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Note 5 - Common Shares and Earnings Per Share

12 Months Ended

Dec. 31, 2019

Notes to Financial Statements

Stockholders Equity and Earnings per Share [Text Block]

5. Common Shares and Earnings per Share

Shelf Registration and Common Share Distribution Agreement

On May 3, 2018 the Company filed a shelf registration statement with the Securities and Exchange Commission (SEC) under which the Company may offer for sale, from time to time, either separately or together in any combination, equity, debt or other securities described in the shelf registration statement, which expires on May 3, 2021.

On November 8, 2019, the Company entered into a Distribution Agreement with KeyBanc Capital Markets Inc. (KeyBanc Capital Markets). Pursuant to the terms of the Distribution Agreement, the Company may offer and sell its common shares from time to time through KeyBanc, as the Company’s distribution agent for the offer and sale of the shares, up to an aggregate sales price of $75,000,000.

Under the Distribution Agreement, the Company will designate the minimum price and maximum number of common shares to be sold through KeyBanc on any given trading day or over a specified period of trading days, and KeyBanc will use commercially reasonable efforts to sell such shares on such days, subject to certain conditions. Sales of the shares, if any, will be made by means of ordinary brokers’ transactions on the Nasdaq Global Select Market at market prices or as otherwise agreed with KeyBanc. The Company may also agree to sell shares to KeyBanc, as principal for its own account, on terms agreed to by the Company and KeyBanc in a separate agreement at the time of sale. KeyBanc will receive from the Company a commission of up to 2% of the gross sales price per share for any shares sold through it as the Company’s distribution agent under the Distribution Agreement. The Company is not obligated to sell and KeyBanc is not obligated to buy or sell any of the shares under the Distribution Agreement. The shares, if issued, will be issued pursuant to the Company’s existing shelf registration statement.

2019 Common Stock Activity

Following is a reconciliation of the Company’s common shares outstanding from December 31, 2018 through December 31, 2019:

Common Shares Outstanding, December 31, 2018			39,664,884
Issuances:
At-the-Market Offering			347,000
Executive Stock Performance Awards (2016 awards earned)			102,198
Automatic Dividend Reinvestment and Share Purchase Plan:
Dividends Reinvested			29,599
Cash Invested			23,740
Vesting of Restricted Stock Units			29,100
Restricted Stock Issued to Directors			15,700
Directors Deferred Compensation			594
Retirements:
Shares Withheld for Individual Income Tax Requirements			(55,224	)
Common Shares Outstanding, December 31, 2019			40,157,591

2014 Stock Incentive Plan

The 2014 Stock Incentive Plan (2014 Incentive Plan), which was approved by the Company’s shareholders in April 2014, provides for the grant of stock options, stock appreciation rights, restricted stock, restricted stock units, performance awards, and other stock and stock-based awards. A total of 1,900,000 common shares were authorized for granting stock awards under the 2014 Incentive Plan, of which 1,010,110 were available for issuance as of December 31, 2019. The 2014 Incentive Plan terminates on December 13, 2023.

Employee Stock Purchase Plan

The 1999 Employee Stock Purchase Plan (Purchase Plan) allowed eligible employees to purchase the Company’s common shares through payroll withholding at a discount of up to 15% off the market price at the end of each six-month purchase period. For purchase periods between January 1, 2017 and June 30, 2019, the purchase price was 100% of the market price at the end of each six-month purchase period. For purchase periods beginning after June 30, 2019, the purchase price is 85% of the market price at the end of each six-month purchase period. Of the 1,400,000 common shares authorized to be issued under the Purchase Plan, 349,763 were available for purchase as of December 31, 2019. At the discretion of the Company, shares purchased under the Purchase Plan can be either new issue shares or shares purchased in the open market. To provide shares for purchases for the Purchase Plan, 13,432 common shares were issued in January 2020 for the purchase period ended December 31, 2019, 3,672 common shares were purchased in the open market in 2019, 7,757 common shares were purchased in the open market in 2018, and 4,202 common shares were purchased in the open market and 5,284 common shares were issued in 2017.

Dividend Reinvestment and Share Purchase Plan

On May 3, 2018, the Company filed a shelf registration statement with the SEC for the issuance of up to 1,500,000 common shares under the Company's Automatic Dividend Reinvestment and Share Purchase Plan (the Plan), which permits shares purchased by participants in the Plan to be either new issue common shares or common shares purchased in the open market. The shelf registration for the Plan expires on May 3, 2021. In October 2019, the Company began issuing new shares to satisfy the requirements of the Plan. In 2019, 53,339 common shares were issued, and 109,807 shares were purchased in the open market to provide shares for the Plan. In 2018, 116,822 common shares were purchased in the open market to provide shares for the Plan. Although shares are purchased on the open market, they must be sold under the registration statement due to the features of the plan, leaving 1,220,032 common shares available for purchase or issuance under the Plan as of December 31, 2019. The shelf registration statement replaced the Company’s prior shelf registration statement, which provided for the issuance of up to 1,500,000 common shares under the Plan. Common shares purchased in the open market under the Plan pursuant to the Company’s prior shelf registration statement totaled 53,853 in 2018 and 87,634 in 2017. New common shares issued under the Plan pursuant to the Company’s prior shelf registration statement totaled 97,698 in 2017.

Earnings Per Share

The numerator used in the calculation of both basic and diluted earnings per common share is net income with no adjustments in 2019, 2018 and 2017. The denominator used in the calculation of basic earnings per common share is the weighted average number of common shares outstanding during the period excluding nonvested restricted shares granted to the Company’s directors and employees, which are considered contingently returnable and not outstanding for the purpose of calculating basic earnings per share. The denominator used in the calculation of diluted earnings per common share is derived by adjusting basic shares outstanding for the items listed in the following reconciliations.

		2019				2018				2017
Weighted Average Common Shares Outstanding – Basic			39,720,847				39,599,944				39,457,261
Plus Outstanding Share Awards net of Share Reductions for Unrecognized Stock-Based Compensation Expense and Excess Tax Benefits:
Shares Expected to be Awarded for Stock Performance Awards Granted to Executive Officers based on Measurement Period-to-Date Performance			147,001				212,043				210,784
Underlying Shares Related to Nonvested Restricted Stock Units Granted to Employees			65,421				59,980				56,952
Nonvested Restricted Shares			15,377				17,751				20,380
Shares Expected to be Issued Under the Employee Stock Purchase Plan			3,228				-				-
Shares Expected to be Issued Under the Deferred Compensation Program for Directors			1,952				2,478				2,970
Total Dilutive Shares			232,979				292,252				291,086
Weighted Average Common Shares Outstanding – Diluted			39,953,826				39,892,196				39,748,347

The effect of dilutive shares on earnings per share for the years ended December 31, 2019, 2018 and 2017, resulted in no differences greater than $0.016 between basic and diluted earnings per share in any period.