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Note 12 - Stockholders' Equity and Earnings Per Share
 12 Months Ended
Dec. 31, 2018
Notes to Financial Statements  
Earnings Per Share [Text Block]
12.
Stockholders’ Equity and Earnings per Share
 
As a bank holding company, the Bancorp’s ability to pay dividends will depend upon the dividends it receives from the Bank and on the income it
may
generate from any other activities in which it
may
engage, either directly or through other subsidiaries.
 
Under California banking law, the Bank
may
not,
without regulatory approval, pay a cash dividend that exceeds the lesser of the Bank’s retained earnings or its net income for the last
three
fiscal years, less any cash distributions made during that period. Under this regulation, the amount of retained earnings available for cash dividends to the Company immediately after
December 31, 2018,
is restricted to approximately
$189.0
million.
 
Activity in accumulated other comprehensive income, net of tax, and reclassification out of accumulated other comprehensive income for the years ended
December 31, 2018,
and
2017
was as follows:
 
   
2018
    
2017
  
   
Pre-tax
    
Tax expense/
(benefit)
    
Net-of-tax
    
Pre-tax
    
Tax 
expense/
(benefit)
    
Net-of-tax
  
Beginning balance, loss, net of tax
  
(In thousands)
  
Securities available-for-sale
    
 
      
 
     $
(1,060
 )    
 
      
 
     $
(1,545
 )
Cash flow hedge derivatives
    
 
      
 
      
(1,451
 )    
 
      
 
      
(2,170
 )
Total
    
 
      
 
     $
(2,511
 )    
 
      
 
     $
(3,715
 )
Reclassification adjustment for stranded tax effects of Tax Cuts and Jobs Act
(1)
    
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
Securities available-for-sale
    
-
      
200
      
(200
 )    
-
      
-
      
-
  
Cash flow hedge derivatives
    
-
      
315
      
(315
 )    
-
      
-
      
-
  
Total
    
-
      
515
      
(515
 )    
-
      
-
      
-
  
Reclassification adjustment for equity securities
(2)
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
Equity securities
    
(12,147
 )    
(3,591
 )    
(8,556
 )    
-
      
-
      
-
  
Net unrealized (losses)/gains arising during the period
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
Securities available-for-sale
   $
(11,263
 )   $
(3,329
 )   $
(7,934
 )   $
1,843
     $
775
     $
1,068
  
Cash flow hedge derivatives
    
2,165
      
640
      
1,525
      
1,241
      
522
      
719
  
Total
    
(9,098
 )    
(2,689
 )    
(6,409
 )    
3,084
      
1,297
      
1,787
  
Reclassification adjustment for net gains in net income
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
Securities available-for-sale
    
(22
 )    
(7
 )    
(15
 )    
(1,006
 )    
(423
 )    
(583
 )
Cash flow hedge derivatives
    
-
      
-
      
-
      
-
      
-
      
-
  
Total
    
(22
 )    
(7
 )    
(15
 )    
(1,006
 )    
(423
 )    
(583
 )
Total other comprehensive (loss)/income
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
Securities available-for-sale
    
(11,285
 )    
(3,336
 )    
(7,949
 )    
837
      
352
      
485
  
Cash flow hedge derivatives
    
2,165
      
640
      
1,525
      
1,241
      
522
      
719
  
Total
   $
(9,120
 )   $
(2,696
 )   $
(6,424
 )   $
2,078
     $
874
     $
1,204
  
Ending balance, (loss)/gain, net of tax
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
Securities available-for-sale
    
 
      
 
     $
(17,765
 )    
 
      
 
     $
(1,060
 )
Cash flow hedge derivatives
    
 
      
 
      
(241
 )    
 
      
 
      
(1,451
 )
Total
    
 
      
 
     $
(18,006
 )    
 
      
 
     $
(2,511
 )
 
(
1
) These amounts were recorded as of
January 1, 2018
as a result of the adoption of ASU
2018
-
2.
(
2
) This amount was recorded as of
January 1, 2018
as a result of the adoption of ASU
2016
-
1.
 
The Board of Directors of the Bancorp is authorized to issue preferred stock in
one
or more series and to fix the voting powers, designations, preferences or other rights of the shares of each such class or series and the qualifications, limitations, and restrictions thereon. Any preferred stock issued by the Bancorp
may
rank prior to the Bancorp common stock as to dividend rights, liquidation preferences, or both,
may
have full or limited voting rights, and
may
be convertible into shares of the Bancorp common stock.
 
The following is the reconciliation of the numerators and denominators of the basic and diluted earnings per share computations for the years as indicated:
 
   
Year Ended December 31,
  
   
2018
    
2017
    
2016
  
   
 
 
 
  
 
 
 
  
Per
    
 
 
 
  
 
 
 
  
Per
    
 
 
 
  
 
 
 
  
Per
  
   
Income
    
Shares
    
Share
    
Income
    
Shares
    
Share
    
Income
    
Shares
    
Share
  
   
(Numerator)
    
(Denominator)
    
Amount
    
(Numerator)
    
(Denominator)
    
Amount
    
(Numerator)
    
(Denominator)
    
Amount
  
   
(In thousands, except shares and per share data)
  
Net income
   $
271,885
      
 
      
 
     $
176,042
      
 
      
 
     $
175,099
      
 
      
 
  
Basic EPS, income
   $
271,885
      
81,131,269
     $
3.35
     $
176,042
      
80,262,782
     $
2.19
     $
175,099
      
79,153,762
     $
2.21
  
Effect of dilutive stock options
    
 
      
476,077
      
 
      
 
      
741,768
      
 
      
 
      
775,500
      
 
  
                                                                         
Diluted EPS, income
   $
271,885
      
81,607,346
     $
3.33
     $
176,042
      
81,004,550
     $
2.17
     $
175,099
      
79,929,262
     $
2.19