Hanmi Financial Corporation Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Earnings Per Share

Earnings Per Share

9 Months Ended

Sep. 30, 2015

Earnings per share (“EPS”) is calculated on both a basic and a diluted basis. Basic EPS excludes dilution and is computed by dividing income available to common stockholders by the weighted-average number of common shares outstanding for the period. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted from the issuance of common stock that then shared in earnings, excluding common shares in treasury.

Unvested restricted stock is excluded from the calculation of weighted-average number of common shares for basic EPS. For diluted EPS, weighted-average number of common shares included the impact of restricted stock under the treasury method. The Company amended all restricted stock agreements as of September 1, 2015 to allow for the payment of non-forfeitable dividends on unvested restricted stock, accordingly, we adopted the two-class method for EPS calculation pursuant to ASC 260-10, Earnings Per Share. Unvested restricted stock containing rights to non-forfeitable dividends are considered participating securities prior to vesting and have been included in the earnings allocation in computing basic and diluted EPS under the two-class method. Basic EPS is computed by dividing net income, net of income allocated to participating securities, by the weighted-average number of common shares. For diluted EPS, weighted-average number of common shares include the diluted effect of stock options.

The following table is a reconciliation of the components used to derive basic and diluted EPS for the periods indicated:



	Three Months Ended		Nine Months Ended
	(in thousands, except for share and per share data)
September 30, 2015
Basic EPS
Net income	$	13,959	$	38,997
Less: income allocated to unvested restricted shares	78		78
Income allocated to common shares	13,881		38,919
Weighted-average shares for basic EPS	31,799,573		31,774,047
Basic EPS	$	0.44	$	1.22
Diluted EPS
Income allocated to common shares	$	13,881	$	38,919
Weighted-average shares for diluted EPS	31,909,808		31,855,024
Diluted EPS	$	0.44	$	1.22



	Three Months Ended					Nine Months Ended
	Net Income (Numerator)		Weighted-Average Shares (Denominator)	Per Share Amount		Net Income (Numerator)			Weighted-Average Shares (Denominator)	Per Share Amount
	(in thousands, except share and per share data)
September 30, 2014
Basic EPS
Income from continuing operations, net of tax	$	21,800	31,708,581	$	0.69	$	44,276		31,683,288	$	1.39
Income from discontinued operations, net of tax	—		31,708,581	—		(444		)	31,683,288	(0.01		)
Basic EPS	$	21,800	31,708,581	$	0.69	$	43,832		31,683,288	$	1.38
Effect of dilutive securities - options and unvested restricted stock			292,838						284,588
Diluted EPS
Income from continuing operations, net of tax	$	21,800	32,001,419	$	0.68	$	44,276		31,967,876	$	1.39
Income from discontinued operations, net of tax	—		32,001,419	—		(444		)	31,967,876	(0.01		)
Diluted EPS	$	21,800	32,001,419	$	0.68	$	43,832		31,967,876	$	1.38

For the three and nine months ended September 30, 2015 stock options totaling 29,000 and 57,000, respectively, were not included in the computation of diluted EPS. For the three and nine months ended September 30, 2014, stock options totaling 136,850 and 86,850, respectively, were not included in the computation of diluted EPS.