NOTE 11 – EARNINGS PER SHARE: Weighted average shares of common stock outstanding for basic EPS excludes the weighted average shares not released by the Employee Stock Ownership Plan (“ESOP”) of 126,287, 179,007 and 235,748 shares at December 31, 2002, 2001 and 2000, respectively and the weighted average unvested shares in the Recognition and Retention Plan (“RRP”) of 146,662, 172,573 and 187,454 shares at December 31, 2002, 2001 and 2000, respectively. Shares not included in the calculation of diluted EPS because they are anti-dilutive were stock options of 14,000, 44,283 and 238,507 and RRP grants of 7,000, 6,026 and 73,500 at December 31, 2002, 2001 and 2000, respectively. The following sets forth the computation of basic net income per common share and diluted net income per common share. The Company (on a consolidated basis) and the Bank are subject to various regulatory capital requirements administered by the federal and state banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Company’s financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Company and the Bank must meet specific capital guidelines that involve quantitative measures of their assets, liabilities and certain off-balance sheet items as calculated under regulatory accounting practices. The capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings and other factors. Prompt corrective action provisions are not applicable to bank holding companies. Quantitative measures established by regulation to ensure capital adequacy require the Company and the Bank to maintain minimum amounts and ratios of total and Tier 1 capital to risk-weighted assets and of Tier 1 capital to average assets. Management believes, as of December 31, 2002 and 2001, that the Company and the Bank met all capital adequacy requirements to which they are subject. As of December 31, 2002, the most recent notification from the Federal Deposit Insurance Corporation categorized the Bank as well capitalized under the regulatory framework for prompt corrective action. To be categorized as well capitalized, an institution must  maintain minimum total risk-based, Tier 1 risk-based and Tier 1 leveraged ratios as set forth in the following table. There are no conditions or events since the notification that management believes have changed the Bank’s category. The Company’s and the Bank’s actual capital amounts and ratios as of December 31, 2002 and 2001 are also presented in the table. 51 Years Ended December 31, 2002 2001 2000 Numerator: Income applicable to common shares $18,453,000 $14,508,000 $12,975,000 Denominator: Weighted average common shares outstanding 5,662,810 5,843,861 6,056,148 Effect of dilutive securities: Stock options outstanding 420,788 267,618 46,821 RRP grants 35,846 31,479 10,602 Weighted average common shares outstanding -  assuming dilution 6,119,444 6,142,958 6,113,571 Earnings per common share $ 3.26 $ 2.48 $ 2.14 Earnings per common share – assuming dilution $ 3.02 $ 2.36 $ 2.12 NOTE 12 – CAPITAL REQUIREMENTS AND OTHER REGULATORY MATTERS: