Common Stock and Earnings Per Share

12 Months Ended

Dec. 31, 2021

Common Stock and Earnings Per Share [Abstract]

5. Common Stock and Earnings Per Share

Net income of $16,984 and $16,598 for the years ended December 31, 2021 and 2020 respectively, is used to calculate both basic and diluted earnings per share. Basic net income per share is based on the weighted average number of common shares outstanding. Diluted net income per share is based on the weighted average number of common shares outstanding plus potentially dilutive shares. The dilutive effect of employee stock-based compensation is included in the computation of diluted net income per share. The dilutive effect of stock-based compensation is calculated using the treasury stock method and expected proceeds upon exercise or issuance of the stock-based compensation.

The following table summarizes the shares used in computing basic and diluted net income per share:

	2021		2020
Weighted average common shares, basic		13,076,263		13,033,681
Effect of dilutive securities:
Employee stock-based compensation		1,027		839
Weighted average common shares, diluted		13,077,290		13,034,520

Under the employee stock purchase plan, all full-time employees who have been employed at least ninety consecutive days may purchase shares of the Company’s common stock limited to 10% of gross compensation. The purchase price is 95% of the fair market value (as defined). Shares issued during 2021 and 2020 were 3,986 and 3,718, respectively. As of December 31, 2021, 54,021 authorized shares remain unissued under the plan.

The Company has a Dividend Reinvestment and Direct Stock Purchase and Sale Plan (“the Plan”), which is available to both current shareholders and the general public. On November 8, 2019, the Company filed a Registration Statement on Form S-3 with the Securities and Exchange Commission (SEC) to authorize an additional 157,000 shares and rollover the unissued 344,379 shares authorized under the 2016 Form S-3, for issuance under the new Prospectus for the Plan. Under the optional dividend reinvestment portion of the Plan, holders of the Company’s common stock may purchase additional shares instead of receiving cash dividends. The purchase price is 95% of the fair market value (as defined). Under the direct stock purchase portion of the Plan, purchases are made monthly at 100% of the stock’s fair market value, as defined in the new Prospectus. The Registration Statement was declared effective by the SEC on November 18, 2019. Shares issued during 2021 and 2020 were 41,975 and 37,370, respectively. As of December 31, 2021, 396,544 authorized shares remain unissued under the Plan.

On March 11, 2013, the Board of Directors, or the Board, authorized a share repurchase program granting the Company authority to repurchase up to 1,200,000 shares of the Company’s common stock from time to time. The stock repurchase program has no specific end date and the Company may repurchase shares in the open market or through privately negotiated transactions. The Company may suspend or discontinue the repurchase program at any time. During both 2021 and 2020, the Company did not repurchase or retire any shares. As of December 31, 2021, 618,004 shares remain available for repurchase.