10-Q 1 pb-10q_20170930.htm 10-Q pb-10q_20170930.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, 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 November 2, 2017, there were 69,484,012 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, 2017 and December 31, 2016 (unaudited)

3

 

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

4

 

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

5

 

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

6

 

Consolidated Statements of Cash Flows for the Nine Months Ended September 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

55

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)

 

 

 

September 30,

 

 

December 31,

 

 

 

2017

 

 

2016

 

 

 

(Dollars in thousands, except par value)

 

ASSETS

 

 

 

 

 

 

 

 

Cash and due from banks

 

$

302,469

 

 

$

436,203

 

Federal funds sold

 

 

1,007

 

 

 

1,178

 

Total cash and cash equivalents

 

 

303,476

 

 

 

437,381

 

Available for sale securities, at fair value

 

 

233,651

 

 

 

221,176

 

Held to maturity securities, at cost (fair value of $9,154,725 and $9,339,455, respectively)

 

 

9,176,871

 

 

 

9,504,910

 

Total securities

 

 

9,410,522

 

 

 

9,726,086

 

Loans held for sale

 

 

25,473

 

 

 

26,975

 

Loans held for investment

 

 

9,885,729

 

 

 

9,595,085

 

Total loans

 

 

9,911,202

 

 

 

9,622,060

 

Less: allowance for credit losses

 

 

(86,812

)

 

 

(85,326

)

Loans, net

 

 

9,824,390

 

 

 

9,536,734

 

Accrued interest receivable

 

 

52,532

 

 

 

53,310

 

Goodwill

 

 

1,900,845

 

 

 

1,900,845

 

Core deposit intangibles, net

 

 

40,464

 

 

 

45,784

 

Bank premises and equipment, net

 

 

256,011

 

 

 

262,083

 

Other real estate owned

 

 

14,512

 

 

 

15,463

 

Bank owned life insurance (BOLI)

 

 

253,751

 

 

 

247,116

 

Federal Home Loan Bank of Dallas stock

 

 

61,815

 

 

 

55,430

 

Other assets

 

 

24,945

 

 

 

50,840

 

TOTAL ASSETS

 

$

22,143,263

 

 

$

22,331,072

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

LIABILITIES:

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

Noninterest-bearing

 

$

5,465,474

 

 

$

5,190,973

 

Interest-bearing

 

 

11,442,002

 

 

 

12,116,329

 

Total deposits

 

 

16,907,476

 

 

 

17,307,302

 

Other borrowings

 

 

960,365

 

 

 

990,781

 

Securities sold under repurchase agreements

 

 

334,621

 

 

 

320,430

 

Accrued interest payable

 

 

3,121

 

 

 

2,319

 

Other liabilities

 

 

156,322

 

 

 

67,929

 

Total liabilities

 

 

18,361,905

 

 

 

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; 69,484,012 shares issued and outstanding at September 30, 2017; 69,491,012 shares issued and  outstanding at December 31, 2016

 

 

69,484

 

 

 

69,491

 

Capital surplus

 

 

2,033,379

 

 

 

2,028,129

 

Retained earnings

 

 

1,677,432

 

 

 

1,543,280

 

Accumulated other comprehensive income—net unrealized gain on available for sale securities, net of tax of $572 and $760, respectively

 

 

1,063

 

 

 

1,411

 

Total shareholders’ equity

 

 

3,781,358

 

 

 

3,642,311

 

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY

 

$

22,143,263

 

 

$

22,331,072

 

 

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,

 

 

 

2017

 

 

2016

 

 

2017

 

 

2016

 

 

 

(Dollars in thousands, except per share data)

 

INTEREST INCOME:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans, including fees

 

$

121,567

 

 

$

116,247

 

 

$

348,252

 

 

$

359,066

 

Securities

 

 

50,610

 

 

 

48,132

 

 

 

156,679

 

 

 

151,802

 

Federal funds sold

 

 

242

 

 

 

81

 

 

 

585

 

 

 

242

 

Total interest income

 

 

172,419

 

 

 

164,460

 

 

 

505,516

 

 

 

511,110

 

INTEREST EXPENSE:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

 

12,376

 

 

 

9,396

 

 

 

33,725

 

 

 

29,647

 

Other borrowings

 

 

3,540

 

 

 

752

 

 

 

10,056

 

 

 

1,944

 

Securities sold under repurchase agreements

 

 

356

 

 

 

248

 

 

 

922

 

 

 

694

 

Junior subordinated debentures

 

 

 

 

 

 

 

 

 

 

 

37

 

Total interest expense

 

 

16,272

 

 

 

10,396

 

 

 

44,703

 

 

 

32,322

 

NET INTEREST INCOME

 

 

156,147

 

 

 

154,064

 

 

 

460,813

 

 

 

478,788

 

PROVISION FOR CREDIT LOSSES

 

 

6,900

 

 

 

2,000

 

 

 

12,325

 

 

 

22,000

 

NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES

 

 

149,247

 

 

 

152,064

 

 

 

448,488

 

 

 

456,788

 

NONINTEREST INCOME:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nonsufficient funds (NSF) fees

 

 

8,350

 

 

 

8,764

 

 

 

24,244

 

 

 

24,984

 

Credit card, debit card and ATM card income

 

 

6,075

 

 

 

5,903

 

 

 

18,214

 

 

 

17,659

 

Service charges on deposit accounts

 

 

5,251

 

 

 

4,698

 

 

 

16,077

 

 

 

13,898

 

Trust income

 

 

2,040

 

 

 

1,851

 

 

 

6,466

 

 

 

5,640

 

Mortgage income

 

 

854

 

 

 

2,143

 

 

 

3,227

 

 

 

5,386

 

Brokerage income

 

 

461

 

 

 

1,213

 

 

 

1,376

 

 

 

3,789

 

Net gain (loss) on sale of assets

 

 

62

 

 

 

37

 

 

 

(1,962

)

 

 

1,389

 

Gain on sale of securities

 

 

 

 

 

 

 

 

3,270

 

 

 

 

Other

 

 

5,716

 

 

 

5,075

 

 

 

16,501

 

 

 

16,205

 

Total noninterest income

 

 

28,809

 

 

 

29,684

 

 

 

87,413

 

 

 

88,950

 

NONINTEREST EXPENSE:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

 

47,866

 

 

 

48,328

 

 

 

143,653

 

 

 

146,666

 

Net occupancy and equipment

 

 

5,691

 

 

 

5,997

 

 

 

16,654

 

 

 

17,362

 

Credit and debit card, data processing and software amortization

 

 

4,506

 

 

 

4,207

 

 

 

12,807

 

 

 

12,801

 

Regulatory assessments and FDIC insurance

 

 

3,455

 

 

 

3,434

 

 

 

10,552

 

 

 

10,311

 

Core deposit intangibles amortization

 

 

1,686

 

 

 

2,418

 

 

 

5,320

 

 

 

6,974

 

Depreciation

 

 

3,050

 

 

 

3,289

 

 

 

9,204

 

 

 

9,924

 

Communications

 

 

2,618

 

 

 

2,870

 

 

 

7,984

 

 

 

8,790

 

Other real estate expense

 

 

(30

)

 

 

44

 

 

 

112

 

 

 

136

 

Other

 

 

8,667

 

 

 

8,889

 

 

 

25,727

 

 

 

26,275

 

Total noninterest expense

 

 

77,509

 

 

 

79,476

 

 

 

232,013

 

 

 

239,239

 

INCOME BEFORE INCOME TAXES

 

 

100,547

 

 

 

102,272

 

 

 

303,888

 

 

 

306,499

 

PROVISION FOR INCOME TAXES

 

 

32,639

 

 

 

33,621

 

 

 

98,861

 

 

 

100,826

 

NET INCOME

 

$

67,908

 

 

$

68,651

 

 

$

205,027

 

 

$

205,673

 

EARNINGS PER SHARE:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.98

 

 

$

0.99

 

 

$

2.95

 

 

$

2.95

 

Diluted

 

$

0.98

 

 

$

0.99

 

 

$

2.95

 

 

$

2.95

 

 

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,

 

 

 

2017

 

 

2016

 

 

2017

 

 

2016

 

 

 

(Dollars in thousands)

 

Net income

 

$

67,908

 

 

$

68,651

 

 

$

205,027

 

 

$

205,673

 

Other comprehensive loss, before tax:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Securities available for sale:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Change in unrealized gain during period

 

 

(1,236

)

 

 

(186

)

 

 

(536

)

 

 

(828

)

Total other comprehensive loss

 

 

(1,236

)

 

 

(186

)

 

 

(536

)

 

 

(828

)

Deferred tax benefit related to other comprehensive loss

 

 

433

 

 

 

65

 

 

 

188

 

 

 

290

 

Other comprehensive loss, net of tax

 

 

(803

)

 

 

(121

)

 

 

(348

)

 

 

(538

)

Comprehensive income

 

$

67,105

 

 

$

68,530

 

 

$

204,679

 

 

$

205,135

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

205,673

 

 

 

 

 

 

 

 

 

 

 

205,673

 

Other comprehensive income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(538

)

 

 

 

 

 

 

(538

)

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

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BALANCE AT DECEMBER 31, 2016

 

 

69,491,012

 

 

$

69,491

 

 

$

2,028,129

 

 

$

1,543,280

 

 

$

1,411

 

 

$

 

 

$

3,642,311

 

Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

205,027

 

 

 

 

 

 

 

 

 

 

 

205,027

 

Other comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(348

)

 

 

 

 

 

 

(348

)

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

 

 

(7,000

)

 

 

(7

)

 

 

155

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

148

 

Stock based compensation expense

 

 

 

 

 

 

 

 

 

 

5,095

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

5,095

 

Cash dividends declared, $1.0200 per share

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(70,875

)

 

 

 

 

 

 

 

 

 

 

(70,875

)

BALANCE AT SEPTEMBER 30, 2017

 

 

69,484,012

 

 

$

69,484

 

 

$

2,033,379

 

 

$

1,677,432

 

 

$

1,063

 

 

$

 

 

$

3,781,358

 

 

See notes to consolidated financial statements.

 

 

6


PROSPERITY BANCSHARES, INC.® AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

 

 

Nine Months Ended

 

 

 

September 30,

 

 

 

2017

 

 

2016

 

 

 

(Dollars in thousands)

 

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

 

 

 

 

 

Net income

 

$

205,027

 

 

$

205,673

 

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

 

 

 

 

 

 

 

 

Depreciation and core deposit intangibles amortization

 

 

14,524

 

 

 

16,898

 

Provision for credit losses

 

 

12,325

 

 

 

22,000

 

Net amortization of premium on investments

 

 

29,401

 

 

 

31,972

 

Net (gain) loss on sale of other real estate

 

 

(221

)

 

 

330

 

Gain on sale of investment securities

 

 

(3,270

)

 

 

 

Net loss (gain) on sale of assets

 

 

1,962

 

 

 

(1,389

)

Net accretion of discount on loans

 

 

(17,110

)

 

 

(31,418

)

Net amortization of premium on deposits

 

 

(178

)

 

 

(935

)

Gain on sale of loans

 

 

(3,007

)

 

 

(4,910

)

Proceeds from sale of loans held for sale

 

 

151,645

 

 

 

205,137

 

Originations of loans held for sale

 

 

(148,297

)

 

 

(208,095

)

Stock based compensation expense

 

 

5,095

 

 

 

7,237

 

Decrease in accrued interest receivable and other assets

 

 

9,307

 

 

 

63,096

 

Increase in accrued interest payable and other liabilities

 

 

89,195

 

 

 

46,744

 

Net cash provided by operating activities

 

 

346,398

 

 

 

352,340

 

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM INVESTING ACTIVITIES:

 

 

 

 

 

 

 

 

Proceeds from maturities and principal paydowns of held to maturity securities

 

 

1,367,648

 

 

 

1,410,155

 

Purchase of held to maturity securities

 

 

(1,065,091

)

 

 

(655,865

)

Proceeds from maturities and principal paydowns of available for sale securities

 

 

7,239,733

 

 

 

8,123,458

 

Purchase of available for sale securities

 

 

(7,253,393

)

 

 

(8,151,073

)

Net (increase) decrease in loans held for investment

 

 

(284,836

)

 

 

135,818

 

Purchase of bank premises and equipment

 

 

(6,643

)

 

 

(3,933

)

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

 

 

8,879

 

 

 

7,206

 

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

 

 

 

 

 

(8,963

)

Net cash provided by investing activities

 

 

6,297

 

 

 

856,803

 

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

 

 

 

 

 

 

Net increase (decrease) in noninterest-bearing deposits

 

 

274,501

 

 

 

(287,225

)

Net decrease in interest-bearing deposits

 

 

(674,149

)

 

 

(961,271

)

Net repayments of other short-term borrowings

 

 

(30,000

)

 

 

(65,000

)

Repayments of other long-term borrowings

 

 

(416

)

 

 

(483

)

Net increase in securities sold under repurchase agreements

 

 

14,191

 

 

 

3,196

 

Redemption of junior subordinated debentures

 

 

 

 

 

(7,217

)

Proceeds from stock option exercises

 

 

148

 

 

 

667

 

Repurchase of common stock

 

 

 

 

 

(51,057

)

Payments of cash dividends

 

 

(70,875

)

 

 

(62,602

)

Net cash used in financing activities

 

 

(486,600

)

 

 

(1,430,992

)

NET DECREASE IN CASH AND CASH EQUIVALENTS

 

 

(133,905

)

 

 

(221,849

)

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD

 

 

437,381

 

 

 

563,962

 

CASH AND CASH EQUIVALENTS, END OF PERIOD

 

$

303,476

 

 

$

342,113

 

 

 

 

 

 

 

 

 

 

NONCASH ACTIVITIES:

 

 

 

 

 

 

 

 

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

 

$

 

 

$

32,522

 

Acquisition of real estate through foreclosure of collateral

 

 

1,483

 

 

 

14,583

 

 

 

 

 

 

 

 

 

 

SUPPLEMENTAL INFORMATION:

 

 

 

 

 

 

 

 

Income taxes paid

 

$

64,150

 

 

$

83,275

 

Interest paid

 

 

43,901

 

 

 

30,722

 

 

See notes to consolidated financial statements.

 

7


PROSPERITY BANCSHARES, INC.® AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 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 nine-month period ended September 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 September 30,

 

 

Nine Months Ended September 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

 

$

67,908

 

 

 

 

 

 

$

68,651

 

 

 

 

 

 

$

205,027

 

 

 

 

 

 

$

205,673

 

 

 

 

 

Basic: