Note 6 - Stock-based Compensation

3 Months Ended

Mar. 31, 2018

Notes to Financial Statements

Disclosure of Compensation Related Costs, Share-based Payments [Text Block]

6

.

Stock-Based Compensation

Under the Company’s equity incentive plans, directors and eligible employees

may

be granted incentive or non-statutory stock options and/or restricted stock units or awarded non-vested stock. As of

March 31, 2018,

there were

no

stock options outstanding.

There were

35,880

and

18,040

stock option shares exercised in the

first

quarter ended

March 31, 2018

and

2017,

respectively. The Company received

$838,000

from the exercise of stock options for

35,880

shares at

$23.37

per share which had an aggregate intrinsic value of

$718,000

during the

first

quarter ended

March 31, 2018

compared to

$422,000

from the exercise of stock options which had an aggregate intrinsic value of

$262,000

during the

first

quarter ended

March 31, 2017.

The Company granted restricted stock units for

122,674

shares at an average closing price of

$43.50

per share in the

first

quarter of

2018.

The Company granted restricted stock units for

87,781

shares at an average closing price of

$38.59

per share in

2017.

In

December 2013,

the Company granted performance share unit awards in which the number of units earned is calculated based on the relative total shareholder return (“TSR”) of the Company’s common stock as compared to the TSR of the KBW Regional Banking Index. In addition, the Company granted performance share unit awards in which the number of units earned is determined by comparison to the targeted EPS as defined in the award for the

2014

to

2016

period. In

December 2016,

in addition to TSR and EPS awards, the Company granted performance share unit awards in which the number of units earned is determined by comparison to the targeted return of assets ROA as defined in the award for

December 2016.

 In

December 2014,

the Company granted additional performance TSR restricted stock units for

60,456

shares and performance EPS restricted stock units for

57,642

shares to

seven

executive officers. In

December 2015,

the Company granted additional performance TSR restricted stock units for

61,209

shares and performance EPS restricted stock units for

57,409

shares to

seven

executive officers. In

December 2016,

the Company granted additional performance TSR restricted stock units for

30,319

shares, performance EPS restricted stock units for

58,241

shares, and performance ROA restricted stock units for

29,119

shares to

seven

executive officers. In

December 2017,

the Company granted additional performance TSR restricted stock units for

23,556

shares and performance ROA restricted stock units for

22,377

shares to

six

executive officers. In

March 2018,

the Company granted performance EPS restricted stock units for

55,455

shares to

six

executive officers. Performance TSR, performance EPS, and performance ROA share awarded are scheduled to vest

three

years from grant date.

The following table presents restricted stock unit activity during the

three

months ended

March 31, 2018:

	Units
Balance at December 31, 2017		561,610
Granted		178,129
Distributed		(109,454	)
Forfeited		(4,010	)
Balance at March 31, 2018		626,275

The compensation expense recorded for restricted stock units was

$1.5

million for the

three

months ended

March 31, 2018,

compared to

$1.2

million in the same period a year ago. Unrecognized stock-based compensation expense related to restricted stock units was

$15.1

million as of

March 31, 2018

and is expected to be recognized over the next

2.3

years.

As of

March 31, 2018,

2,608,672

shares were available under the Company’s

2005

Incentive Plan (as Amended and Restated) for future grants.

Tax benefit from share-based payment arrangements of

$0.7

 million reduced income tax expense in the

first

quarter of

2018

compared to

$2.6

million in the same period a year ago.