Hanmi Financial Corporation Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

Earnings per Share

Earnings per Share

12 Months Ended

Dec. 31, 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:



	Year Ended December 31, 2015
Basic EPS	(in thousands, except for share and per share data)
Net Income	$	53,823
Less: income allocated to unvested restricted shares	145
Income allocated to common shares	53,678
Weighted-average shares for basic EPS	31,788,215
Basic EPS	$	1.69

Diluted EPS
Income allocated to common shares	$	53,678
Weighted-average shares for diluted EPS	31,876,820
Diluted EPS	$	1.68



	Net Income (Numerator)			Weighted- Average Shares (Denominator)	Per Share Amount
	(In thousands, except share and per share data)
Year Ended December 31, 2014
Basic EPS
Income from continuing operations, net of taxes	$	50,205		31,696,100	$	1.58
Income from discontinued operations, net of taxes	(444		)	31,696,100	(0.01		)
Basic EPS	$	49,761		31,696,100	$	1.57
Effect of dilutive securities - options, warrants and unvested restricted stock	—			281,964	$	(0.01	)
Diluted EPS
Income from continuing operations, net of taxes	$	50,205		31,978,064	$	1.57
Income from discontinued operations, net of taxes	(444		)	31,978,064	(0.01		)
Diluted EPS	$	49,761		31,978,064	$	1.56
Year Ended December 31, 2013
Basic EPS
Income from continuing operations, net of taxes	$	39,784		31,598,913	$	1.26
Income from discontinued operations, net of taxes	73			31,598,913	—
Basic EPS	$	39,857		31,598,913	$	1.26
Effect of dilutive securities - options, warrants and unvested restricted stock	—			97,607	—
Diluted EPS
Income from continuing operations, net of taxes	$	39,784		31,696,520	$	1.26
Income from discontinued operations, net of taxes	73			31,696,520	—
Diluted EPS	$	39,857		31,696,520	$	1.26

For the years ended December 31, 2015, 2014 and 2013, there were 30,250, 85,850 and 60,400 options, warrants and shares of unvested restricted stock outstanding, respectively, that were not included in the computation of diluted EPS because their effect would be anti-dilutive.