Quarterly report pursuant to Section 13 or 15(d)

Note 6 - Employee and Director Benefits

v3.10.0.1
Note 6 - Employee and Director Benefits
 9 Months Ended
Sep. 30, 2018
Notes to Financial Statements  
Disclosure of Compensation Related Costs, Share-based Payments [Text Block]
NOTE
6
- EMPLOYEE AND DIRECTOR BENEFITS
 
Stock Options
 
At
September 30, 2018,
the Company had stock-based compensation plans, as described below. The compensation cost that has been charged to earnings for the plans was approximately
$202,000
and
$684,000
for the
three
and
nine
months ended
September 30, 2018
and
$294,000
and
$916,000
for the
three
and
nine
months ended
September 30, 2017.
 
The Company’s
2005
Amended and Restated Stock Option 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, 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 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 that uses the assumptions noted in the following table. Expected volatility is based on historical volatilities of the Company’s common stock. 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    
24.72
 %    
29.00
 %
Expected dividends    
1.06
 %    
0.44
 %
Expected term (in years)    
6.25
      
6.25
  
Risk-free rate    
2.67
 %    
2.08
 %
 
The weighted average grant-date fair value of options granted during the
nine
months ended
September 30, 2018
and
September 30, 2017
was
$10.98
and
$11.83,
respectively.
 
The following table summarizes stock option activity during the
nine
months ended
September 30, 2018
and
September 30, 2017:
 
            Weighted    
   
 
  
Weighted
  
Average
  
 
   
 
  
Average
  
Remaining
  
Aggregate
   
 
  
Exercise
  
Contractual
  
Intrinsic
   
Shares
  
Price
  
Term (years)
  
Value
                             
(In Thousands)
  
Nine Months Ended September 30, 2018:                                
Outstanding at January 1, 2018    
1,666,834
 
   $
10.68
 
    
5.5
 
   $
51,377
 
Granted    
12,750
 
    
41.58
 
    
9.5
 
    
(31
)
Exercised    
(231,336
)
    
4.94
 
    
3.1
 
    
7,665
 
Forfeited    
(33,000
)
    
15.00
 
    
6.4
 
    
758
 
Outstanding at September 30, 2018    
1,415,248
 
    
11.79
 
    
5.1
 
   $
38,998
 
                                 
Exercisable at September 30, 2018    
693,100
 
   $
6.78
 
    
3.5
 
   $
22,513
 
                                 
Nine Months Ended September 30, 2017:                                
Outstanding at January 1, 2017    
2,026,334
 
   $
9.00
 
    
6.2
 
   $
57,636
 
Granted    
52,500
 
    
37.93
 
    
9.4
 
    
(35
)
Exercised    
(359,000
)
    
4.97
 
    
4.2
 
    
11,590
 
Forfeited    
(32,000
)
    
21.96
 
    
8.4
 
    
489
 
Outstanding at September 30, 2017    
1,687,834
 
    
10.51
 
    
5.7
 
   $
45,136
 
                                 
Exercisable at September 30, 2017    
810,736
 
   $
5.22
 
    
4.2
 
   $
25,971
 
 
As of
September 30, 2018,
there was approximately
$1,514,000
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
2.2
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
September 30, 2018,
there was
$752,000
of total unrecognized compensation cost related to non-vested restricted stock. The cost is expected to be recognized evenly over the remaining
1.9
years of the restricted stock’s vesting period.
 
The following table summarizes restricted stock activity during the
nine
months ended
September 30, 2018
and
2017,
respectively:
 
    Shares   Weighted
Average Grant
Date Fair
Value
Nine Months Ended September 30, 2018:                
Non-vested at January 1, 2018    
120,676
     $
10.29
  
Granted    
12,850
      
41.48
  
Vested    
(73,700
 )    
5.88
  
Forfeited    
(750
 )    
41.21
  
Non-vested at September 30, 2018    
59,076
      
19.38
  
                 
Nine Months Ended September 30, 2017:                
Non-vested at January 1, 2017    
118,676
     $
8.88
  
Granted    
7,000
      
38.02
  
Vested    
(4,200
 )    
15.74
  
Forfeited    
(800
 )    
15.74
  
Non-vested at September 30, 2017    
120,676
      
10.29