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, 2017

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.

For diluted EPS, weighted-average number of common shares included the impact of restricted stock under the treasury method. 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 September 30,				Nine Months Ended September 30,
	2017		2016		2017		2016
	(in thousands, except for share and per share data)
Basic EPS:
Net income	$	14,923	$	13,121	$	43,162	$	42,073
Less: income allocated to unvested restricted shares	93		81		270		258
Income allocated to common shares	$	14,830	$	13,040	$	42,892	$	41,815
Weighted-average shares for basic EPS	32,095,286		31,912,470		32,058,705		31,880,466
Basic EPS	$	0.46	$	0.41	$	1.34	$	1.31

Effect of dilutive securities - options and unvested restricted stock	160,528		175,763		171,614		150,829

Diluted EPS:
Income allocated to common shares	$	14,830	$	13,040	$	42,892	$	41,815
Weighted-average shares for diluted EPS	32,255,814		32,088,233		32,230,319		32,031,295
Diluted EPS	$	0.46	$	0.41	$	1.33	$	1.31

There were no stock options with an anti-dilutive effect for the three and nine months ended September 30, 2017. For the three and nine months ended September 30, 2016, 12,034 and 74,389 stock options, respectively, were not included in the computation of diluted EPS because their effect was anti-dilutive.