Note 13 - Stockholders' Equity and Earnings Per Share

12 Months Ended

Dec. 31, 2023

Notes to Financial Statements

Earnings Per Share [Text Block]

13.         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, 2023, is restricted to approximately $420.4 million. The amount of retained earnings available for cash dividends is restricted to approximately $296.2 million for December 31,2022.

Activity in accumulated other comprehensive income, net of tax, and reclassification out of accumulated other comprehensive income for the years ended December 31, 2023, and 2022 was as follows:

	2023									2022
	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							$	(104,832	)							$	211
Cash flow hedge derivatives								2,537									(3,276	)
Total							$	(102,295	)							$	(3,065	)
Net unrealized gains/(losses) arising during the period
Securities available-for-sale	$	24,315		$	7,786		$	16,529		$	(149,124	)	$	(44,081	)	$	(105,043	)
Cash flow hedge derivatives		(2,503	)		(740	)		(1,763	)		10,864			3,211			7,653
Total		21,812			7,046			14,766			(138,260	)		(40,870	)		(97,390	)
Reclassification adjustment for net gains/(losses) in net income
Securities available-for-sale		3,000			887			2,113			—			—			—
Cash flow hedge derivatives		—			—			—			(2,612	)		(772	)		(1,840	)
Total		3,000			887			2,113			(2,612	)		(772	)		(1,840	)
Total other comprehensive income/(loss)
Securities available-for-sale		27,315			8,673			18,642			(149,124	)		(44,081	)		(105,043	)
Cash flow hedge derivatives		(2,503	)		(740	)		(1,763	)		8,252			2,439			5,813
Total	$	24,812		$	7,933		$	16,879		$	(140,872	)	$	(41,642	)	$	(99,230	)
Ending balance, gain/(loss), net of tax
Securities available-for-sale							$	(86,190	)							$	(104,832	)
Cash flow hedge derivatives								774									2,537
Total							$	(85,416	)							$	(102,295	)

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. There are no shares of preferred stock currently issued and outstanding.

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,
	2023						2022						2021
					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	$	354,124					$	360,642					$	298,304
Basic EPS, income	$	354,124		72,573,025	$	4.88	$	360,642		74,337,265	$	4.85	$	298,304		78,268,369	$	3.81
Effect of dilutive stock options and RSU				289,603						327,470						302,269
Diluted EPS, income	$	354,124		72,862,628	$	4.86	$	360,642		74,664,735	$	4.83	$	298,304		78,570,638	$	3.80