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 September 30,
	2019			2018
		Per Share			Per Share
	Shares	Amount		Shares	Amount
Basic	18,056	$	0.52	17,886	$	0.61
Effect of dilutive stock options	653		(0.02)	745		(0.03)
Diluted	18,709	$	0.50	18,631	$	0.58


	Nine months ended September 30,
	2019			2018
		Per Share			Per Share
	Shares	Amount		Shares	Amount
Basic	17,997	$	1.42	17,826	$	1.51
Effect of dilutive stock options	668		(0.05)	756		(0.07)
Diluted	18,665	$	1.37	18,582	$	1.44

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 September 30, 2019 and 2018, options for approximately 847 thousand and 473 thousand shares, respectively, were excluded from the computation. For the nine months ended September 30, 2019 and 2018, options for approximately 795 thousand and 367 thousand shares, respectively, were excluded from the computation.