Compensation and Employee Benefit Plans [Text Block]

6 Months Ended

Jun. 30, 2018

Notes

Compensation and Employee Benefit Plans

At June 30, 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				Six Months Ended
		June 30,				June 30,
		2018		2017		2018		2017
IHC’s Share-based Compensation Plan:
Stock options	$	188	$	35	$	369	$	69
Restricted stock units		44		27		90		58
SARs		39		119		125		53
Share-based compensation expense, pre-tax		271		181		584		180
Tax benefits		90		72		195		72
Share-based compensation expense, net	$	181	$	109	$	389	$	108

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	(11,933)		11.21
June 30, 2018	693,447	$	16.99

The weighted average grant date fair value of options granted during the six months ended June 30, 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 $134,000 in cash from the exercise of stock options with an aggregate intrinsic value of $235,000 and recognized $43,000 of tax benefits.

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

		June 30, 2018
		Outstanding		Exercisable
Number of options		693,447		376,780
Weighted average exercise price per share	$	16.99	$	10.53
Aggregate intrinsic value for all options (in thousands)	$	11,277	$	8,560
Weighted average contractual term remaining		2.3 years		0.9 years

At June 30, 2018, the total unrecognized compensation cost related to IHC’s non-vested stock options was $1,662,000 and it is expected to be recognized as compensation expense over a weighted average period of 2.0 years.

Restricted Stock

The following table summarized restricted stock activity for the six months ended June 30, 2018: 

	No. Of	Weighted-Average
	Non-vested	Grant-Date
	Shares	Fair Value
December 31, 2017	18,975	$	22.91
Vested	(2,475)		11.78
June 30, 2018	16,500	$	24.58

The total fair value of restricted stock that vested during the first six months of 2018 and 2017 was $92,000 and $94,000, respectively. IHC granted no restricted stock awards during the six months ended June 30, 2018 and 2017

At June 30, 2018, the total unrecognized compensation cost related to non-vested restricted stock unit awards was $308,000 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 June 30, 2018 and December 31, 2017 with corresponding liabilities of $147,000 and $22,000 for those periods, respectively, that are included in Other Liabilities in the Company’s Condensed Consolidated Balance Sheets.