FIDELITY D & D BANCORP INC Earnings Per Share Disclosure

14.	EARNINGS PER SHARE

 

Basic earnings per share (EPS) is computed by dividing net income available to common shareholders by the weighted-average number of common shares outstanding for the period. Diluted EPS is computed in the same manner as basic EPS but also reflects the potential dilution that could occur from the grant of stock-based compensation awards. The Company maintains one active share-based compensation plan that may generate additional potentially dilutive common shares. For granted and unexercised stock-settled stock appreciation rights (SSARs), dilution would occur if Company-issued SSARs were exercised and converted into common stock. As of the years ended December 31, 2025 and 2024, there were 7,910 and 9,211 potentially dilutive shares related to issued and unexercised SSARs. The calculation did not include 45,087 weighted average unexercised SSARs because their effect was antidilutive as of December 31, 2025. For restricted stock, dilution would occur from the Company’s previously granted but unvested shares. There were 24,999 and 30,954 potentially dilutive shares related to unvested restricted share grants as of the years ended December 31, 2025 and 2024, respectively.

 

In the computation of diluted EPS, the Company uses the treasury stock method to determine the dilutive effect of its granted but unexercised stock options and SSARs and unvested restricted stock. Under the treasury stock method, the assumed proceeds, as defined, received from shares issued in a hypothetical stock option exercise or restricted stock grant, are assumed to be used to purchase treasury stock. Proceeds include amounts received from the exercise of outstanding stock options and compensation cost for future service that the Company has not yet recognized in earnings. The Company does not consider awards from share-based grants in the computation of basic EPS.

 

The following table illustrates the data used in computing basic and diluted EPS for the years indicated:

 

		2025				2024
(dollars in thousands except per share data)
Basic EPS:
Net income available to common shareholders		$	28,198			$	20,794
Weighted-average common shares outstanding			5,764,287				5,732,532
Basic EPS		$	4.89			$	3.63
Diluted EPS:
Net income available to common shareholders		$	28,198			$	20,794
Weighted-average common shares outstanding			5,764,287				5,732,532
Potentially dilutive common shares			32,909				40,165
Weighted-average common and potentially dilutive shares outstanding			5,797,196				5,772,697
Diluted EPS		$	4.86			$	3.60