10. Net Income Per Common Share

6 Months Ended

Jun. 30, 2013

Notes to Financial Statements

10. 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 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.

The computation of diluted earnings per share excludes outstanding options in periods where the exercise of such options would be anti-dilutive. For the six months and three months ended June 30, 2013, the inclusion of 10,000 options in the computation of diluted earnings per share would have been anti-dilutive for the periods and, as a result, the weighted average number of common shares used in the calculation of diluted earnings per common has not been adjusted for the effect of such options.

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

	Three months ended				Six months ended
	June 30,				June 30,
	2013		2012		2013		2012
Weighted average number of shares outstanding		3,827,712		3,789,592		3,834,269		3,780,351
Effect of dilutive securities, common share equivalents		78,720		94,187		77,381		-
Weighted average number of shares outstanding used for computing diluted earnings per share		3,906,432		3,883,779		3,911,650		3,780,351