Note 10 - Basic and Diluted Earnings Per Common Share

3 Months Ended

Mar. 31, 2016

. Basic and diluted earnings per common share:

Basic earnings per common share has been calculated by dividing net income for the period by the weighted average number of common shares outstanding during each period. Diluted earnings per share has been calculated by dividing net income for the period by the weighted average number of common shares and potentially dilutive common shares outstanding during the period. In computing diluted earnings per share, the treasury stock method is used to determine the number of shares assumed to be purchased from the conversion of common shares equivalents or the proceeds of option exercises.

The following table is a summary of the basic and diluted earnings per common share:

	Three months ended March 31,
	2016		2015

Numerator for basic and diluted earnings per common share:
Net income for the period	$	4,438,238	$	2,833,943

Denominator for basic and diluted earnings per scommon share:
Basic weighted average number of common shares outstanding		10,674,036		11,142,628
Effect of outstanding stock options		187,546		437,419
Diluted weighted average number of shares outstanding		10,861,582		11,580,047

Basic earnings per common share	$	0.42	$	0.25

Diluted earnings per common share	$	0.41	$	0.24

For the three months ended March 31, 2016, outstanding options to purchase 130,475 common shares were not included in the computation of diluted income per common share because all such options had exercise prices greater than the average market price of the common shares.

During the three months ended March 31, 2016, 98,178 common shares were repurchased and cancelled under the terms of our stock repurchase program announced in February 2016.

During the three months ended March 31, 2015, 214,089 common shares were repurchased and cancelled under the terms of our stock repurchase program announced in February 2015.

During the three months ended March 31, 2015, 193,907 common shares were repurchased and cancelled under the terms of a modified Dutch auction tender offer announced in December 2014 and concluded in January 2015.

The computation of earnings per share and diluted earnings per share for the three months ended March 31, 2016 and 2015 include reductions in the number of shares outstanding due to these repurchases.