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Note 7 - Employee and Director Benefits
 6 Months Ended
Jun. 30, 2020
Notes to Financial Statements  
Share-based Payment Arrangement [Text Block]

NOTE 7 - EMPLOYEE AND DIRECTOR BENEFITS

 

Stock Options

 

The Company has a stock-based compensation plan as described below. The compensation cost that has been charged to earnings for the plan was $353,000 and $629,000 for the three and six months ended June 30, 2020 and $206,000 and $488,000 for the three and six months ended June 30, 2019.

 

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. The plan allows 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 plan 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.

 

  

2019

 

Expected volatility

  40.00

%

Expected dividends

  1.74

%

Expected term (in years)

  6.7 

Risk-free rate

  2.55

%

 

There were no grants of stock options during the six months ended June 30, 2020. The weighted average grant-date fair value of options granted during the six months ended June 30, 2019 was $12.60.

 

The following table summarizes stock option activity during the six months ended June 30, 2020 and June 30, 2019:

 

          

Weighted

     
      

Weighted

  

Average

     
      

Average

  

Remaining

  

Aggregate

 
      

Exercise

  

Contractual

  

Intrinsic

 
  

Shares

  

Price

  

Term (years)

  

Value

 
              

(In Thousands)

 

Six Months Ended June 30, 2020:

                

Outstanding at January 1, 2020

  965,248  $15.19   4.9  $21,911 

Granted

  -   -   -   - 

Exercised

  (236,000)  10.36   3.1   5,995 

Forfeited

  (18,000)  30.79   6.6   90 

Outstanding at June 30, 2020

  711,248   18.21   5.3  $13,808 
                 

Exercisable at June 30, 2020

  236,500  $12.76   3.6  $5,446 
                 

Six Months Ended June 30, 2019:

                

Outstanding at January 1, 2019

  1,238,748  $13.02   5.2  $23,355 

Granted

  10,500   34.44   9.7   (2)

Exercised

  (188,500)  5.58   1.8   5,014 

Forfeited

  (13,000)  29.93   7.4   56 

Outstanding at June 30, 2019

 
 
1,047,748   14.37   5.3  $21,233 
                 

Exercisable at June 30, 2019

  328,800  $8.13   3.7  $8,964 

 

As of June 30, 2020, there was approximately $949,000 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 1.1 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, 2020, there was $1.9 million of total unrecognized compensation cost related to non-vested restricted stock. The cost is expected to be recognized evenly over the remaining 3.0 years of the restricted stock’s vesting period.

 

The following table summarizes restricted stock activity during the six months ended June 30, 2020 and 2019, respectively:

 

  

Shares

  

Weighted Average Grant Date Fair Value

 

Six Months Ended June 30, 2020:

        

Non-vested at January 1, 2020

  71,290  $31.53 

Granted

  25,567   36.29 

Vested

  (18,828)  23.06 

Forfeited

  -   - 

Non-vested at June 30, 2020

  78,029   35.14 
         

Six Months Ended June 30, 2019:

        

Non-vested at January 1, 2019

  44,076  $38.44 

Granted

  23,474   34.03 

Vested

  (5,200)  20.31 

Forfeited

  (2,500)  38.17 

Non-vested at June 30, 2019

  59,850   38.95