Earnings Per Share

3 Months Ended

Mar. 31, 2016

Note 2.

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 969,500 and 397,500 shares outstanding at March 31, 2016 and 2015, 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 months end March 31, 2016 and 2015 is as follows:

	2016		2015
Common shares outstanding, beginning of the year		11,710,745		11,549,789
Weighted average common shares issued		0		7,492
Weighted average number of common shares outstanding		11,710,745		11,557,281
Dilutive effect of common share equivalents		216,379		317,308
Diluted weighted average number of common shares outstanding		11,927,124		11,874,589

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 March 31, 2016.