STOCK-BASED COMPENSATION

9 Months Ended

Sep. 30, 2011

NOTE 10 – EARNINGS PER SHARE

Basic earnings per share of common stock are based on the weighted average number of common shares outstanding during the period. Unvested but issued restricted shares are considered to be outstanding shares and used to calculate the weighted average number of shares outstanding and determine net book value per share. Diluted earnings per share is calculated by dividing net income by the weighted average number of shares adjusted for the dilutive effect of outstanding stock options.

Presented below are the calculations for basic and diluted earnings per share:

	Three months ended				Nine months ended
	September 30,				September 30,
(dollars in thousands, except per share data – unaudited)	2011		2010		2011		2010

Net income	$	1,394	$	1,331	$	3,905	$	3,420

Weighted average shares outstanding		1,574,456		1,564,297		1,573,751		1,564,242
Effect of dilutive stock options outstanding		731		851		950		724

Diluted weighted average shares outstanding		1,575,187		1,565,148		1,574,701		1,564,966

Basic earnings per share	$	0.89	$	0.85	$	2.48	$	2.19
Diluted earnings per share	$	0.88	$	0.85	$	2.48	$	2.19

- Definition

The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

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Reference 2: http://www.xbrl.org/2003/role/presentationRef

-Publisher AICPA

-Name Statement of Position (SOP)

-Number 93-6

-Paragraph 53

-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 3: http://www.xbrl.org/2003/role/presentationRef

-Publisher SEC

-Name Staff Accounting Bulletin (SAB)

-Number Topic 14

Reference 4: http://www.xbrl.org/2003/role/presentationRef

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-Name Statement of Financial Accounting Standard (FAS)

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-Paragraph 64, 65, A240

-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 5: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

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Reference 6: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

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Reference 7: http://www.xbrl.org/2003/role/presentationRef

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+ Details