Note 6 - Earnings Per Share

9 Months Ended

Sep. 30, 2016

6. EARNINGS PER SHARE

Basic earnings per share is computed by dividing income available to common shareholders by the weighted average number of common shares outstanding for the period. Diluted earnings per share reflects the potential dilution that could occur if securities or other contracts to issue common stock, such as stock options, result in the issuance of common stock which shares in the earnings of the Company. The treasury stock method has been applied to determine the dilutive effect of stock options in computing diluted earnings per share.

	For the Three Months				For the Nine Months
	Ended September 30,				Ended September 30,
(In thousands, except per share data)	2016		2015		2016		2015
Net Income:
Net income	$	1,957	$	1,600	$	5,367	$	4,170
Earnings Per Share:
Basic earnings per share	$	0.40	$	0.33	$	1.11	$	0.87
Diluted earnings per share	$	0.39	$	0.32	$	1.06	$	0.82
Weighted Average Number of Shares Outstanding:
Basic shares		4,868		4,824		4,856		4,812
Diluted shares		5,035		5,067		5,052		5,061

Shares of common stock issuable under stock options and warrants for which the exercise prices were greater than the average market prices were not included in the computation of diluted earnings per share due to their antidilutive effect. Stock options and warrants not included in the computation of diluted earnings per share, due to shares not being in-the-money and having an antidilutive effect, were approximately 108,000 and 53,000 for the three month periods ended September 30, 2016 and 2015, respectively. Stock options and warrants not included in the computation of diluted earnings per share, due to shares not being in-the-money and having an antidilutive effect, were approximately 108,000 and 53,000 for the nine month periods ended September 30, 2016 and 2015, respectively.