Quarterly report pursuant to Section 13 or 15(d)

Note 6 - Employee and Director Benefits

v3.7.0.1
Note 6 - Employee and Director Benefits
 3 Months Ended
Mar. 31, 2017
Notes to Financial Statements  
Disclosure of Compensation Related Costs, Share-based Payments [Text Block]
NOTE
6
- EMPLOYEE AND DIRECTOR BENEFITS
 
Stock Options
 
At
March
31,
2017,
the Company had stock incentive plans as described below. The compensation cost that has been charged to earnings for the plans was approximately
$337,000
and
$343,000
for the
three
months ended
March
31,
2017
and
2016,
respectively.
 
The Company’s
2005
Amended and Restated Stock Incentive Plan allows for the grant of stock options to purchase up to
6,150,000
shares of the Company’s common stock. The Company’s
2009
Amended and Restated Stock Incentive Plan authorizes the grant of up to
5,550,000
shares and allows for the issuance of Stock Appreciation Rights, Restricted Stock, Stock Options, Non-stock Share Equivalents, Performance Shares or Performance Units. Both plans allow for the grant of incentive stock options and non-qualified stock options, and option awards are granted with an exercise price equal to the fair market value of the Company’s common stock at the date of grant. The maximum term of the options granted under the plans is
ten
years.
 
The Company estimates the fair value of each stock option award using a Black-Scholes-Merton valuation model which incorporates the assumptions noted in the following table. Expected volatilities are based on an index of southeastern United States publicly traded banks. The expected term for options granted is based on the short-cut method and represents the period of time that options granted are expected to be outstanding. The risk-free rate for periods within the contractual life of the option is based on the U. S. Treasury yield curve in effect at the time of grant.
 
    2017   2016
Expected volatility    
29.00
 %    
29.00
 %
Expected dividends    
0.43
 %    
0.60
 %
Expected term (in years)    
6
      
6
  
Risk-free rate    
2.08
 %    
1.92
 %
 
The weighted average grant-date fair value of options granted during the
three
months ended
March
31,
2017
and
March
31,
2016
was
$11.91
and
$5.77,
respectively.
 
The following table summarizes stock option activity during the
three
months ended
March
31,
2017
and
March
31,
2016:
 
            Weighted    
        Weighted   Average    
        Average   Remaining    
        Exercise   Contractual   Aggregate
    Shares   Price   Term (years)   Intrinsic Value
                (In Thousands)
Three Months Ended March 31, 2017:                                
Outstanding at January 1, 2017    
2,026,334
     $
9.00
      
6.2
     $
57,636
  
Granted    
51,500
      
38.10
      
9.8
      
(89
 )
Exercised    
(175,500
 )    
5.28
      
5.0
      
5,459
  
Forfeited    
(27,000
 )    
21.55
      
8.8
      
401
  
Outstanding at March 31, 2017    
1,875,334
      
9.96
      
6.2
     $
49,540
  
                                 
Exercisable at March 31, 2017    
928,236
     $
5.12
      
4.6
     $
29,013
  
                                 
Three Months Ended March 31, 2016:                                
Outstanding at January 1, 2016    
2,498,834
     $
6.66
      
6.3
     $
42,743
  
Granted    
198,000
      
19.11
      
9.8
      
-
  
Exercised    
(411,000
 )    
4.27
      
4.6
      
7,372
  
Forfeited    
(9,000
 )    
19.52
      
9.3
      
24
  
Outstanding at March 31, 2016    
2,276,834
      
8.12
      
6.7
     $
32,058
  
                                 
Exercisable at March 31, 2016    
782,836
     $
4.74
      
5.2
     $
13,672
  
 
 
As of
March
31,
2017,
there was
$2,539,000
of total unrecognized compensation cost related to non-vested stock options. The cost is expected to be recognized on the straight-line method over the next
3.1
years.
 
 
Restricted Stock
 
The Company has issued
483,276
shares of restricted stock to certain officers, of which
364,500
are vested. The value of restricted stock awards is determined to be the current value of the Company’s stock at the grant date, and this total value will be recognized as compensation expense over the vesting period. As of
March
31,
2017,
there was
$448,000
of total unrecognized compensation expense related to non-vested restricted stock. The expense is expected to be recognized evenly over the remaining
1.5
years of the restricted stock’s vesting period.