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, 2016

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 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
	(In thousands, except share and per share data)
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
Net income	$	53,823		31,788,215	$	1.69
Less: Income allocated to unvested restricted stock	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
Net income	$	53,823		31,876,820	$	1.68
Less: Income allocated to unvested restricted stock	145			31,876,820	—
Diluted EPS	$	53,678		31,876,820	$	1.68

Year Ended December 31, 2014
Basic EPS
Income from continuing operations, net of taxes	$	50,205		31,696,100	$	1.58
Loss 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
Diluted EPS
Income from continuing operations, net of taxes	$	50,205		31,978,064	$	1.57
Loss from discontinued operations, net of taxes	(444		)	31,978,064	(0.01		)
Diluted EPS	$	49,761		31,978,064	$	1.56

For the years ended December 31, 2016, 2015 and 2014, there were 74,389, 30,250 and 85,850 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.