Hanmi Financial Corporation Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Share-Based Compensation

Share-Based Compensation

3 Months Ended

Mar. 31, 2019

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Share-Based Compensation Expense

For the three months ended March 31, 2019 and 2018, share-based compensation expenses were $711,000 and $884,000, respectively, and net tax benefits recognized from stock option and restricted stock awards were $213,000 and $247,000, respectively. Excess tax benefits related to the Company's share-based compensation are recognized as income tax expense in the consolidated statement of income.

Unrecognized Share-Based Compensation Expense

As of March 31, 2019, unrecognized share-based compensation expense was as follows:



	Unrecognized Expense		Average Expected Recognition Period
	(in thousands)
Restricted stock awards	$	3,315	1.8 years

There was no unrecognized share-based compensation expense for stock options at March 31, 2019.

Stock Option Awards

The table below provides stock option information for the three months ended March 31, 2019:



	Number of Shares		Weighted- Average Exercise Price Per Share		Weighted- Average Remaining Contractual Life	Aggregate Intrinsic Value of In-the- Money Options
						(in thousands)
Options outstanding at beginning of period	338,338		$	17.52	4.9 years	$	1,213	⁽¹⁾
Options exercised	(650	)	$	12.54	3.9 years	5
Options outstanding at end of period	337,688		$	17.53	4.6 years	$	1,356	⁽²⁾

Options exercisable at end of period	337,688		$	17.53	4.6 years	$	1,356	⁽²⁾


⁽¹⁾	Intrinsic value represents the excess of the closing stock price on the last trading day of the period, which was $19.70 as of December 31, 2018, over the exercise price, multiplied by the number of options.


⁽²⁾	Intrinsic value represents the excess of the closing stock price on the last trading day of the period, which was $21.27 as of March 31, 2019, over the exercise price, multiplied by the number of options.

Restricted Stock Awards

Restricted stock awards under the outstanding equity plans become fully vested after a certain number of years or after certain performance criteria are met. Hanmi Financial becomes entitled to an income tax deduction in an amount equal to the taxable income reported by the holders of the restricted shares when the restrictions are released and the shares are issued. Restricted shares are forfeited if officers and employees terminate prior to the lapsing of restrictions. Forfeitures of restricted stock are treated as canceled shares.

The table below provides information for restricted stock awards for the period indicated:



	Three Months Ended March 31, 2019
	Number of Shares		Weighted- Average Grant Date Fair Value Per Share
Restricted stock at beginning of period	304,595		$	21.98
Restricted stock granted	1,670		$	19.84
Restricted stock vested	(69,170	)	$	27.99
Restricted stock forfeited	(50,801	)	$	12.10
Restricted stock at end of period	186,294		$	22.31