Quarterly report pursuant to Section 13 or 15(d)

Note 6 - Employee and Director Benefits

v3.8.0.1
Note 6 - Employee and Director Benefits
 3 Months Ended
Mar. 31, 2018
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, 2018,
the Company had stock incentive plans as described below. The compensation cost that has been charged to earnings for the plans was approximately
$238,000
and
$337,000
for the
three
months ended
March 31, 2018
and
2017,
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.
 
    2018   2017
Expected volatility    
23.43
 %    
29.00
 %
Expected dividends    
1.07
 %    
0.43
 %
Expected term (in years)    
6
      
6
  
Risk-free rate    
2.67
 %    
2.08
 %
 
The weighted average grant-date fair value of options granted during the
three
months ended
March 31, 2018
and
2017
was
$10.41
and
$11.91,
respectively.
 
The following table summarizes stock option activity during the
three
months ended
March 31, 2018
and
2017:
 
            Weighted    
   
 
  
Weighted
  
Average
  
 
   
 
  
Average
  
Remaining
  
 
   
 
  
Exercise
  
Contractual
  
Aggregate
   
Shares
  
Price
  
Term (years)
  
Intrinsic Value
                             
(In Thousands)
  
Three Months Ended March 31, 2018:                                
Outstanding at January 1, 2018    
1,666,834
 
   $
10.68
 
    
5.5
 
   $
51,377
 
Granted    
10,250
 
    
41.21
 
    
9.9
 
    
(4
)
Exercised    
(173,836
)
    
4.90
 
    
3.4
 
    
6,244
 
Forfeited    
(1,000
)
    
25.41
 
    
8.5
 
    
15
 
Outstanding at March 31, 2018    
1,502,248
 
    
11.54
 
    
5.5
 
   $
43,978
 
                                 
Exercisable at March 31, 2018    
672,600
 
   $
5.48
 
    
3.9
 
   $
23,770
 
                                 
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
 
 
As of
March 31, 2018,
there was
$1,847,000
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
2.4
years.
 
Restricted Stock
 
The Company periodically grants restricted stock awards that vest upon service conditions. Dividend payments are made during the vesting period. The value of restricted stock is determined to be the current value of the Company’s stock, and this total value will be recognized as compensation expense over the vesting period. As of
March 31, 2018,
there was
$841,000
of total unrecognized compensation cost related to non-vested restricted stock. As of
March 31, 2018,
non-vested restricted stock had a weighted average remaining time to vest of
1.6
years.