Stockholders’ Equity and Earnings Per Share

Warrants — The Company acquired MetroCorp Bancshares, Inc., (“MetroCorp”) on January 17, 2014. Prior to the acquisition, MetroCorp had outstanding warrants to purchase 771,429 shares of its common stock. Upon the acquisition, the rights of the warrant holders were converted into the rights to acquire 230,282 shares of East West’s common stock until January 16, 2019. The warrants had not been exercised as of September 30, 2018.

Earnings Per Share — 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 any incremental dilutive common share equivalents calculated for warrants and RSUs outstanding using the treasury stock method.

The following table presents the EPS calculations for the three and nine months ended September 30, 2018 and 2017:




($ and shares in thousands, except per share data)	Three Months Ended September 30,				Nine Months Ended September 30,
($ and shares in thousands, except per share data)	2018		2017		2018		2017
Basic
Net income	$	171,302	$	132,660	$	530,683	$	420,726

Basic weighted-average number of shares outstanding	144,921		144,498		144,829		144,412
Basic EPS	$	1.18	$	0.92	$	3.66	$	2.91

Diluted
Net income	$	171,302	$	132,660	$	530,683	$	420,726

Basic weighted-average number of shares outstanding	144,921		144,498		144,829		144,412
Diluted potential common shares ⁽¹⁾	1,252		1,384		1,329		1,437
Diluted weighted-average number of shares outstanding ⁽¹⁾	146,173		145,882		146,158		145,849
Diluted EPS	$	1.17	$	0.91	$	3.63	$	2.88


(1)	Includes dilutive shares from RSUs and warrants for the three and nine months ended September 30, 2018 and 2017.

For the three and nine months ended September 30, 2018, 7,344 and 6,371 weighted-average anti-dilutive RSUs, respectively, were excluded from the diluted EPS computation. For the three and nine months ended September 30, 2017, 4,103 and 6,149 weighted-average anti-dilutive RSUs, respectively, were excluded from the diluted EPS computation.