
Weighted average diluted shares outstanding					26,549,568				26,430,717
Diluted earnings per common share		$	0.10			$	0.23

	For the Nine Months Ended September 30,
	2013				2012
	Net				Net
(dollar amounts in thousands except per share data)	Income			Shares	Income			Shares
Net income	$	9,207			$	9,910
Dividends and accretion on preferred stock	(898		)		(1,113		)
Net applicable to common shareholders	$	8,309			$	8,797
Weighted average shares outstanding				25,138,410				25,074,405
Basic earnings per common share	$	0.33			$	0.35
Dilutive effect of share-based compensation awards, common stock warrant, and convertible perpetual preferred stock				1,401,694				1,280,238
Weighted average diluted shares outstanding				26,540,104				26,354,643
Diluted earnings per common share	$	0.31			$	0.33