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

6 Months Ended

Jun. 30, 2022

Note 9 — Earnings Per Share

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, the weighted-average number of common shares includes the impact of unvested performance-based 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.

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

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
	(dollars in thousands, except per share amounts)
Basic EPS
Net income	$	25,050	$	22,122	$	45,745	$	38,781
Less: income allocated to unvested restricted stock		150		175		261		295
Income allocated to common shares	$	24,900	$	21,947	$	45,484	$	38,486
Weighted-average shares for basic EPS		30,296,897		30,442,993		30,271,761		30,452,320
Basic EPS ⁽¹⁾	$	0.82	$	0.72	$	1.50	$	1.26

Effect of dilutive stock options and unvested performance stock units		115,451		77,463		119,512		73,800

Diluted EPS
Income allocated to common shares	$	24,900	$	21,947	$	45,484	$	38,486
Weighted-average shares for diluted EPS		30,412,348		30,520,456		30,391,273		30,526,120
Diluted EPS ⁽¹⁾	$	0.82	$	0.72	$	1.50	$	1.26

⁽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 stock options outstanding for the three months ended June 30, 2022 or 2021.

During the six months ended June 30, 2022, the Company issued 38,036 performance stock units to executive officers from the 2021 Equity Compensation plan fair valued at $954,700 on the grant date of March 23, 2022. During the six months ended June 30, 2021, the Company issued 42,626 performance stock units to executive officers from the 2013 Equity Compensation Plan fair valued at $784,000 on the grant date of March 24, 2021. These units have a three-year cliff vesting period and include dividend equivalent rights. Total performance stock units outstanding as of June 30, 2022 were 104,599 with an aggregate grant fair value of $2.0 million. As of June 30, 2022 and 2021, there were 104,599 and 66,563 performance stock units outstanding, respectively. In accordance with the treasury method, unvested performance stock units were included in the weighted average number of common shares for the diluted EPS calculation in the table above.