Note 19 – Earnings Per Share

The weighted average common shares outstanding are as follows:



	Year Ended December 31,
	2019	2018

Weighted average common shares outstanding	12,352,142	12,318,861
Dilutive effect of employee stock options and nonvested share awards	-	-
Weighted average diluted common shares outstanding	12,352,142	12,318,861

The Company computes earnings per share using the two-class method, which is an earnings allocation formula that determines earnings per share for common stock and participating securities. The Company’s participating securities are its grants of restricted stock which contain non-forfeitable rights to dividends. The Company computes basic earnings per share by dividing net income allocated to common shareholders by the weighted average number of shares outstanding during the year. Diluted earnings per share is calculated to give effect to all potentially dilutive common shares that were outstanding during the year. Weighted average diluted common shares outstanding include the incremental shares that would be issued upon the assumed exercise of stock options and the assumed vesting of nonvested share awards. For the years ended December 31, 2019 and 2018, 659,678 and 349,132 shares, respectively, were not included in the weighted average common shares outstanding calculation as they were anti-dilutive.