Note 3 - Earnings Per Share

3 Months Ended

Mar. 31, 2016

Earnings Per Share

Basic earnings per common share is computed by dividing net income available to common shareholders by the total weighted average number of common shares outstanding, which includes unvested participating securities. Unvested share-based payment awards that contain nonforfeitable rights to dividends or dividend equivalents (whether paid or unpaid) are participating securities and as such are included in the calculation of earnings per share. The Company’s unvested restricted stock unit awards are considered participating securities. Therefore, weighted average common shares outstanding used for computing basic earnings per common share includes common shares outstanding plus unvested restricted stock unit awards. The computation of diluted earnings per share includes the additional dilutive effect of stock options outstanding and other common stock equivalents during the period. Common stock equivalents that are anti-dilutive are not included in the computation of diluted earnings per common share. The numerator for calculating basic and diluted earnings per common share is net income available to common shareholders. The shares held in the Company’s Employee Benefit Trust are not included in shares outstanding for purposes of calculating earnings per common share.

Earnings per common share have been computed based on the following:

	For the three months ended March 31,
(Dollars in thousands, except per share data)	2016			2015
Net income, as reported	$	9,561		$	8,733
Divided by:
Weighted average common shares outstanding		29,097			29,397
Weighted average common stock equivalents		14			22
Total weighted average common shares outstanding and common stock equivalents		29,111			29,419
Basic earnings per common share	$	0.33		$	0.30
Diluted earnings per common share (1)	$	0.33		$	0.30
Dividend payout ratio		51.5	%		53.3	%

(1)

For the three months ended March 31, 2016 and 2015, there were no stock options that were anti-dilutive.