Basic and diluted earnings per common share:

Basic earnings per common share has been calculated on the basis of net income for the period divided by the weighted average number of common shares outstanding during each year. Diluted earnings per share gives effect to all dilutive potential common shares outstanding at the end of the year assuming that they had been issued, converted or exercised at the later of the beginning of the year or their date of issuance. 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 share equivalents or the proceeds of the exercise of options.

The following table reconciles the numerators and denominators of the basic and diluted earnings per common share computation (Dollar amounts in thousands of U.S. dollars, except per share amounts):

	Three months ended June 30,				Six months ended June 30,
	2018			2017		2018		2017

Numerator for basic and diluted earnings per common share:
Net income for the period	$	3,608	$	5,242	$	7,352	$	7,686

Denominator for basic and diluted earnings per common share:
Basic weighted average number of common shares outstanding		10,597,228		10,528,219		10,592,994		10,501,407
Effect of outstanding stock options		205,779		264,812		204,023		284,278
Diluted weighted average number of shares outstanding		10,803,007		10,793,031		10,797,017		10,785,685

Basic earnings per common share	$	0.34	$	0.50	$	0.69	$	0.73

Diluted earnings per common share	$	0.33	$	0.49	$	0.68	$	0.71

For the

three

months ended

June 30, 2018,

outstanding options to purchase

419,000

common shares were

not

included in the computation of diluted income per common share because all such options’ exercise price was greater than the average market price of the common shares for the period as compared to the

three

months ended

June 30, 2017,

where

18,500

outstanding options were

not

included in the computation.

For the

six

months ended

June 30, 2018,

outstanding options to purchase

449,000

common shares were

not

six

months ended

June 30, 2017,

where

23,500

outstanding options were

not

included in the computation.

During the

three

and

six

months ended

June 30, 2018,

the Company did

not

repurchase any shares under the stock buyback program commenced on

February 14, 2018,

which will be terminated on or before

February 13, 2019.

During the

three

and

six

months ended

June 30, 2017

and the

six

months ended

June 30, 2018,

the Company did

not

repurchase any shares under the stock buyback program commenced on

March 1, 2017,

which terminated on

February 14, 2018.

During the

six

months ended

June 30, 2017,

the company did

not

repurchase any shares under the stock buyback program commenced on

February 10, 2016,

which terminated on

February 9, 2017.