INCOME PER COMMON SHARE

12 Months Ended

Dec. 31, 2017

13. INCOME PER COMMON SHARE

Net income per share is computed by dividing net income by the daily weighted average number of common shares outstanding during the applicable periods. Diluted net income per share includes the potentially dilutive effect of common shares subject to outstanding stock options using the treasury stock method. Under the treasury stock method, shares subject to certain outstanding stock options have been excluded from the diluted weighted average shares outstanding calculation because the exercise of those options would lead to a net reduction in common shares outstanding. As a result, stock options to acquire 103,681 and 212,232 weighted common shares have been excluded from the diluted weighted shares outstanding for the years ended December 31, 2017 and December 31, 2016, respectively.

A reconciliation of net income per share is as follows (in thousands, except per share data):

	Years ended December 31,
	2017		2016
Numerator:
Net income	$	2,078	$	687
Denominator:
Weighted average common shares outstanding		5,128		5,050
Dilutive potential common shares		8		5
Shares used in diluted net income per common share calculations		5,136		5,055
Basic net income per common share	$	0.41	$	0.14
Diluted net income per common share	$	0.40	$	0.14