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## NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

(table dollar amounts in thousands, except share data) 

## NOTE 17 

## NET INCOME PER SHARE 

<img src='content_image/100351.jpg'>

Options to purchase 233,658, 162,207, and 123,506 shares of common stock with weighted average exercise prices of $24.01, $25.94, and $23.58 at December 31, 2003, 2002 and 2001 were excluded from the computation of diluted net income per share because the options exercise price was greater than the average market price of the common stock. 

## NOTE 18 

## FAIR VALUES OF FINANCIAL INSTRUMENTS 

The following methods and assumptions were used to estimate the fair value of each class of financial instrument: 

CASH AND CASH EQUIVALENTS The fair value of cash and cash equivalents approximates carrying value. 

INTEREST-BEARING TIME DEPOSITS The fair value of interest-bearing time deposits approximates carrying value. 

INVESTMENT SECURITIES Fair values are based on quoted market prices. 

MORTGAGE LOANS HELD FOR SALE The fair value of mortgages held for sale approximates carrying values. 

LOANS For both short-term loans and variable-rate loans that reprice frequently and with no significant change in credit risk, fair values are based on carrying values. The fair value for other loans is estimated using discounted cash flow analyses, using interest rates currently being offered for loans with similar terms to borrowers of similar credit quality. 

FEDERAL RESERVE AND FEDERAL HOME LOAN BANK STOCK The fair value of FRB and FHLB stock is based on the price at which it may be resold to the FRB and FHLB. 

INTEREST RECEIVABLE/PAYABLE The fair values of interest receivable/payable approximate carrying values. 

