Quarterly report pursuant to Section 13 or 15(d)

Share-Based Compensation

v3.19.3
Share-Based Compensation
9 Months Ended
Sep. 30, 2019
Share-based Payment Arrangement [Abstract]  
Share-Based Compensation Share-Based Compensation

Share-Based Compensation Expense

For the three months ended September 30, 2019 and 2018, share-based compensation expenses were $895,000 and $850,000, respectively, and net tax benefits recognized from stock option and restricted stock awards were $268,000 and $238,000, respectively. For the nine months ended September 30, 2019 and 2018, share-based compensation expenses were $2.3 million and $2.7 million, respectively, and net tax benefits recognized from stock option and restricted stock awards were $680,000 and $746,000, respectively. Excess tax benefits (incremental tax charges) relating to the Company's vested or exercised share-based compensation are recognized as income tax expense in the consolidated statement of income.

Unrecognized Share-Based Compensation Expense

As of September 30, 2019, unrecognized share-based compensation expense was as follows:
 
Unrecognized
Expense
 
Average Expected
Recognition
Period
 
(in thousands)
 
 
Restricted stock awards
$
5,329

 
2.1 years


There was no unrecognized share-based compensation expense for stock options at September 30, 2019.

Stock Option Awards

The table below provides stock option information for the three months ended September 30, 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
336,438

 
$
17.55

 
4.4 years
 
$
1,162

(1) 
Options exercised
(180,000
)
 
$
16.43

 
4.2 years
 
754

 
Options outstanding at end of period
156,438

 
$
18.84

 
4.4 years
 
$
407

(2) 
 
 
 
 
 
 
 
 
 
Options exercisable at end of period
156,438

 
$
18.84

 
4.4 years
 
$
407

(2) 

(1) 
Intrinsic value represents the excess of the closing stock price on the last trading day of the period, which was $22.27 as of June 30, 2019, 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 $18.78 as of September 30, 2019, over the exercise price, multiplied by the number of options.

There were 180,000 stock options exercised during the three months ended September 30, 2019 and no stock options exercised during the three months ended September 30, 2018.

The table below provides stock option information for the nine months ended September 30, 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

 
4.6 years
 
$
1,356

(1) 
Options exercised
(181,900
)
 
$
16.38

 
4.6 years
 
604

 
Options outstanding at end of period
156,438

 
$
18.84

 
4.4 years
 
$
407

(2) 
 
 
 
 
 
 
 
 
 
Options exercisable at end of period
156,438

 
$
18.84

 
4.4 years
 
$
407

(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 $18.78 as of September 30, 2019, over the exercise price, multiplied by the number of options.

There were 181,900 and 25,750 stock options exercised during the nine months ended September 30, 2019 and 2018.

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 employment prior to the lapsing of restrictions or if performance criteria are not met. 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 
September 30, 2019
 
Nine Months Ended 
September 30, 2019
 
Number of
Shares
 
Weighted-
Average
Grant Date
Fair Value
Per Share
 
Number of
Shares
 
Weighted-
Average
Grant Date
Fair Value
Per Share
Restricted stock at beginning of period
286,199

 
$
23.19

 
304,595

 
$
21.98

Restricted stock granted
20,914

 
$
22.09

 
172,609

 
22.17

Restricted stock vested
(4,105
)
 
$
25.60

 
(90,064
)
 
27.99

Restricted stock forfeited
(1,044
)
 
$
23.29

 
(85,176
)
 
11.74

Restricted stock at end of period
301,964

 
$
23.07

 
301,964

 
23.07