Earnings Per Share

6 Months Ended

Jun. 30, 2014

Earnings Per Share

Note2. Earnings per Share.

We present basic and diluted earnings or loss per share in accordance with authoritative guidance which establishes standards for computing and presenting basic and diluted earnings per share. Per share data is determined by using the weighted average number of common shares outstanding. Common equivalent shares are considered only for diluted earnings per share, unless considered anti-dilutive. Common equivalent shares, determined using the treasury stock method, result from stock options with exercise prices that are below the average market price of the common stock.

Basic earnings per share include no dilution and are computed by dividing income available to common shareholders by the weighted-average number of shares outstanding during the period. Diluted earnings per share reflect the potential of securities that could share in our earnings. There were common stock equivalents of 110,000 and 160,000 shares outstanding at June 30, 2014 and 2013, respectively, consisting of stock options that were not included in the calculation of earnings per share because they would have been anti-dilutive.

A reconciliation of the weighted average number of common shares outstanding for the three and six months ended June 30, 2014 and 2013 is as follows:

	2014
	Three Months		Six Months
Common shares outstanding, beginning of the period		11,446,800		11,446,800
Weighted average common shares issued		53,823		28,036
Weighted average number of common shares outstanding		11,500,623		11,474,836
Dilutive effect of common share equivalents		293,705		298,249
Diluted weighted average number of common shares outstanding		11,794,328		11,773,086

	2013
	Three Months		Six Months
Common shares outstanding, beginning of the period		11,201,622		10,937,000
Weighted average common shares issued		11,964		217,038
Weighted average number of common shares outstanding		11,213,586		11,154,038
Dilutive effect of common share equivalents		163,639		175,221
Diluted weighted average number of common shares outstanding		11,377,225		11,329,259

We have authorized 20,000,000 shares of preferred stock issuable in one or more series, none of which are issued or outstanding as of June 30, 2014.