10. Net Income Per Common Share

9 Months Ended

Sep. 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 common 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 common 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 nine months ended September 30, 2015 and 2014, the inclusion of 50,000 and 32,473 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 September 30, 2015 and 2014, the inclusion of 50,000 and 86,522 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 common share follows:

	Three months ended		Nine months ended
	September 30,		September 30,
	2015	2014	2015	2014
Weighted average number of shares outstanding	7,334,269	7,294,913	7,330,178	7,283,244
Effect of dilutive securities, common share equivalents	47,357	83,184	37,536	77,050
Weighted average number of shares outstanding,
used for computing diluted earnings per share	7,381,626	7,378,097	7,367,714	7,360,294