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, 2023

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 stock units (“PSUs”) 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				Nine Months Ended
	September 30,				September 30,
	2023		2022		2023		2022
	(dollars in thousands, except per share amounts)
Basic EPS
Net income	$	18,796	$	27,169	$	61,408	$	72,915
Less: income allocated to unvested restricted stock		117		163		381		408
Income allocated to common shares	$	18,679	$	27,006	$	61,027	$	72,507
Weighted-average shares for basic EPS		30,251,961		30,314,439		30,296,991		30,289,068
Basic EPS (1)	$	0.62	$	0.89	$	2.01	$	2.39

Effect of dilutive stock options and unvested performance stock units		40,910		82,323		41,686		80,470

Diluted EPS
Income allocated to common shares	$	18,679	$	27,006	$	61,027	$	72,507
Weighted-average shares for diluted EPS		30,292,872		30,396,762		30,338,678		30,369,538
Diluted EPS (1)	$	0.62	$	0.89	$	2.01	$	2.39

(1)

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

On a weighted-average basis, options to purchase 61,000 shares of common stock were excluded from the calculation of diluted earnings per share for the three and nine months ended September 30, 2023, because their effect would have been anti-dilutive. There were no anti-dilutive stock options for the three and nine months ended September 30, 2022. There were 54,765 and 50,460 anti-dilutive unvested PSUs outstanding for the three and nine months ended September 30, 2023, respectively.

During the nine months ended September 30, 2023, the Company issued 53,696 PSUs to executive officers from the 2021 Equity Compensation Plan with a fair value of $1.1 million. During the nine months ended September 30, 2022, the Company issued 38,036 PSUs to executive officers from the 2021 Equity Compensation Plan with a fair value of $1.0 million on the grant date of March 23, 2022. These units have a three-year cliff vesting period and include dividend equivalent rights. During the nine months ended September 30, 2023, 35,906 PSUs vested to an executive officer. Total PSUs outstanding as of September 30, 2023 were 134,358 with an aggregate grant fair value of $2.9 million. Total PSUs outstanding as of September 30, 2022 were 104,599 with an aggregate grant fair value of $2.0 million.