(9) Earnings per Common Share

Basic earnings per common share are computed as net income available to common shareholders divided by the weighted average number of common shares outstanding during the period. Diluted earnings per common share include the dilutive effect, if any, of additional potential common shares issuable under the equity incentive plan, computed using the treasury stock method, and the impact of the Company’s convertible preferred stock using the “if converted” method.

	Three months ended				Nine months ended
	September 30,				September 30,
	2017		2016		2017		2016
Basic
Net income	$	3,660	$	3,680	$	11,892	$	13,586
Preferred stock dividends		308		374		935		1,156
Net income available to common shareholders—basic	$	3,352	$	3,306	$	10,957	$	12,430
Weighted average common shares outstanding—basic		10,170,734		8,042,303		9,815,118		7,922,170
Basic earnings per common share	$	0.33	$	0.41	$	1.12	$	1.57
Diluted
Net income available to common shareholders—basic	$	3,352	$	3,306	$	10,957	$	12,430
Preferred stock dividends		308		374		935		1,156
Net income available to common shareholders—diluted	$	3,660	$	3,680	$	11,892	$	13,586
Weighted average common shares outstanding for basic earnings per common share		10,170,734		8,042,303		9,815,118		7,922,170
Add: Dilutive effects of convertible preferred shares		2,426,565		2,922,609		2,455,008		3,024,712
Average shares and dilutive potential common shares outstanding—diluted		12,597,299		10,964,912		12,270,126		10,946,882
Diluted earnings per common share	$	0.29	$	0.34	$	0.97	$	1.24

For the three-month period ended September 30, 2017 there were 2,426,565 dilutive shares related to the Company’s convertible preferred stock. For the nine-month period ended September 30, 2017 there were 2,455,008 dilutive shares related to the Company’s convertible preferred stock. For the three-month period ended September 30, 2016 there were 2,922,609 dilutive shares related to the Company’s convertible preferred stock. For the nine-month period ended September 30, 2016 there were 3,024,712 dilutive shares related to the Company’s convertible preferred stock. Under the “if converted” method, all convertible preferred shares are assumed to be converted into common shares at the corresponding conversion rate. These additional shares are then added to the common shares outstanding to calculate diluted earnings per share.