NOTE 3 – EARNINGS PER SHARE

Share-based payment awards that entitle holders to receive non-forfeitable dividends before vesting are considered participating securities and thus included in the calculation of basic earnings per share. These awards are included in the calculation of basic earnings per share under the two-class method. The two-class method allocates earnings for the period between common shareholders and other security holders. The participating awards receiving dividends will be allocated the same amount of income as if they were outstanding shares.

The following table presents the calculation of basic and diluted earnings per share for the three and six months ended June 30, 2012 and 2011.


(Dollars in thousands, except share and per share data)	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2012			2011			2012			2011

Income available to common shareholders	$	12,560		$	5,186		$	31,953		$	19,833
Distributed and undistributed earnings to unvested restricted stock		(240	)		(91	)		(613	)		(379	)

Distributed and undistributed earnings to common shareholders – Basic⁽¹⁾		12,320			5,095			31,340			19,454
Undistributed earnings reallocated to unvested restricted stock		—			4			6			1

Distributed and undistributed earnings to common shareholders – Diluted	$	12,320		$	5,099		$	31,346		$	19,455

Weighted average shares outstanding- Basic⁽²⁾		29,463,811			28,015,846			29,424,078			27,405,797

Weighted average shares outstanding- Diluted		28,950,806			27,677,313			28,939,291			27,124,910

Earnings per common share – Basic⁽¹⁾	$	0.43		$	0.19		$	1.09		$	0.72

Earnings per common share - Diluted	$	0.43		$	0.18		$	1.08		$	0.72
Earnings per unvested restricted stock share – Basic ⁽³⁾	$	0.43		$	0.18		$	1.12		$	0.80
Earnings per unvested restricted stock share - Diluted	$	0.43		$	0.17		$	1.10		$	0.79

(1)

Total earnings available to common shareholders included distributed earnings of $9,838,000, or $0.34 per weighted average share, and undistributed earnings of $2,482,000, or $0.09 per weighted average share for the three months ended June 30, 2012. Total earnings available to common shareholders included distributed earnings of $10,083,000, or $0.37 per weighted average share, and an undistributed loss of $4,998,000, or $0.18 per weighted average share for the three months ended June 30, 2011. For the six months ended June 30, 2012, total earnings available to common shareholders included distributed earnings of $19,679,000, or $0.68 per weighted average share, and undistributed earnings of $11,660,000, or $0.40 per weighted average share. For the six months ended June 30, 2011, total distributed earnings to common shareholders were $19,076,000, or $0.71 per weighted average share, and undistributed earnings were $378,000, or $0.01 per weighted average share.

(2)	Weighted average basic shares outstanding include 563,882 and 517,596 shares of unvested restricted stock for the three months ended June 30, 2012 and 2011, respectively, and 549,479 and 476,896 shares for the six months ended June 30, 2012 and 2011, respectively.

(3)

Total earnings available to unvested restricted stock included distributed earnings of $192,000, or $0.34 per weighted average share, and undistributed earnings of $48,000, or $0.09 per weighted average share for the three months ended June 30, 2012. Total earnings available to unvested restricted stock included distributed earnings of $180,000, or $0.35 per weighted average share, and an undistributed loss of $89,000, or $0.17 per weighted average share for the three months ended June 30, 2011. For the six months ended June 30, 2012, total earnings available to unvested restricted stock shares included distributed earnings of $385,000, or $0.70 per weighted average share, and undistributed earnings of $228,000, or $0.42 per weighted average share. For the six months ended June 30, 2011, total distributed earnings were $372,000, or $0.78 per weighted average share, and undistributed earnings were $7,000, or $0.02 per weighted average share.

For the three-month periods ended June 30, 2012 and 2011, the calculations for basic shares outstanding exclude: (1) the weighted average shares owned by the Recognition and Retention Plan (“RRP”) of 620,924 and 576,608, respectively, and (2) the weighted average shares in treasury stock of 1,642,217 and 1,021,432, respectively. For the six months periods ended June 30, 2012 and 2011, basic shares outstanding exclude 605,469 and 567,520 shares owned by the RRP, respectively, and 1,683,003 and 1,094,453 shares, respectively, of weighted average shares of treasury stock.

The effect from the assumed exercise of 743,628 and 544,511 stock options was not included in the computation of diluted earnings per share for the three-month periods ended June 30, 2012 and 2011, respectively, because such amounts would have had an antidilutive effect on earnings per share. For the six-month periods ended June 30, 2012 and 2011, the effect from the assumed exercise of 612,200 and 253,218 stock options, respectively, was not included in the computation because such amounts would also have been antidilutive to earnings per share.