10. Net Income Per Common Share

6 Months Ended

Jun. 30, 2015

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 common share excludes outstanding options in periods where the exercise of such options would be anti-dilutive. For the six months ended June 30, 2015 and 2014, the inclusion of 77,500 and 7,500 options, respectively, in the computation of diluted earnings per common 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 share has not been adjusted for the effect of such options. For the three months ended June 30, 2015 and 2014, the inclusion of 77,500 and 18,750 options, respectively, in the computation of diluted earnings per common 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 share has not been adjusted for the effect of such options.

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

	Three months ended		Six months ended
	June 30,		June 30,
	2015	2014	2015	2014
Weighted average number of shares outstanding	7,337,817	7,287,935	7,328,098	7,277,313
Effect of dilutive securities, common share equivalents	25,171	70,345	27,810	75,296
Weighted average number of shares outstanding,
used for computing diluted earnings per share	7,362,988	7,358,280	7,355,908	7,352,609