NOTE 12 — STOCKHOLDERS’ EQUITY AND EARNINGS PER SHARE

Warrant — The Company acquired MetroCorp Bancshares, Inc., (“MetroCorp”) on January 17, 2014. Prior to the acquisition, MetroCorp had an outstanding warrant to purchase 771,429 shares of its common stock. Upon the acquisition, the rights of the warrant holder were converted into the right to acquire 230,282 shares of East West’s common stock until January 16, 2019. The warrant has not been exercised as of March 31, 2016.

EPS — Basic EPS is computed by dividing net income available to common stockholders by the weighted average number of common shares outstanding during each period. Diluted EPS is computed by dividing net income available to common stockholders by the weighted average number of common shares outstanding during each period, plus common share equivalents calculated for stock options, warrants and RSUs outstanding using the treasury stock method. The Company has issued RSAs, which are unvested share-based payment awards that contain non-forfeitable rights to dividends or dividend equivalents. These RSAs are considered participating securities. Accordingly, the Company applied the two-class method in the computation of basic and diluted EPS in periods where RSAs are outstanding. Restricted stock unit awards do not contain nonforfeitable rights to dividends when granted. As of March 31, 2016, there were no RSAs outstanding.

The following table presents EPS calculations for the three months ended March 31, 2016 and 2015:




	Three Months Ended March 31,
($ in thousands, except per share data, shares in thousands)	2016		2015
Basic
Net income	$	107,516	$	100,027
Less: Earnings allocated to participating securities	—		3
Net income allocated to common stockholders	$	107,516	$	100,024

Basic weighted average number of shares outstanding	143,958		143,655
Basic EPS	$	0.75	$	0.70

Diluted
Net income allocated to diluted common stockholders	$	107,516	$	100,024

Basic weighted average number of shares outstanding	143,958		143,655
Diluted potential common shares ⁽¹⁾	845		694
Diluted weighted average number of shares outstanding	144,803		144,349
Diluted EPS	$	0.74	$	0.69


(1)	Includes dilutive shares from RSUs and warrants for the three months ended March 31, 2016 and 2015. Also includes dilutive shares from stock options for the three months ended March 31, 2015.

For the three months ended March 31, 2016, approximately 13 thousand weighted average anti-dilutive shares of RSUs were excluded from the diluted EPS computation. For the three months ended March 31, 2015, approximately 170 thousand weighted average anti-dilutive shares comprised of RSUs were excluded from the diluted EPS computation.