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 September 30,				Nine months ended September 30,
	2018		2017		2018		2017

Numerator for basic and diluted earnings per common share:
Net income for the period	$	5,346	$	3,440	$	12,698	$	11,128

Denominator for basic and diluted earnings per common share:
Basic weighted average number of common shares outstanding		10,611,579		10,564,311		10,599,243		10,522,841
Effect of outstanding stock options		182,718		221,031		196,425		262,209
Diluted weighted average number of shares outstanding		10,794,297		10,785,342		10,795,668		10,785,050

Basic earnings per common share	$	0.50	$	0.33	$	1.20	$	1.06

Diluted earnings per common share	$	0.50	$	0.32	$	1.18	$	1.03

For the

three

months ended

September 30, 2018,

outstanding options to purchase

440,000

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

September 30, 2017,

where

345,200

outstanding options were

not

included in the computation.

For the

nine

months ended

September 30, 2018,

outstanding options to purchase

440,000

common shares were

not

nine

months ended

September 30, 2017,

where

349,700

outstanding options were

not

included in the computation.

During the

three

and

nine

months ended

September 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

nine

months ended

September 30, 2017

and the

nine

months ended

September 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

nine

months ended

September 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.