Quarterly report pursuant to Section 13 or 15(d)

EMPLOYEE AND DIRECTOR BENEFITS

v3.5.0.2
EMPLOYEE AND DIRECTOR BENEFITS
 9 Months Ended
Sep. 30, 2016
Disclosure Of Compensation Related Costs, Share-Based Payments [Abstract]  
EMPLOYEE AND DIRECTOR BENEFITS
NOTE 6 - EMPLOYEE AND DIRECTOR BENEFITS
 
Stock Options
 
At September 30, 2016, the Company had stock-based compensation plans, as described below. The compensation cost that has been charged to earnings for the plans was approximately $291,000 and $931,000 for the three and nine months ended September 30, 2016 and $293,000 and $857,000 for the three and nine months ended September 30, 2015.
 
The Company’s 2005 Amended and Restated Stock Option Plan allowed for the grant of stock options to purchase up to 3,075,000 shares of the Company’s common stock. The Company’s 2009 Amended and Restated Stock Incentive Plan authorizes the grant of up to 2,775,000 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 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 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.
 
 
 
2016
 
2015
 
Expected volatility
 
 
29.00
%
 
24.00
%
Expected dividends
 
 
0.64
%
 
0.71
%
Expected term (in years)
 
 
6.25
 
 
6.25
 
Risk-free rate
 
 
1.86
%
 
1.85
%
 
The weighted average grant-date fair value of options granted during the nine months ended September 30, 2016 and September 30, 2015 was $11.90 and $8.40, respectively.
 
The following table summarizes stock option activity during the nine months ended September 30, 2016 and September 30, 2015:
 
 
 
 
 
 
 
 
 
Weighted
 
 
 
 
 
 
 
 
 
Weighted
 
Average
 
 
 
 
 
 
 
 
 
Average
 
Remaining
 
Aggregate
 
 
 
 
 
 
Exercise
 
Contractual
 
Intrinsic
 
 
 
Shares
 
Price
 
Term (years)
 
Value
 
 
 
 
 
 
 
 
 
 
 
 
(In Thousands)
 
Nine Months Ended September 30, 2016:
 
 
 
 
 
 
 
 
 
 
 
 
 
Outstanding at January 1, 2016
 
 
1,249,417
 
$
13.32
 
 
6.3
 
$
42,743
 
Granted
 
 
117,000
 
 
39.96
 
 
9.5
 
 
1,398
 
Exercised
 
 
(328,250)
 
 
8.49
 
 
4.2
 
 
14,254
 
Forfeited
 
 
(6,500)
 
 
38.82
 
 
9.0
 
 
85
 
Outstanding at September 30, 2016
 
 
1,031,667
 
 
17.72
 
 
6.5
 
$
35,277
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Exercisable at September 30, 2016
 
 
297,268
 
$
12.90
 
 
6.0
 
$
13,901
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Nine Months Ended September 30, 2015:
 
 
 
 
 
 
 
 
 
 
 
 
 
Outstanding at January 1, 2015
 
 
1,622,917
 
$
9.38
 
 
5.9
 
$
38,256
 
Granted
 
 
162,000
 
 
33.26
 
 
9.5
 
 
-
 
Exercised
 
 
(459,000)
 
 
7.24
 
 
3.0
 
 
16,495
 
Forfeited
 
 
(7,500)
 
 
10.00
 
 
6.6
 
 
226
 
Outstanding at September 30, 2015
 
 
1,318,417
 
 
13.05
 
 
6.4
 
$
35,697
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Exercisable at September 30, 2015
 
 
256,918
 
$
8.96
 
 
4.9
 
$
8,008
 
 
As of September 30, 2016, there was approximately $2.4 million 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 2.3 years.
 
Restricted Stock
 
The Company has issued 241,588 shares of restricted stock to certain employees. The value of restricted stock awards 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, 2016, there was $542,000 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.