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Stockholders' Equity
12 Months Ended
Dec. 31, 2019
Stockholders' Equity Note [Abstract]  
Stockholders' Equity
Stockholders’ Equity
(a) Earnings Per Common Share
The following table illustrates the reconciliation of weighted average shares used for earnings per common share computations for the years ended December 31, 2019, 2018 and 2017:
 
Year Ended December 31,
 
2019
 
2018
 
2017
 
(In thousands)
Net income:
 
 
 
 
 
Net income
$
67,557

 
$
53,057

 
$
41,791

Dividends and undistributed earnings allocated to participating securities(1)
(57
)
 
(223
)
 
(293
)
Net income allocated to common shareholders
$
67,500

 
$
52,834

 
$
41,498

Basic:
 
 
 
 
 
Weighted average common shares outstanding
36,789,244

 
35,281,408

 
29,937,400

Restricted stock awards
(31,014
)
 
(87,405
)
 
(179,581
)
Total basic weighted average common shares outstanding
36,758,230

 
35,194,003

 
29,757,819

Diluted:
 
 
 
 
 
Basic weighted average common shares outstanding
36,758,230

 
35,194,003

 
29,757,819

Effect of potentially dilutive common shares(2)
227,536

 
177,587

 
91,512

Total diluted weighted average common shares outstanding
36,985,766

 
35,371,590

 
29,849,331


(1) Represents dividends paid and undistributed earnings allocated to nonvested restricted stock awards.
(2) Represents the effect of the assumed exercise of stock options and vesting of restricted stock awards and units.
Potential dilutive shares are excluded from the computation of earnings per share if their effect is anti-dilutive. Anti-dilution occurs when the exercise price of a stock option or the unrecognized compensation cost per share of a restricted stock award exceeds the market price of the Company’s stock. For the year ended December 31, 2019, there were 1,501 anti-dilutive shares outstanding, respectively. For the years ended December 31, 2018 and 2017, there were no anti-dilutive shares outstanding.
(b) Dividends
The timing and amount of cash dividends paid on the Company's common stock depends on the Company’s earnings, capital requirements, financial condition and other relevant factors. Dividends on common stock from the Company depend substantially upon receipt of dividends from the Bank, which is the Company’s predominant source of income.
The following table summarizes the dividend activity for the years ended December 31, 2019, 2018 and 2017:
Declared
 
Cash Dividend per Share
 
Record Date
 
Paid Date
 
 
January 25, 2017
 
$0.12
 
February 9, 2017
 
February 23, 2017
 
 
April 25, 2017
 
$0.13
 
May 10, 2017
 
May 24, 2017
 
 
July 25, 2017
 
$0.13
 
August 10, 2017
 
August 24, 2017
 
 
October 25, 2017
 
$0.13
 
November 8, 2017
 
November 22, 2017
 
 
October 25, 2017
 
$0.10
 
November 8, 2017
 
November 22, 2017
 
*
January 24, 2018
 
$0.15
 
February 7, 2018
 
February 21, 2018
 
 
April 25, 2018
 
$0.15
 
May 10, 2018
 
May 24, 2018
 
 
July 24, 2018
 
$0.15
 
August 9, 2018
 
August 23, 2018
 
 
October 24, 2018
 
$0.17
 
November 7, 2018
 
November 21, 2018
 
 
October 24, 2018
 
$0.10
 
November 7, 2018
 
November 21, 2018
 
*
January 23, 2019
 
$0.18
 
February 7, 2019
 
February 21, 2019
 
 
April 24, 2019
 
$0.18
 
May 8, 2019
 
May 22, 2019
 
 
July 24, 2019
 
$0.19
 
August 8, 2019
 
August 22, 2019
 
 
October 23, 2019
 
$0.19
 
November 7, 2019
 
November 21, 2019
 
 
October 23, 2019
 
$0.10
 
November 7, 2019
 
November 21, 2019
 
*

* Denotes a special dividend.
The FDIC and the Washington State Department of Financial Institutions, Division of Banks have the authority under their supervisory powers to prohibit the payment of dividends by the Bank to the Company. Additionally, current guidance from the Federal Reserve provides, among other things, that dividends per share on the Company’s common stock generally should not exceed earnings per share, measured over the previous four fiscal quarters. Current regulations allow the Company and the Bank to pay dividends on their common stock if the Company’s or the Bank’s regulatory capital would not be reduced below the statutory capital requirements set by the Federal Reserve and the FDIC.
(c) Stock Repurchase Program
The Company has had various stock repurchase programs since March 1999. On October 23, 2014, the Company's Board of Directors authorized the repurchase of up to 5% of the Company's outstanding common shares, or approximately 1,513,000 shares, under the eleventh stock repurchase plan. The number, timing and price of shares repurchased will depend on business and market conditions, and other factors, including opportunities to deploy the Company's capital.
Since the inception of the eleventh plan, the Company has repurchased 872,678 shares at an average share price of $20.03. During the year ended December 31, 2019, 292,712 shares were repurchased with an average share price of $26.50. No shares were repurchased under this plan during the years ended December 31, 2018 and 2017.
In addition to the stock repurchases under a plan, the Company repurchases shares to pay withholding taxes on the vesting of restricted stock awards and units. The following table provides repurchased shares for the periods indicated:
 
Year Ended December 31,
 
2019
 
2018
 
2017
Repurchased shares to pay withholding taxes (1)
28,479

 
53,256

 
29,429

Stock repurchase to pay withholding taxes average share price
$
30.83

 
$
31.99

 
$
25.01

(1) During the year ended December 31, 2018, the Company repurchased 26,741 shares related to the withholding taxes due on the accelerated vesting of the restricted stock units of Puget Sound which were converted to Heritage common stock shares with an average share price of $31.80 under the terms of the Puget Sound Merger. See Note (2) Business Combinations.
(d) Issuance of Common Stock
In conjunction with the Premier Merger effective on July 2, 2018 and the Puget Sound Merger effective on January 16, 2018, Heritage issued 2,848,579 and 4,112,258 shares, respectively, of the Company's common stock at
the merger date share price of $34.85 and $31.80, respectively, for a fair value of $99.3 million and $130.8 million, respectively.
In addition, common stock was issued during the years ended December 31, 2019, 2018, and 2017 related to the exercise of stock options and issuance of restricted stock awards as further described in Note (20) Stock-Based Compensation.