5. Earnings Per Share

Basic earnings per share (“EPS”) is computed by dividing net income by the weighted average number of common shares outstanding for the period. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the Company. Potential common shares that may be issued by the Company relate solely to outstanding stock options and are determined using the treasury stock method.

The following table sets forth the computation of basic and diluted earnings per share:


(Dollars in thousands, except earnings per share data)	Three Months Ended September 30,
	2018		2017
Net income	$	1,385	$	1,206
Weighted-average common shares outstanding		5,094		4,768
Basic earnings per share	$	0.27	$	0.25

Weighted-average common shares outstanding		5,094		4,768
Common stock equivalents due to effect of stock options		26		11
Total weighted-average common shares and equivalents		5,120		4,779
Diluted earnings per share	$	0.27	$	0.25


	Nine Months Ended September 30,
	2018		2017
Net income	$	4,281	$	3,959
Weighted-average common shares outstanding		4,952		4,764
Basic earnings per share	$	0.86	$	0.83

Weighted-average common shares outstanding		4,952		4,764
Common stock equivalents due to effect of stock options		21		9
Total weighted-average common shares and equivalents		4,973		4,773
Diluted earnings per share	$	0.86	$	0.83