Note 8. Earnings Per Share

Diluted earnings per share are calculated as follows:


	Quarter Ended June 30,				Six Months Ended June 30,
(Dollars in thousands, except per share data)	2019		2018		2019		2018
Net income applicable to basic earnings per common share	$	1,751	$	764	$	3,150	$	2,060
Weighted average shares outstanding		9,985		9,974		9,985		9,402
Basic earnings per share	$	0.175	$	0.077	$	0.315	$	0.219
Effect of dilutive securities:
Weighted average shares outstanding under options Delmar 2004 stock option plan (1)		12		23		15		31
Weighted average exercise price per share	$	9.05	$	7.54	$	9.05	$	10.32
Assumed proceeds on exercise	$	109	$	173	$	136	$	320
Average market value per share	$	7.45	$	7.37	$	7.30	$	7.32
Weighted average shares outstanding under options Liberty 2004 stock option plan		12		16		12		11
Weighted average exercise price per share	$	3.98	$	4.02	$	3.98	$	4.03
Assumed proceeds on exercise	$	48	$	64	$	48	$	44
Average market value per share	$	7.45	$	7.37	$	7.30	$	7.32
Less: Treasury stock purchased with assumed proceeds from exercise	$	6	$	8	$	6	$	6
Weighted average shares outstanding under restricted stock plans (2)		9		12		9		9
Diluted weighted average shares and common stock equivalents		10,000		9,994		10,000		9,416
Diluted earnings per share	$	0.175	$	0.076	$	0.315	$	0.219

(1)

Options were excluded from the calculation of dilutive earnings per share because they are anti‑dilutive.

(2)

Includes vested shares not yet issued and nonvested shares as of June 30.