10-Q 1 pb-10q_20160930.htm 10-Q pb-10q_20160930.htm

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2016

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM              TO             

COMMISSION FILE NUMBER: 001-35388

 

PROSPERITY BANCSHARES, INC.®

(Exact name of registrant as specified in its charter)

 

 

TEXAS

74-2331986

(State or other jurisdiction

of incorporation or organization)

(I.R.S. Employer

Identification No.)

 

Prosperity Bank Plaza

 

4295 San Felipe, Houston, Texas

77027

(Address of principal executive offices)

(Zip Code)

 

(713) 693-9300

(Registrant’s telephone number, including area code)

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes      No  

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes      No  

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definitions of “accelerated filer”, “large accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act:

 

Large Accelerated Filer

 

Accelerated Filer

 

 

 

 

 

Non-accelerated Filer

(Do not check if a smaller reporting company)

Smaller Reporting Company

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes      No  

As of November 4, 2016, there were 69,483,828 outstanding shares of the registrant’s Common Stock, par value $1.00 per share.

 

 

 


PROSPERITY BANCSHARES, INC.® AND SUBSIDIARIES

INDEX TO FORM 10-Q

 

PART I—FINANCIAL INFORMATION

 

 

 

 

Item 1.

Financial Statements

3

 

Consolidated Balance Sheets as of September 30, 2016 and December 31, 2015 (unaudited)

3

 

Consolidated Statements of Income for the Three and Nine Months Ended September 30, 2016 and 2015 (unaudited)

4

 

Consolidated Statements of Comprehensive Income for the Three and Nine Months Ended September 30, 2016 and 2015 (unaudited)

5

 

Consolidated Statements of Changes in Shareholders’ Equity for the Nine Months Ended September 30, 2016 and  2015 (unaudited)

6

 

Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2016 and 2015 (unaudited)

7

 

Notes to Consolidated Financial Statements (unaudited)

8

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

34

Item 3.

Quantitative and Qualitative Disclosures about Market Risk

56

Item 4.

Controls and Procedures

56

 

 

PART II—OTHER INFORMATION

 

 

 

 

Item 1.

Legal Proceedings

57

Item 1A.

Risk Factors

57

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

57

Item 3.

Defaults upon Senior Securities

57

Item 4.

Mine Safety Disclosures

57

Item 5.

Other Information

57

Item 6.

Exhibits

58

Signatures

59

 

 

 

2


PART I—FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

PROSPERITY BANCSHARES, INC.® AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

 

 

 

September 30,

 

 

December 31,

 

 

 

2016

 

 

2015

 

 

 

(Dollars in thousands, except par value)

 

ASSETS

 

 

 

 

 

 

 

 

Cash and due from banks

 

$

341,483

 

 

$

562,544

 

Federal funds sold

 

 

630

 

 

 

1,418

 

Total cash and cash equivalents

 

 

342,113

 

 

 

563,962

 

Available for sale securities, at fair value

 

 

129,677

 

 

 

103,064

 

Held to maturity securities, at cost (fair value of $9,020,897 and $9,393,175, respectively)

 

 

8,858,344

 

 

 

9,399,363

 

Total securities

 

 

8,988,021

 

 

 

9,502,427

 

Loans held for sale

 

 

29,457

 

 

 

23,933

 

Loans held for investment

 

 

9,518,857

 

 

 

9,414,656

 

Total loans

 

 

9,548,314

 

 

 

9,438,589

 

Less: allowance for credit losses

 

 

(85,585

)

 

 

(81,384

)

Loans, net

 

 

9,462,729

 

 

 

9,357,205

 

Accrued interest receivable

 

 

48,469

 

 

 

51,924

 

Goodwill

 

 

1,900,349

 

 

 

1,868,827

 

Core deposit intangibles, net

 

 

48,010

 

 

 

49,417

 

Bank premises and equipment, net

 

 

270,386

 

 

 

267,996

 

Other real estate owned

 

 

16,280

 

 

 

2,963

 

Bank owned life insurance (BOLI)

 

 

248,149

 

 

 

235,429

 

Federal Home Loan Bank of Dallas stock

 

 

35,449

 

 

 

68,413

 

Other assets

 

 

44,089

 

 

 

68,653

 

TOTAL ASSETS

 

$

21,404,044

 

 

$

22,037,216

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

LIABILITIES:

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

Noninterest-bearing

 

$

5,159,333

 

 

$

5,136,579

 

Interest-bearing

 

 

11,762,076

 

 

 

12,544,540

 

Total deposits

 

 

16,921,409

 

 

 

17,681,119

 

Other borrowings

 

 

425,916

 

 

 

491,399

 

Securities sold under repurchase agreements

 

 

318,449

 

 

 

315,253

 

Accrued interest payable

 

 

3,496

 

 

 

1,896

 

Other liabilities

 

 

139,962

 

 

 

84,639

 

Total liabilities

 

 

17,809,232

 

 

 

18,574,306

 

COMMITMENTS AND CONTINGENCIES

 

 

 

 

 

 

SHAREHOLDERS’ EQUITY:

 

 

 

 

 

 

 

 

Preferred stock, $1 par value; 20,000,000 shares authorized; none issued or outstanding

 

 

 

 

 

 

Common stock, $1 par value; 200,000,000 shares authorized; 69,477,578 shares issued and outstanding at September 30, 2016; 70,058,761 shares issued and 70,021,673 shares outstanding at December 31, 2015

 

 

69,477

 

 

 

70,059

 

Capital surplus

 

 

2,025,722

 

 

 

2,036,378

 

Retained earnings

 

 

1,498,111

 

 

 

1,355,040

 

Accumulated other comprehensive income—net unrealized gain on available for sale securities, net of tax of $808 and $1,098, respectively

 

 

1,502

 

 

 

2,040

 

Less: treasury stock, at cost, 37,088 shares

 

 

 

 

 

(607

)

Total shareholders’ equity

 

 

3,594,812

 

 

 

3,462,910

 

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY

 

$

21,404,044

 

 

$

22,037,216

 

 

See notes to consolidated financial statements.

 

3


PROSPERITY BANCSHARES, INC.® AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(UNAUDITED)

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 30,

 

 

September 30,

 

 

 

2016

 

 

2015

 

 

2016

 

 

2015

 

 

 

(Dollars in thousands, except per share data)

 

INTEREST INCOME:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans, including fees

 

$

116,247

 

 

$

116,911

 

 

$

359,066

 

 

$

361,193

 

Securities

 

 

48,132

 

 

 

48,610

 

 

 

151,802

 

 

 

145,702

 

Federal funds sold

 

 

81

 

 

 

22

 

 

 

242

 

 

 

234

 

Total interest income

 

 

164,460

 

 

 

165,543

 

 

 

511,110

 

 

 

507,129

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

INTEREST EXPENSE:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

 

9,396

 

 

 

8,753

 

 

 

29,647

 

 

 

27,499

 

Other borrowings

 

 

752

 

 

 

473

 

 

 

1,944

 

 

 

967

 

Securities sold under repurchase agreements

 

 

248

 

 

 

209

 

 

 

694

 

 

 

620

 

Junior subordinated debentures

 

 

 

 

 

 

 

 

37

 

 

 

791

 

Total interest expense

 

 

10,396

 

 

 

9,435

 

 

 

32,322

 

 

 

29,877

 

NET INTEREST INCOME

 

 

154,064

 

 

 

156,108

 

 

 

478,788

 

 

 

477,252

 

PROVISION FOR CREDIT LOSSES

 

 

2,000

 

 

 

5,310

 

 

 

22,000

 

 

 

7,060

 

NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES

 

 

152,064

 

 

 

150,798

 

 

 

456,788

 

 

 

470,192

 

NONINTEREST INCOME:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nonsufficient funds (NSF) fees

 

 

8,764

 

 

 

9,082

 

 

 

24,984

 

 

 

25,310

 

Credit card, debit card and ATM card income

 

 

5,903

 

 

 

5,955

 

 

 

17,659

 

 

 

17,596

 

Service charges on deposit accounts

 

 

4,698

 

 

 

4,438

 

 

 

13,898

 

 

 

12,806

 

Trust income

 

 

1,851

 

 

 

1,986

 

 

 

5,640

 

 

 

6,042

 

Mortgage income

 

 

2,143

 

 

 

1,770

 

 

 

5,386

 

 

 

4,431

 

Brokerage income

 

 

1,213

 

 

 

1,596

 

 

 

3,789

 

 

 

4,546

 

Net gain on sale of assets

 

 

37

 

 

 

173

 

 

 

1,389

 

 

 

1,822

 

Other

 

 

5,075

 

 

 

6,780

 

 

 

16,205

 

 

 

17,945

 

Total noninterest income

 

 

29,684

 

 

 

31,780

 

 

 

88,950

 

 

 

90,498

 

NONINTEREST EXPENSE:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

 

48,328

 

 

 

46,587

 

 

 

146,666

 

 

 

144,372

 

Net occupancy and equipment

 

 

5,997

 

 

 

6,088

 

 

 

17,362

 

 

 

17,864

 

Credit and debit card, data processing and software amortization

 

 

4,207

 

 

 

3,924

 

 

 

12,801

 

 

 

11,786

 

Regulatory assessments and FDIC insurance

 

 

3,434

 

 

 

3,366

 

 

 

10,311

 

 

 

11,973

 

Core deposit intangibles amortization

 

 

2,418

 

 

 

2,356

 

 

 

6,974

 

 

 

7,235

 

Depreciation

 

 

3,289

 

 

 

3,313

 

 

 

9,924

 

 

 

9,649

 

Communications

 

 

2,870

 

 

 

2,663

 

 

 

8,790

 

 

 

8,307

 

Other real estate expense

 

 

44

 

 

 

123

 

 

 

136

 

 

 

384

 

Other

 

 

8,889

 

 

 

8,010

 

 

 

26,275

 

 

 

24,057

 

Total noninterest expense

 

 

79,476

 

 

 

76,430

 

 

 

239,239

 

 

 

235,627

 

INCOME BEFORE INCOME TAXES

 

 

102,272

 

 

 

106,148

 

 

 

306,499

 

 

 

325,063

 

PROVISION FOR INCOME TAXES

 

 

33,621

 

 

 

35,550

 

 

 

100,826

 

 

 

108,892

 

NET INCOME

 

$

68,651

 

 

$

70,598

 

 

$

205,673

 

 

$

216,171

 

EARNINGS PER SHARE:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.99

 

 

$

1.01

 

 

$

2.95

 

 

$

3.09

 

Diluted

 

$

0.99

 

 

$

1.01

 

 

$

2.95

 

 

$

3.09

 

 

See notes to consolidated financial statements.

 

 

4


PROSPERITY BANCSHARES, INC.® AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(UNAUDITED)

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 30,

 

 

September 30,

 

 

 

2016

 

 

2015

 

 

2016

 

 

2015

 

 

 

(Dollars in thousands)

 

Net income

 

$

68,651

 

 

$

70,598

 

 

$

205,673

 

 

$

216,171

 

Other comprehensive loss, before tax:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Securities available for sale:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Change in unrealized gain during period

 

 

(186

)

 

 

(867

)

 

 

(828

)

 

 

(1,949

)

Total other comprehensive loss

 

 

(186

)

 

 

(867

)

 

 

(828

)

 

 

(1,949

)

Deferred taxes related to other comprehensive loss

 

 

65

 

 

 

303

 

 

 

290

 

 

 

682

 

Other comprehensive loss, net of tax

 

 

(121

)

 

 

(564

)

 

 

(538

)

 

 

(1,267

)

Comprehensive income

 

$

68,530

 

 

$

70,034

 

 

$

205,135

 

 

$

214,904

 

 

See notes to consolidated financial statements.

 

 

5


PROSPERITY BANCSHARES, INC.® AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

(UNAUDITED)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other

 

 

 

 

 

 

Total

 

 

 

Common Stock

 

 

Capital

 

 

Retained

 

 

Comprehensive

 

 

Treasury

 

 

Shareholders’

 

 

 

Shares

 

 

Amount

 

 

Surplus

 

 

Earnings

 

 

Income

 

 

Stock

 

 

Equity

 

 

 

(In thousands, except share and per share data)

 

BALANCE AT DECEMBER 31, 2014

 

 

69,816,653

 

 

$

69,817

 

 

$

2,025,235

 

 

$

1,146,652

 

 

$

3,729

 

 

$

(607

)

 

$

3,244,826

 

Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

216,171

 

 

 

 

 

 

 

 

 

 

 

216,171

 

Other comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1,267

)

 

 

 

 

 

 

(1,267

)

Common stock issued in connection with the exercise of stock options and restricted stock awards

 

 

260,925

 

 

 

261

 

 

 

(38

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

223

 

Stock based compensation expense

 

 

 

 

 

 

 

 

 

 

8,540

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

8,540

 

Cash dividends declared, $0.8175 per share

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(57,254

)

 

 

 

 

 

 

 

 

 

 

(57,254

)

BALANCE AT SEPTEMBER 30, 2015

 

 

70,077,578

 

 

$

70,078

 

 

$

2,033,737

 

 

$

1,305,569

 

 

$

2,462

 

 

$

(607

)

 

$

3,411,239

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BALANCE AT DECEMBER 31, 2015

 

 

70,058,761

 

 

$

70,059

 

 

$

2,036,378

 

 

$

1,355,040

 

 

$

2,040

 

 

$

(607

)

 

$

3,462,910

 

Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

205,673

 

 

 

 

 

 

 

 

 

 

 

205,673

 

Other comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(538

)

 

 

 

 

 

 

(538

)

Common stock issued in connection with the exercise of stock options and restricted stock awards

 

 

21,267

 

 

 

21

 

 

 

646

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

667

 

Common stock issued in connection with the acquisition of Tradition Bancshares, Inc.

 

 

679,528

 

 

 

679

 

 

 

31,843

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

32,522

 

Treasury stock cancellation

 

 

(37,088

)

 

 

(37

)

 

 

(570

)

 

 

 

 

 

 

 

 

 

 

607

 

 

 

Common stock repurchase

 

 

(1,244,890

)

 

 

(1,245

)

 

 

(49,812

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(51,057

)

Stock based compensation expense

 

 

 

 

 

 

 

 

 

 

7,237

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

7,237

 

Cash dividends declared, $0.9000 per share

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(62,602

)

 

 

 

 

 

 

 

 

 

 

(62,602

)

BALANCE AT SEPTEMBER 30, 2016

 

 

69,477,578

 

 

$

69,477

 

 

$

2,025,722

 

 

$

1,498,111

 

 

$

1,502

 

 

$

 

 

$

3,594,812

 

 

See notes to consolidated financial statements.

 

 

6


PROSPERITY BANCSHARES, INC.® AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

 

 

 

Nine Months Ended

 

 

 

September 30,

 

 

 

2016

 

 

2015

 

 

 

(Dollars in thousands)

 

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

 

 

 

 

 

Net income

 

$

205,673

 

 

$

216,171

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

 

 

 

Depreciation and core deposit intangibles amortization

 

 

16,898

 

 

 

16,884

 

Provision for credit losses

 

 

22,000

 

 

 

7,060

 

Net amortization of premium on investments

 

 

31,972

 

 

 

44,456

 

Loss (gain) on sale of other real estate

 

 

330

 

 

 

(86

)

Gain on sale of assets

 

 

(1,389

)

 

 

(1,822

)

Net accretion of discount on loans

 

 

(31,418

)

 

 

(44,283

)

Net accretion of discount on deposits

 

 

(935

)

 

 

(860

)

Gain on sale of loans

 

 

(4,910

)

 

 

(4,267

)

Proceeds from sale of loans held for sale

 

 

205,137

 

 

 

185,319

 

Originations of loans held for sale

 

 

(208,095

)

 

 

(185,014

)

Stock based compensation expense

 

 

7,237

 

 

 

8,540

 

Decrease (increase) in accrued interest receivable and other assets

 

 

63,096

 

 

 

(1,388

)

Increase in accrued interest payable and other liabilities

 

 

46,744

 

 

 

38,413

 

Net cash provided by operating activities

 

 

352,340

 

 

 

279,123

 

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM INVESTING ACTIVITIES:

 

 

 

 

 

 

 

 

Proceeds from maturities and principal paydowns of held to maturity securities

 

 

1,410,155

 

 

 

1,261,788

 

Purchase of held to maturity securities

 

 

(655,865

)

 

 

(1,825,802

)

Proceeds from maturities and principal paydowns of available for sale securities

 

 

8,123,458

 

 

 

4,642,623

 

Purchase of available for sale securities

 

 

(8,151,073

)

 

 

(4,609,999

)

Net decrease in loans held for investment

 

 

135,818

 

 

 

78,211

 

Purchase of bank premises and equipment

 

 

(3,933

)

 

 

(7,959

)

Proceeds from sale of bank premises, equipment and other real estate

 

 

7,206

 

 

 

9,948

 

Net cash used in the purchase of Tradition Bancshares, Inc.

 

 

(8,963

)

 

 

 

Net cash provided by (used in) investing activities

 

 

856,803

 

 

 

(451,190

)

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

 

 

 

 

 

 

Net (decrease) increase in noninterest-bearing deposits

 

 

(287,225

)

 

 

156,755

 

Net decrease in interest-bearing deposits

 

 

(961,271

)

 

 

(909,116

)

Net (repayments) proceeds from other short-term borrowings

 

 

(65,000

)

 

 

780,000

 

Repayments of other long-term borrowings

 

 

(483

)

 

 

(2,153

)

Net increase (decrease) in securities sold under repurchase agreements

 

 

3,196

 

 

 

(5,485

)

Redemption of junior subordinated debentures

 

 

(7,217

)

 

 

(167,531

)

Proceeds from stock option exercises

 

 

667

 

 

 

223

 

Repurchase of common stock

 

 

(51,057

)

 

 

 

Payments of cash dividends

 

 

(62,602

)

 

 

(57,254

)

Net cash used in financing activities

 

 

(1,430,992

)

 

 

(204,561

)

NET DECREASE IN CASH AND CASH EQUIVALENTS

 

 

(221,849

)

 

 

(376,628

)

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD

 

 

563,962

 

 

 

677,854

 

CASH AND CASH EQUIVALENTS, END OF PERIOD

 

$

342,113

 

 

$

301,226

 

 

 

 

 

 

 

 

 

 

NONCASH ACTIVITIES:

 

 

 

 

 

 

 

 

Stock issued in connection with the Tradition Bancshares, Inc. acquisition

 

$

32,522

 

 

$

 

Acquisition of real estate through foreclosure of collateral

 

 

14,583

 

 

 

2,079

 

 

 

 

 

 

 

 

 

 

SUPPLEMENTAL INFORMATION:

 

 

 

 

 

 

 

 

Income taxes paid

 

$

83,275

 

 

$

73,274

 

Interest paid

 

 

30,722

 

 

 

35,069

 

 

See notes to consolidated financial statements.

 

 

7


PROSPERITY BANCSHARES, INC.® AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2016

(UNAUDITED)

 

 

1. BASIS OF PRESENTATION

The consolidated financial statements include the accounts of Prosperity Bancshares, Inc.® (“Bancshares”) and its wholly-owned subsidiary, Prosperity Bank® (the “Bank,” collectively referred to as the “Company”). All intercompany transactions and balances have been eliminated.

The accompanying unaudited consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for financial information and with the rules and regulations of the Securities and Exchange Commission. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, the statements reflect all adjustments necessary for a fair presentation of the financial position, results of operations and cash flows of the Company on a consolidated basis, and all such adjustments are of a normal recurring nature. These financial statements and the notes thereto should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2015. Operating results for the nine-month period ended September 30, 2016 are not necessarily indicative of the results that may be expected for the year ending December 31, 2016 or any other period.

 

 

2. INCOME PER COMMON SHARE

Outstanding stock options issued by the Company represent the only dilutive effect reflected in diluted weighted average shares.  The following table illustrates the computation of basic and diluted earnings per share:

 

 

 

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

 

 

2016

 

 

2015

 

 

2016

 

 

2015

 

 

 

Amount

 

 

Per Share Amount

 

 

Amount

 

 

Per Share Amount

 

 

Amount

 

 

Per Share Amount

 

 

Amount

 

 

Per Share Amount

 

 

 

(Amounts in thousands, except per share data)

 

Net income

 

$

68,651

 

 

 

 

 

 

$

70,598

 

 

 

 

 

 

$

205,673

 

 

 

 

 

 

$

216,171

 

 

 

 

 

Basic: