11. Net Income Per Common Share

6 Months Ended

Jun. 30, 2012

Earnings per common share:

11. Net Income Per Common Share

Basic net earnings per common share is computed by dividing income available to common shareholders by the weighted-average number of common shares outstanding. Diluted earnings per share reflect, in periods in which they have a dilutive effect, the impact of common shares issuable upon exercise of vested stock options.  The computation of diluted earnings per share excludes those options with an exercise price in excess of the average market price of the Company’s common shares during the periods presented.

For the six months and three months ended June 30, 2012 there were 221,648 vested options with an exercise price below the average market price of the Company’s Common Stock during the period. For the six months ended June 30, 2012 the inclusion of net common shares assumed to be issued upon the exercise of such options in the computation of diluted earnings per share would have been anti-dilutive for the period, and as a result, the weighted average number of common shares used in the calculation of basic and diluted earnings per common share is the same, and has not been adjusted for the effects of such options.

For the six months and three months ended June 30, 2011 there were 251,932 vested options with an exercise price below the average market price of the Company’s Common Stock during the period.

The reconciliation of the weighted average number of shares of Common Stock and net income used in the calculation of basic and diluted earnings per common share follows:

	Three months ended June 30,				Six months ended June 30,
	2012		2011		2012		2011
	(unaudited)				(unaudited)
Net income used in the calculation of basic earnings per share	$	560,316	$	773,931	$	1,325,734	$	900,555
Effect of dilutive securities, common share equivalents		12,168		-		-		16,839
Net income used for computing diluted earnings per share	$	572,484	$	773,931	$	1,325,734	$	917,394
Weighted average number of shares outstanding		3,789,592		3,838,386		3,780,351		3,838,386
Effect of dilutive securities, common share equivalents		94,187		80,377		-		82,903
Weighted average number of shares outstanding,
used for computing diluted earnings per share		3,883,779		3,918,763		3,780,351		3,921,289