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
 6 Months Ended
Jun. 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
June 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
$244,000
and
$482,000
for the
three
and
six
months ended
June 30, 2018
and
$285,000
and
$622,000
for the
three
and
six
months ended
June 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    
24.13
 %    
29.00
 %
Expected dividends    
1.06
 %    
0.44
 %
Expected term (in years)    
6.25
      
6.25
  
Risk-free rate    
2.67
 %    
2.09
 %
 
The weighted average grant-date fair value of options granted during the
six
months ended
June 30, 2018
and
June 30, 2017
was
$10.95
and
$11.84,
respectively.
 
The following table summarizes stock option activity during the
six
months ended
June 30, 2018
and
June 30, 2017:
 
            Weighted    
   
 
  
Weighted
  
Average
  
 
   
 
  
Average
  
Remaining
  
Aggregate
   
 
  
Exercise
  
Contractual
  
Intrinsic
   
Shares
  
Price
  
Term (years)
  
Value
                (In Thousands)
Six Months Ended June 30, 2018:                                
Outstanding at January 1, 2018    
1,666,834
 
   $
10.68
 
    
5.5
 
   $
51,377
 
Granted    
12,750
 
    
41.50
 
    
9.7
 
    
(9
)
Exercised    
(175,836
)
    
4.90
 
    
3.1
 
    
6,317
 
Forfeited    
(6,000
)
    
19.50
 
    
7.7
 
    
128
 
Outstanding at June 30, 2018    
1,497,748
 
    
11.58
 
    
5.3
 
   $
43,787
 
                                 
Exercisable at June 30, 2018    
748,600
 
   $
7.34
 
    
3.9
 
   $
25,811
 
                                 
Six Months Ended June 30, 2017:                                
Outstanding at January 1, 2017    
2,026,334
 
   $
9.00
 
    
6.2
 
   $
57,636
 
Granted    
51,500
 
    
37.95
 
    
9.6
 
    
(80
)
Exercised    
(292,000
)
    
4.98
 
    
4.4
 
    
9,169
 
Forfeited    
(32,000
)
    
21.96
 
    
8.6
 
    
(462
)
Outstanding at June 30, 2017    
1,753,834
 
    
10.28
 
    
5.9
 
   $
45,777
 
                                 
Exercisable at June 30, 2017    
811,736
 
   $
5.20
 
    
4.4
 
   $
25,303
 
 
As of
June 30, 2018,
there was approximately
$1,695,000
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
June 30, 2018,
there was
$811,000
of total unrecognized compensation cost related to non-vested restricted stock. The cost is expected to be recognized evenly over the remaining
1.8
years of the restricted stock’s vesting period.
 
The following table summarizes restricted stock activity during the
six
months ended
June 30, 2018
and
2017,
respectively:
 
    Shares   Weighted
Average Grant
Date Fair
Value
Six Months Ended June 30, 2018:                
Non-vested at January 1, 2018    
120,676
     $
10.29
  
Granted    
11,850
      
41.29
  
Vested    
(61,700
 )    
5.81
  
Forfeited    
-
      
-
  
Non-vested at June 30, 2018    
70,826
      
19.38
  
                 
Six Months Ended June 30, 2017:                
Non-vested at January 1, 2017    
118,676
     $
8.88
  
Granted    
6,000
      
38.16
  
Vested    
(4,200
 )    
14.49
  
Forfeited    
(800
 )    
15.74
  
Non-vested at June 30, 2017    
119,676
      
9.94