Compensation and Employee Benefit Plans [Text Block]

3 Months Ended

Mar. 31, 2018

Notes

Compensation and Employee Benefit Plans

At March 31, 2018, there were 846,300 shares available for future stock-based compensation grants under IHC’s stock incentive plans. The following table summarizes share-based compensation expense, which is included in selling, general and administrative expenses on the Condensed Consolidated Statements of

Income, applicable to the IHC plans, by award type for each of the periods indicated (in thousands):

		Three Months Ended
		March 31,
		2018		2017
IHC’s Share-based Compensation Plan:
Stock options	$	180	$	35
Restricted stock units		46		31
SARs		86		(65)
Share-based compensation expense, pre-tax		312		1
Tax benefits		104		-
Share-based compensation expense, net	$	208	$	1

Stock Options

The IHC’s stock option activity during 2018 was as follows:

	Shares	Weighted- Average
	Under Option	Exercise Price
December 31, 2017	692,380	$	16.62
Granted	13,000		31.30
Exercised	(6,600)		9.09
March 31, 2018	698,780	$	16.96

The weighted average grant date fair value of options granted during the three months ended March 31, 2018 was $9.77. No options were granted in the comparable period of 2017. The assumptions set forth in the table below were used to value the stock options granted during the period indicated:

	2018
Weighted-average risk-free interest rate	2.64%
Expected annual dividend rate per share	0.95%
Expected volatility factor of the Company's common stock	35.80%
Weighted-average expected term of options	4.5 years

In 2018, IHC received $60,000 in cash from the exercise of stock options with an aggregate intrinsic value of $119,000 and recognized $21,000 of tax benefits.

The following table summarizes information regarding IHC’s outstanding and exercisable options:

		March 31, 2018
		Outstanding		Exercisable
Number of options		698,780		382,113
Weighted average exercise price per share	$	16.96	$	10.58
Aggregate intrinsic value for all options (in thousands)	$	13,057	$	9,580
Weighted average contractual term remaining		2.6 years		1.1 years

At March 31, 2018, the total unrecognized compensation cost related to IHC’s non-vested stock options was $1,851,000 and it is expected to be recognized as compensation expense over a weighted average period of 2.2 years.

Restricted Stock

At both March 31, 2018 and December 31, 2017, there were 18,975 unvested restricted stock units outstanding with a weighted average grant-date fair value of $22.91 per share.

At March 31, 2018, the total unrecognized compensation cost related to non-vested restricted stock unit awards was $352,000 and is expected to be recognized as compensation expense over a weighted average period of 2.0 years.

SARs

IHC had 64,900 SAR awards outstanding at both March 31, 2018 and December 31, 2017 with corresponding liabilities of $108,000 and $22,000 for those periods, respectively, that are included in Other Liabilities in the Company’s Condensed Consolidated Balance Sheets.