Note 6 - 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 because they were anti-dilutive were 22,000 and 24,000 shares, respectively, of common stock issuable upon exercise of outstanding stock options for the three and six months ended June 30, 2018. An additional 437,500 shares of common stock that was issuable upon conversion of the Company’s Series A Preferred Stock was anti-dilutive for the three and six months ended June 30, 2017.

On April 2, 2018, the Company exercised its option to convert all 437,500 outstanding shares of Series A Preferred Stock into shares of the Company’s common stock. The conversion ratio was one share of Series A Preferred Stock for one share of common stock. As of April 2, 2018, the Series A Preferred Stock was no longer deemed outstanding and all rights with respect to such stock ceased and terminated.

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


	Three Months Ended June 30,				Six Months Ended June 30,
	2018		2017		2018		2017
	(dollars in thousands, except for per share data)
Weighted-average shares outstanding - basic		12,684,711		12,125,324		12,463,132		12,124,566
Dilution		96,326		83,926		95,937		83,345
Weighted-average share outstanding - diluted		12,781,037		12,209,250		12,559,069		12,207,911

Net income available to common stockholders	$	1,918	$	912	$	3,733	$	1,767
Net income per share - basic	$	0.15	$	0.08	$	0.30	$	0.15
Net income per share - diluted	$	0.15	$	0.07	$	0.30	$	0.14