5. Calculation of Basic and Diluted Earnings per Share

6 Months Ended

Jun. 30, 2017

Earnings per common share:

Calculation of Basic and Diluted Earnings per Share

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

(in thousands, except per share amounts)		Three Months Ended June 30,				Six Months Ended June 30,
		2017		2016		2017		2016
Numerator:
Net Income - basic and diluted	$	352	$	87	$	220	$	331
Denominator:
Denominator for basic earnings per share - weighted-average shares		3,542		3,402		3,542		3,208
Effect of dilutive securities:
Employee stock options		21		1		17		1
Warrants		-		56		-		114
Dilutive potential common shares		21		57		17		115
Denominator for diluted earnings per share - weighted-average shares and assumed conversions		3,563		3,459		3,559		3,323
Basic and diluted earnings per common share	$	0.10	$	0.03	$	0.06	$	0.10

Approximately 105,000 and 118,000 employee stock options were excluded from the calculation of diluted earnings per share for the three and six month periods ended June 30, 2017, respectively, as the exercise price was greater than the market price of the common shares and, therefore, the effect would be anti-dilutive.

For the three and six month periods ended June 30, 2016, approximately 190,000 employee stock options were excluded from the calculation of diluted earnings per share as the effect would be anti-dilutive.