NOTE 4. EARNINGS PER SHARE

Basic earnings per share is computed by dividing reported net earnings by the weighted-average number of common shares outstanding during the period. Diluted earnings per share reflect the additional dilution for all potentially dilutive securities such as stock options. The following is a reconciliation of the number of shares (denominator) used in the basic and diluted earnings per share computations (shares in thousands):


	Three months ended June 30,
	2018			2017
		Per Share			Per Share
	Shares	Amount		Shares	Amount
Basic	17,821	$	0.52	17,527	$	0.41
Effect of dilutive stock options	748		(0.02)	681		(0.01)
Diluted	18,569	$	0.50	18,208	$	0.40


	Six months ended June 30,
	2018			2017
		Per Share			Per Share
	Shares	Amount		Shares	Amount
Basic	17,795	$	0.90	17,502	$	0.69
Effect of dilutive stock options	761		(0.04)	612		(0.02)
Diluted	18,556	$	0.86	18,114	$	0.67

Excluded from the computation of diluted earnings per share are options where the exercise prices are greater than the market price as their effects would be anti-dilutive in the computation of diluted earnings per share. For the three months ended June 30, 2018 and 2017, options for approximately 441 thousand and 167 thousand shares, respectively, were excluded from the computation. For the six months ended June 30, 2018 and 2017, options for approximately 441 thousand and 494 thousand shares, respectively, were excluded from the computation.