Note 5 - Earnings Per Share

Basic earnings per share is computed by dividing net income available to common stockholders by the weighted average number of shares of common stock outstanding for each period. Diluted earnings per share reflect additional common shares that would have been outstanding if dilutive potential common shares had been issued. Potential common shares that may be issued by the Company relate to outstanding stock options, warrants, and convertible preferred stock, and are determined using the treasury stock method.

Not included in the diluted earnings per share calculation for 2017 and 2016 because they were anti-dilutive, were 20,000 and 126,600 shares, respectively, of common stock issuable upon exercise of outstanding stock options, 437,500 shares of common stock issuable upon conversion of the Company’s Series A Preferred Stock, and, in 2016, 556,976 shares of common stock issuable upon the exercise of a warrant were also anti-dilutive and excluded from the calculation.

Information relating to the calculations of our income per common share is summarized as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2017		2016		2017		2016
	(dollars in thousands, except for per share data)
Weighted-average shares outstanding - basic		12,172,586		12,104,379		12,140,689		11,324,660
Dilution		150,986		79,360		107,525		51,193
Weighted-average share outstanding - diluted		12,323,572		12,183,739		12,248,214		11,375,853

Net income available to common stockholders	$	1,121	$	539	$	2,753	$	12,864

Net income per share - basic	$	0.09	$	0.04	$	0.23	$	1.14
Net income per share - diluted	$	0.09	$	0.04	$	0.22	$	1.13