INCOME PER COMMON SHARE

12 Months Ended

Dec. 31, 2014

Income Per Common Share

INCOME PER COMMON SHARE

13. Income Per Common Share

Basic income per share are computed by dividing net income by the weighted-average number of common shares outstanding. Diluted income per share are computed by dividing net income by the weighted-average number of common shares and potential common shares outstanding. Potential common shares consist of dilutive stock options determined using the treasury stock method and the average market price of common stock.

Options to purchase 146,250 shares were used in the computation of diluted income per share at December 31, 2014. All options outstanding, (options to purchase 159,165) at December 31, 2013, were used in the computation of diluted earnings per share at December 31, 2013. Options to purchase 34,675 shares of common stock with prices ranging from $11.67 to $15.11 per share were not included in the computation of diluted earnings per share for 2012 because the options’ exercise price was greater than the average market price of common shares.

The following is a summary of the reconciliation of average shares outstanding for the years ended December 31:

	2014				2013				2012
	Basic		Diluted		Basic		Diluted		Basic		Diluted
Weighted average shares outstanding		4,461,388		4,461,388		4,452,642		4,452,642		4,445,738		4,445,738
Effect of dilutive shares:
Stock options		—		114,677		—		9,311		—		—
Average shares outstanding		4,461,388		4,576,065		4,452,642		4,461,953		4,445,738		4,445,738