EARNINGS PER SHARE

3 Months Ended

Mar. 31, 2015

NOTE 2 – EARNINGS PER SHARE

The Company’s basic earnings per common share is computed by dividing net income available to common shareholders (net income less dividends declared) by the weighted average number of common shares outstanding during the period. The Company’s diluted earnings per common share is computed similar to basic earnings per common share except that the numerator is equal to net income available to common shareholders and the denominator is increased to include the number of additional common shares that would have been outstanding if dilutive potential common shares had been issued. Included in the denominator are the dilutive effects of stock options computed under the treasury stock method and warrants outstanding in the first quarter 2014.

The following table illustrates the computation of basic and diluted earnings per share.

	For the Three Months Ended
	March 31,
	2015		2014
Basic:
Net income (numerator)	$	1,096	$	1,028
Weighted average shares outstanding (denominator)		10,373,563		10,182,083
Basic earnings per share	$	0.11	$	0.10

Diluted:
Net income (numerator)	$	1,096	$	1,028
Weighted average shares outstanding		10,373,563		10,182,083
Effect of dilutive stock options		132,338		90,258
Weighted average shares outstanding assuming dilution (denominator)		10,505,901		10,272,341

Diluted earnings per share	$	0.10	$	0.10

	March 31,	March 31,
	2015	2014
Shares subject to outstanding options	271,800	395,895
Shares subject to outstanding warrants	-	638,920

As of March 31, 2015 and 2014, certain outstanding options and for March 31. 2014, warrants, had exercise prices in excess of the current market value of the underlying shares. All of these shares are not included in the table above, as exercise of these options and warrants would not be dilutive to shareholders.

- Definition

The entire disclosure for earnings per share.

+ References+ Details

PACIFIC FINANCIAL CORP 10-Q