Earnings Per Share

6 Months Ended

Jun. 30, 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 659,000 and 397,500 shares outstanding at June 30, 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 and six months ended June 30, 2016 and 2015 is as follows:

	2016
	Three Months		Six Months
Common shares outstanding, beginning of the period		11,710,745		11,710,745
Weighted average common shares issued		22,989		11,495
Weighted average number of common shares outstanding		11,733,734		11,722,240
Dilutive effect of common share equivalents		0		221,602
Diluted weighted average number of common shares outstanding		11,733,734		11,943,842

	2015
	Three Months		Six Months
Common shares outstanding, beginning of the period		11,576,539		11,549,789
Weighted average common shares issued		52,210		43,423
Weighted average number of common shares outstanding		11,628,749		11,593,212
Dilutive effect of common share equivalents		288,894		305,377
Diluted weighted average number of common shares outstanding		11,917,643		11,898,589

We have authorized 20,000,000 shares of preferred stock issuable in one or more series, none of which is issued or outstanding as of June 30, 2016.