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, 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 shares of common stock 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 shares of common stock 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 the then-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 shares of common stock. For diluted EPS, weighted-average number of shares of common stock 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:



	Net Income (Numerator)		Weighted- Average Shares (Denominator)	Per Share Amount (1)
	(In thousands, except share and per share data)
Year Ended December 31, 2017
Basic EPS
Net income	$	54,660	32,071,585	$	1.71
Less: Income allocated to unvested restricted stock	339		32,071,585	0.01
Basic EPS	$	54,321	32,071,585	$	1.70
Effect of dilutive securities - options, warrants and unvested restricted stock			178,333
Diluted EPS
Net income	$	54,660	32,249,918	$	1.70
Less: Income allocated to unvested restricted stock	339		32,249,918	0.01
Diluted EPS	$	54,321	32,249,918	$	1.69

Year Ended December 31, 2016
Basic EPS
Net income	$	56,489	31,899,582	$	1.77
Less: Income allocated to unvested restricted stock	457		31,899,582	0.01
Basic EPS	$	56,032	31,899,582	$	1.76
Effect of dilutive securities - options, warrants and unvested restricted stock			149,122
Diluted EPS
Net income	$	56,489	32,048,704	$	1.76
Less: Income allocated to unvested restricted stock	457		32,048,704	0.01
Diluted EPS	$	56,032	32,048,704	$	1.75

Year Ended December 31, 2015
Basic EPS
Income from continuing operations, net of taxes	$	53,823	31,788,215	$	1.69
Loss from discontinued operations, net of taxes	145		31,788,215	—
Basic EPS	$	53,678	31,788,215	$	1.69
Effect of dilutive securities - options, warrants and unvested restricted stock			88,605
Diluted EPS
Income from continuing operations, net of taxes	$	53,823	31,876,820	$	1.68
Loss from discontinued operations, net of taxes	145		31,876,820	—
Diluted EPS	$	53,678	31,876,820	$	1.68

(1) Per share amounts may not be able to be recalculated using net income and weighted-average shares presented above due to rounding.

There were no anti-dilutive options and shares of unvested restricted stock outstanding for the years ended December 31, 2017. For the years ended December 31, 2016 and 2015, there were 74,389 and 30,250 options 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.