11. Net Income Per Common Share

9 Months Ended

Sep. 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 nine months and three months ended September 30, 2012 there were 199,148 vested options with an exercise price below the average market price of the Company’s Common Stock during the period. For the nine months and three months ended September 30, 2011 there were 269,432 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				Nine months ended
	September 30,				September 30,
	2012		2011		2012		2011
	(unaudited)				(unaudited)
Net income used in the calculation of basic earnings per share	$	913,987	$	219,569	$	2,239,721	$	1,120,124
Effect of dilutive securities, common share equivalents		455		1,117		39,434		-
Net income used for computing diluted earnings per share	$	914,442	$	220,686	$	2,279,155	$	1,120,124
Weighted average number of shares outstanding		3,824,461		3,838,386		3,794,979		3,838,386
Effect of dilutive securities, common share equivalents		111,706		74,650		89,193		-
Weighted average number of shares outstanding,
used for computing diluted earnings per share		3,936,167		3,913,036		3,884,172		3,838,386