Shareholders’ Equity and Earnings Per Share

9 Months Ended

Sep. 30, 2017

Shareholders’ Equity and Earnings Per Share.

Shareholders' Equity and Earnings Per Share

2) Shareholders’ Equity and Earnings Per Share

On September 12, 2016, the Company, entered into Exchange Agreements with Castle Creek Capital Partners IV, LP, Patriot Financial Partners, L.P. and Patriot Financial Partners Parallel, L.P. (collectively “Preferred Stockholders”) providing for the exchange of 21,004 shares of the Company’s Series C convertible perpetual preferred stock, no par value (“ Series C Preferred Stock”), for 5,601,000 shares of the Company’s common stock, no par value. The exchange ratio was equal to the equivalent number of shares the Preferred Stockholders would have received upon conversion of the Series C Preferred Stock into the Company’s common stock.

Earnings Per Share -- Basic earnings per common share is computed by dividing net income, less dividends and discount accretion on preferred stock, by the weighted average common shares outstanding. The Series C Preferred Stock participated in the earnings of the Company prior to the exchange for common stock and, therefore, the shares issued on the conversion of the Series C Preferred Stock were considered outstanding under the two class method of computing basic earnings per common share during periods of earnings. Diluted earnings per share reflect potential dilution from outstanding stock options using the treasury stock method. A reconciliation of these factors used in computing basic and diluted earnings per common share is as follows:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2017		2016		2017		2016
		(Dollars in thousands, except per share amounts)
Net income available to common shareholders	$	8,583	$	6,261	$	22,570	$	18,654
Less: undistributed earnings allocated to Series C
Preferred Stock		—		(300)		—		(1,278)
Distributed and undistributed earnings allocated to common shareholders	$	8,583	$	5,961	$	22,570	$	17,376
Weighted average common shares outstanding for basic earnings per common share		38,152,633		33,397,704		38,060,224		32,591,784
Dilutive effect of stock options outstanding, using the treasury stock method		428,665		295,624		504,910		272,071
Shares used in computing diluted earnings per common share		38,581,298		33,693,328		38,565,134		32,863,855
Basic earnings per share	$	0.22	$	0.18	$	0.59	$	0.53
Diluted earnings per share	$	0.22	$	0.18	$	0.59	$	0.53