Quarterly report pursuant to Section 13 or 15(d)

Share-Based Compensation

v3.5.0.2
Share-Based Compensation
6 Months Ended
Jun. 30, 2016
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]  
Share-Based Compensation
Share-Based Compensation

Share-Based Compensation Expense

The Company adopted ASU 2016-09 during the three months ended March 31, 2016. Adoption of this ASU did not have a material impact on the Company's financial statements. As a result of adoption of this ASU, excess tax benefits related to the Company's share-based compensation were recognized as income tax expense in the consolidated statement of income during the six months ended June 30, 2016. For the three months ended June 30, 2016, and 2015, share-based compensation expenses were $923,000 and $494,000, respectively, and net tax benefits recognized from stock option exercises and restricted stock awards were $366,000 and $161,000, respectively. For the six months ended June 30, 2016, and 2015, share-based compensation expenses were $1.5 million and $1.0 million, respectively, and net tax benefits recognized from stock option exercises and restricted stock awards were $604,000 and $337,000, respectively.

Unrecognized Share-Based Compensation Expense

As of June 30, 2016, unrecognized share-based compensation expense was as follows:
 
Unrecognized
Expense
 
Average Expected
Recognition
Period
 
(in thousands)
 
 
Stock option awards
$
252

 
0.9 years
Restricted stock awards
4,426

 
2.4 years
Total unrecognized share-based compensation expense
$
4,678

 
2.3 years


The table below provides stock option information for the three months ended June 30, 2016:
 
Number of
Shares
 
Weighted-
Average
Exercise
Price Per
Share
 
Weighted-
Average
Remaining
Contractual
Life
 
Aggregate
Intrinsic
Value of
In-the-
Money
Options
 
 
(in thousands, except per share data)
 
Options outstanding at beginning of period
484,439

 
$
23.76

 
7.1 years
 
$
2,303

(1) 
Options exercised
(18,000
)
 
$
12.30

 
5.9 years
 

 
Options expired
(15,875
)
 
$
144.18

 
0.2 years
 

 
Options outstanding at end of period
450,564

 
$
19.97

 
7.2 years
 
$
2,727

(2) 
 
 
 
 
 
 
 
 
 
Options exercisable at end of period
301,915

 
$
20.73

 
6.9 years
 
$
1,972

(2) 
                              
(1) 
Intrinsic value represents the excess of the closing stock price on the last trading day of the period, which was $22.02 as of March 31, 2016, over the exercise price, multiplied by the number of options.
(2) 
Intrinsic value represents the excess of the closing stock price on the last trading day of the period, which was $23.49 as of June 30, 2016, over the exercise price, multiplied by the number of options.

The table below provides stock option information for the six months ended June 30, 2016:
 
Number of
Shares
 
Weighted-
Average
Exercise
Price Per
Share
 
Weighted-
Average
Remaining
Contractual
Life
 
Aggregate
Intrinsic
Value of
In-the-
Money
Options
 
 
(in thousands, except per share data)
 
Options outstanding at beginning of period
510,148

 
$
24.38

 
7.3 years
 
$
3,219

(1) 
Options exercised
(40,209
)
 
$
13.99

 
6.4 years
 

 
Options forfeited
(125
)
 
$
144.00

 
0.2 years
 

 
Options expired
(19,250
)
 
$
148.36

 
0.1 years
 

 
Options outstanding at end of period
450,564

 
$
19.97

 
7.2 years
 
$
2,727

(2) 
 
 
 
 
 
 
 
 
 
Options exercisable at end of period
301,915

 
$
20.73

 
6.9 years
 
$
1,972

(2) 
                              
(1) 
Intrinsic value represents the excess of the closing stock price on the last trading day of the period, which was $23.72 as of December 31, 2015, over the exercise price, multiplied by the number of options.
(2) 
Intrinsic value represents the excess of the closing stock price on the last trading day of the period, which was $23.49 as of June 30, 2016, over the exercise price, multiplied by the number of options.

There were 18,000 and 6,874 stock options exercised during the three months ended June 30, 2016 and 2015, respectively, and 40,209 and 26,455 stock options exercised during the six months ended June 30, 2016 and 2015, respectively.

Restricted Stock Awards

Restricted stock awards under the Company’s 2007 and 2013 Equity Compensation Plans typically vest over three years and are subject to forfeiture if employment terminates prior to the lapse of restrictions. Hanmi Financial becomes entitled to an income tax deduction in an amount equal to the taxable income reported by the holders of the restricted shares when the restrictions are released and the shares are issued. Forfeited shares of restricted stock become available for future grants upon forfeiture.

The table below provides information for restricted stock awards for the three and six months ended June 30, 2016:
 
Three Months Ended 
 June 30, 2016
 
Six Months Ended 
 June 30, 2016
 
Number of
Shares
 
Weighted-
Average
Grant Date
Fair Value
Per Share
 
Number of
Shares
 
Weighted-
Average
Grant Date
Fair Value
Per Share
Restricted stock at beginning of period
387,860

 
$
16.52

 
136,795

 
$
20.74

Restricted stock granted
2,512

 
$
23.08

 
256,943

 
$
14.41

Restricted stock vested
(31,501
)
 
$
22.50

 
(34,200
)
 
$
22.48

Restricted stock forfeited

 
$

 
(667
)
 
$
22.25

Restricted stock at end of period
358,871

 
$
16.04

 
358,871

 
$
16.04