EARNINGS PER SHARE

9 Months Ended

Sep. 30, 2012

Earnings Per Share [Abstract]

EARNINGS PER SHARE

NOTE 11 – 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. On June 19, 2012, the Company declared a 5% stock dividend to shareholders of record July 16, 2012, which was paid in the form of additional common stock on July 30, 2012. All references in the accompanying consolidated financial statements and footnotes to the number of common shares and per share amounts have been restated to reflect the 5% stock dividend.

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)	2012		2011		2012		2011
Net income	$	1,226	$	1,394	$	4,324	$	3,905
Weighted average shares outstanding		1,663,472		1,653,179		1,663,221		1,652,439
Effect of dilutive stock options outstanding		—		768		76		998
Diluted weighted average shares outstanding		1,663,472		1,653,947		1,663,297		1,653,437
Basic earnings per share	$	0.74	$	0.85	$	2.60	$	2.36
Diluted earnings per share	$	0.74	$	0.84	$	2.60	$	2.36