10-Q 1 pb-10q_20170630.htm 10-Q pb-10q_20170630.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 JUNE 30, 2017

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)

 

(281) 269-7199

(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, a smaller reporting company or an emerging growth company. See definitions of “accelerated filer”, “large accelerated filer”, “smaller reporting company” and “emerging growth 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

 

 

 

 

 

 

 

 

Emerging Growth Company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.    

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 August 3, 2017, there were 69,486,262 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 June 30, 2017 and December 31, 2016 (unaudited)

3

 

Consolidated Statements of Income for the Three and Six Months Ended June 30, 2017 and 2016 (unaudited)

4

 

Consolidated Statements of Comprehensive Income for the Three and Six Months Ended June 30, 2017 and 2016 (unaudited)

5

 

Consolidated Statements of Changes in Shareholders’ Equity for the Six Months Ended June 30, 2017 and  2016 (unaudited)

6

 

Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2017 and 2016 (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

54

Item 4.

Controls and Procedures

55

 

 

PART II—OTHER INFORMATION

 

 

 

 

Item 1.

Legal Proceedings

56

Item 1A.

Risk Factors

56

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

56

Item 3.

Defaults upon Senior Securities

56

Item 4.

Mine Safety Disclosures

56

Item 5.

Other Information

56

Item 6.

Exhibits

57

Signatures

58

 

 

 

2


PART I—FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

PROSPERITY BANCSHARES, INC.® AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

 

 

 

June 30,

 

 

December 31,

 

 

 

2017

 

 

2016

 

 

 

(Dollars in thousands, except par value)

 

ASSETS

 

 

 

 

 

 

 

 

Cash and due from banks

 

$

321,958

 

 

$

436,203

 

Federal funds sold

 

 

757

 

 

 

1,178

 

Total cash and cash equivalents

 

 

322,715

 

 

 

437,381

 

Available for sale securities, at fair value

 

 

253,130

 

 

 

221,176

 

Held to maturity securities, at cost (fair value of $9,301,875 and $9,339,455, respectively)

 

 

9,329,065

 

 

 

9,504,910

 

Total securities

 

 

9,582,195

 

 

 

9,726,086

 

Loans held for sale

 

 

26,094

 

 

 

26,975

 

Loans held for investment

 

 

9,837,925

 

 

 

9,595,085

 

Total loans

 

 

9,864,019

 

 

 

9,622,060

 

Less: allowance for credit losses

 

 

(83,783

)

 

 

(85,326

)

Loans, net

 

 

9,780,236

 

 

 

9,536,734

 

Accrued interest receivable

 

 

52,661

 

 

 

53,310

 

Goodwill

 

 

1,900,845

 

 

 

1,900,845

 

Core deposit intangibles, net

 

 

42,150

 

 

 

45,784

 

Bank premises and equipment, net

 

 

256,511

 

 

 

262,083

 

Other real estate owned

 

 

15,472

 

 

 

15,463

 

Bank owned life insurance (BOLI)

 

 

252,365

 

 

 

247,116

 

Federal Home Loan Bank of Dallas stock

 

 

69,510

 

 

 

55,430

 

Other assets

 

 

21,883

 

 

 

50,840

 

TOTAL ASSETS

 

$

22,296,543

 

 

$

22,331,072

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

LIABILITIES:

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

Noninterest-bearing

 

$

5,397,293

 

 

$

5,190,973

 

Interest-bearing

 

 

11,673,237

 

 

 

12,116,329

 

Total deposits

 

 

17,070,530

 

 

 

17,307,302

 

Other borrowings

 

 

1,035,506

 

 

 

990,781

 

Securities sold under repurchase agreements

 

 

346,324

 

 

 

320,430

 

Accrued interest payable

 

 

2,833

 

 

 

2,319

 

Other liabilities

 

 

105,162

 

 

 

67,929

 

Total liabilities

 

 

18,560,355

 

 

 

18,688,761

 

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; 69,488,012 shares issued and outstanding at June 30, 2017; 69,491,012 shares issued and  outstanding at December 31, 2016

 

 

69,488

 

 

 

69,491

 

Capital surplus

 

 

2,031,684

 

 

 

2,028,129

 

Retained earnings

 

 

1,633,150

 

 

 

1,543,280

 

Accumulated other comprehensive income—net unrealized gain on available for sale securities, net of tax of $1,005 and $760, respectively

 

 

1,866

 

 

 

1,411

 

Total shareholders’ equity

 

 

3,736,188

 

 

 

3,642,311

 

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY

 

$

22,296,543

 

 

$

22,331,072

 

 

See notes to consolidated financial statements.

 

3


PROSPERITY BANCSHARES, INC.® AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(UNAUDITED)

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

 

 

2017

 

 

2016

 

 

2017

 

 

2016

 

 

 

(Dollars in thousands, except per share data)

 

INTEREST INCOME:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans, including fees

 

$

114,975

 

 

$

118,297

 

 

$

226,685

 

 

$

242,819

 

Securities

 

 

52,912

 

 

 

51,097

 

 

 

106,069

 

 

 

103,670

 

Federal funds sold

 

 

160

 

 

 

65

 

 

 

343

 

 

 

161

 

Total interest income

 

 

168,047

 

 

 

169,459

 

 

 

333,097

 

 

 

346,650

 

INTEREST EXPENSE:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

 

11,441

 

 

 

10,045

 

 

 

21,349

 

 

 

20,251

 

Other borrowings

 

 

4,040

 

 

 

710

 

 

 

6,516

 

 

 

1,192

 

Securities sold under repurchase agreements

 

 

335

 

 

 

234

 

 

 

566

 

 

 

446

 

Junior subordinated debentures

 

 

 

 

 

3

 

 

 

 

 

 

37

 

Total interest expense

 

 

15,816

 

 

 

10,992

 

 

 

28,431

 

 

 

21,926

 

NET INTEREST INCOME

 

 

152,231

 

 

 

158,467

 

 

 

304,666

 

 

 

324,724

 

PROVISION FOR CREDIT LOSSES

 

 

2,750

 

 

 

6,000

 

 

 

5,425

 

 

 

20,000

 

NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES

 

 

149,481

 

 

 

152,467

 

 

 

299,241

 

 

 

304,724

 

NONINTEREST INCOME:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nonsufficient funds (NSF) fees

 

 

7,805

 

 

 

8,031

 

 

 

15,894

 

 

 

16,220

 

Credit card, debit card and ATM card income

 

 

6,186

 

 

 

5,929

 

 

 

12,139

 

 

 

11,756

 

Service charges on deposit accounts

 

 

5,405

 

 

 

4,610

 

 

 

10,826

 

 

 

9,200

 

Trust income

 

 

2,271

 

 

 

1,762

 

 

 

4,426

 

 

 

3,789

 

Mortgage income

 

 

1,107

 

 

 

1,772

 

 

 

2,373

 

 

 

3,243

 

Brokerage income

 

 

427

 

 

 

1,286

 

 

 

915

 

 

 

2,576

 

Net (loss) gain on sale of assets

 

 

(3,783

)

 

 

332

 

 

 

(2,024

)

 

 

1,352

 

Gain on sale of securities

 

 

3,270

 

 

 

 

 

 

3,270

 

 

 

 

Other

 

 

5,092

 

 

 

4,751

 

 

 

10,785

 

 

 

11,130

 

Total noninterest income

 

 

27,780

 

 

 

28,473

 

 

 

58,604

 

 

 

59,266

 

NONINTEREST EXPENSE:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

 

47,343

 

 

 

48,224

 

 

 

95,787

 

 

 

98,338

 

Net occupancy and equipment

 

 

5,460

 

 

 

5,741

 

 

 

10,963

 

 

 

11,365

 

Credit and debit card, data processing and software amortization

 

 

4,216

 

 

 

4,164

 

 

 

8,301

 

 

 

8,594

 

Regulatory assessments and FDIC insurance

 

 

3,548

 

 

 

3,447

 

 

 

7,097

 

 

 

6,877

 

Core deposit intangibles amortization

 

 

1,719

 

 

 

2,334

 

 

 

3,634

 

 

 

4,556

 

Depreciation

 

 

3,051

 

 

 

3,286

 

 

 

6,154

 

 

 

6,635

 

Communications

 

 

2,664

 

 

 

2,981

 

 

 

5,366

 

 

 

5,920

 

Other real estate expense

 

 

57

 

 

 

50

 

 

 

142

 

 

 

92

 

Other

 

 

8,384

 

 

 

9,008

 

 

 

17,060

 

 

 

17,386

 

Total noninterest expense

 

 

76,442

 

 

 

79,235

 

 

 

154,504

 

 

 

159,763

 

INCOME BEFORE INCOME TAXES

 

 

100,819

 

 

 

101,705

 

 

 

203,341

 

 

 

204,227

 

PROVISION FOR INCOME TAXES

 

 

32,265

 

 

 

33,634

 

 

 

66,222

 

 

 

67,205

 

NET INCOME

 

$

68,554

 

 

$

68,071

 

 

$

137,119

 

 

$

137,022

 

EARNINGS PER SHARE:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.99

 

 

$

0.98

 

 

$

1.97

 

 

$

1.96

 

Diluted

 

$

0.99

 

 

$

0.98

 

 

$

1.97

 

 

$

1.96

 

 

See notes to consolidated financial statements.

 

4


PROSPERITY BANCSHARES, INC.® AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(UNAUDITED)

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

 

 

2017

 

 

2016

 

 

2017

 

 

2016

 

 

 

(Dollars in thousands)

 

Net income

 

$

68,554

 

 

$

68,071

 

 

$

137,119

 

 

$

137,022

 

Other comprehensive gain, before tax:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Securities available for sale:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Change in unrealized gain during period

 

 

671

 

 

 

(790

)

 

 

700

 

 

 

(642

)

Total other comprehensive gain

 

 

671

 

 

 

(790

)

 

 

700

 

 

 

(642

)

Deferred taxes related to other comprehensive gain

 

 

(235

)

 

 

277

 

 

 

(245

)

 

 

225

 

Other comprehensive gain, net of tax

 

 

436

 

 

 

(513

)

 

 

455

 

 

 

(417

)

Comprehensive income

 

$

68,990

 

 

$

67,558

 

 

$

137,574

 

 

$

136,605

 

 

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, 2015

 

 

70,058,761

 

 

$

70,059

 

 

$

2,036,378

 

 

$

1,355,040

 

 

$

2,040

 

 

$

(607

)

 

$

3,462,910

 

Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

137,022

 

 

 

 

 

 

 

 

 

 

 

137,022

 

Other comprehensive income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(417

)

 

 

 

 

 

 

(417

)

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

 

 

23,800

 

 

 

24

 

 

 

174

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

198

 

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

 

 

 

 

 

 

 

 

 

 

5,166

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

5,166

 

Cash dividends declared, $0.6000 per share

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(41,760

)

 

 

 

 

 

 

 

 

 

 

(41,760

)

BALANCE AT JUNE 30, 2016

 

 

69,480,111

 

 

$

69,480

 

 

$

2,023,179

 

 

$

1,450,302

 

 

$

1,623

 

 

$

 

 

$

3,544,584

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BALANCE AT DECEMBER 31, 2016

 

 

69,491,012

 

 

$

69,491

 

 

$

2,028,129

 

 

$

1,543,280

 

 

$

1,411

 

 

$

 

 

$

3,642,311

 

Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

137,119

 

 

 

 

 

 

 

 

 

 

 

137,119

 

Other comprehensive income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

455

 

 

 

 

 

 

 

455

 

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

 

 

(3,000

)

 

 

(3

)

 

 

151

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

148

 

Stock based compensation expense

 

 

 

 

 

 

 

 

 

 

3,404

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3,404

 

Cash dividends declared, $0.6800 per share

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(47,249

)

 

 

 

 

 

 

 

 

 

 

(47,249

)

BALANCE AT JUNE 30, 2017

 

 

69,488,012

 

 

$

69,488

 

 

$

2,031,684

 

 

$

1,633,150

 

 

$

1,866

 

 

$

 

 

$

3,736,188

 

 

See notes to consolidated financial statements.

 

 

6


PROSPERITY BANCSHARES, INC.® AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

 

 

Six Months Ended

 

 

 

June 30,

 

 

 

2017

 

 

2016

 

 

 

(Dollars in thousands)

 

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

 

 

 

 

 

Net income

 

$

137,119

 

 

$

137,022

 

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

 

 

 

 

 

 

 

 

Depreciation and core deposit intangibles amortization

 

 

9,788

 

 

 

11,191

 

Provision for credit losses

 

 

5,425

 

 

 

20,000

 

Net amortization of premium on investments

 

 

19,286

 

 

 

20,660

 

Net (gain) loss on sale of other real estate

 

 

(81

)

 

 

333

 

Gain on sale of investment securities

 

 

(3,270

)

 

 

 

Net loss (gain) on sale of assets

 

 

2,024

 

 

 

(1,352

)

Net accretion of discount on loans

 

 

(9,224

)

 

 

(23,798

)

Net accretion of discount on deposits

 

 

(138

)

 

 

(360

)

Gain on sale of loans

 

 

(2,180

)

 

 

(2,961

)

Proceeds from sale of loans held for sale

 

 

110,953

 

 

 

128,340

 

Originations of loans held for sale

 

 

(108,374

)

 

 

(133,277

)

Stock based compensation expense

 

 

3,404

 

 

 

5,166

 

Decrease in accrued interest receivable and other assets

 

 

5,410

 

 

 

56,165

 

Increase in accrued interest payable and other liabilities

 

 

37,747

 

 

 

9,817

 

Net cash provided by operating activities

 

 

207,889

 

 

 

226,946

 

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM INVESTING ACTIVITIES:

 

 

 

 

 

 

 

 

Proceeds from maturities and principal paydowns of held to maturity securities

 

 

921,196

 

 

 

883,538

 

Purchase of held to maturity securities

 

 

(761,188

)

 

 

(395,228

)

Proceeds from maturities and principal paydowns of available for sale securities

 

 

7,221,960

 

 

 

7,314,308

 

Purchase of available for sale securities

 

 

(7,253,393

)

 

 

(7,351,075

)

Net (increase) decrease in loans held for investment

 

 

(241,520

)

 

 

27,634

 

Purchase of bank premises and equipment

 

 

(3,490

)

 

 

(3,361

)

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

 

 

6,996

 

 

 

6,910

 

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

 

 

 

 

 

(8,963

)

Net cash (used in) provided by investing activities

 

 

(109,439

)

 

 

473,763

 

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

 

 

 

 

 

 

Net increase (decrease) in noninterest-bearing deposits

 

 

206,320

 

 

 

(429,921

)

Net decrease in interest-bearing deposits

 

 

(442,954

)

 

 

(520,620

)

Net proceeds from other short-term borrowings

 

 

45,000

 

 

 

115,000

 

Repayments of other long-term borrowings

 

 

(275

)

 

 

(350

)

Net increase in securities sold under repurchase agreements

 

 

25,894

 

 

 

4,748

 

Redemption of junior subordinated debentures

 

 

 

 

 

(7,217

)

Proceeds from stock option exercises

 

 

148

 

 

 

198

 

Repurchase of common stock

 

 

 

 

 

(51,057

)

Payments of cash dividends

 

 

(47,249

)

 

 

(41,760

)

Net cash used in financing activities

 

 

(213,116

)

 

 

(930,979

)

NET DECREASE IN CASH AND CASH EQUIVALENTS

 

 

(114,666

)

 

 

(230,270

)

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD

 

 

437,381

 

 

 

563,962

 

CASH AND CASH EQUIVALENTS, END OF PERIOD

 

$

322,715

 

 

$

333,692

 

 

 

 

 

 

 

 

 

 

NONCASH ACTIVITIES:

 

 

 

 

 

 

 

 

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

 

$

 

 

$

32,522

 

Acquisition of real estate through foreclosure of collateral

 

 

1,371

 

 

 

13,855

 

 

 

 

 

 

 

 

 

 

SUPPLEMENTAL INFORMATION:

 

 

 

 

 

 

 

 

Income taxes paid

 

$

63,785

 

 

$

48,832

 

Interest paid

 

 

27,917

 

 

 

21,597

 

 

See notes to consolidated financial statements.

 

7


PROSPERITY BANCSHARES, INC.® AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2017

(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,” and together with Bancshares, 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, 2016. Operating results for the six-month period ended June 30, 2017 are not necessarily indicative of the results that may be expected for the year ending December 31, 2017 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 June 30,

 

 

Six Months Ended June 30,

 

 

 

2017

 

 

2016

 

 

2017

 

 

2016

 

 

 

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

 

$

68,554

 

 

 

 

 

 

$

68,071

 

 

 

 

 

 

$

137,119

 

 

 

 

 

 

$

137,022

 

 

 

 

 

Basic: