Hanmi Financial Corporation Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Fair Value Measurements (Tables)

Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2014

Assets and Liabilities Measured at Fair Value on Recurring Basis

As of March 31, 2014 and December 31, 2013, assets and liabilities measured at fair value on a recurring basis are as follows:


	Level 1		Level 2		Level 3
	Quoted Prices in Active Markets for Identical Assets		Significant Observable Inputs with No Active Market with Identical Characteristics		Significant Unobservable Inputs		Balance
	(In thousands)
March 31, 2014
Assets:
Securities available for sale:
Mortgage-backed securities	$	—	$	224,365	$	—	$	224,365
Collateralized mortgage obligations		—		148,031		—		148,031
U.S. government agency securities		85,978		—		—		85,978
Municipal bonds-tax exempt		—		3,695		737		4,432
Municipal bonds-taxable		—		21,675		—		21,675
Corporate bonds		—		20,906		—		20,906
SBA loan pools securities		—		12,702		—		12,702
Other securities		—		2,901		—		2,901

Total securities available for sale	$	85,978	$	434,275	$	737	$	520,990


December 31, 2013
Assets:
Securities available for sale:
Mortgage-backed securities	$	—	$	217,059	$	—	$	217,059
Collateralized mortgage obligations		—		127,693		—		127,693
U.S. government agency securities		83,536		—		—		83,536
Municipal bonds-tax exempt		—		13,189		748		13,937
Municipal bonds-taxable		—		32,354		—		32,354
Corporate bonds		—		20,835		—		20,835
SBA loan pools securities		—		12,629		—		12,629
U.S. treasury bills		19,997		—		—		19,997
Other securities		—		2,886		—		2,886

Total securities available for sale	$	103,533	$	426,645	$	748	$	530,926

Liabilities:
Stock warrants	$	—	$	—	$	2	$	2

Reconciliation and Income Statement Classification of Gains and Losses for All Assets and Liabilities

The table below presents a reconciliation and income statement classification of gains and losses for all assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the three months ended March 31, 2014:


	Beginning Balance as of January 1, 2014		Purchases, Issuances and Settlement			Realized Gains or Losses in Earnings		Unrealized Gains or Losses in Other Comprehensive Income			Ending Balance as of March 31, 2014
	(In thousands)
Assets:
Municipal bonds-tax exempt ⁽¹⁾	$	748	$	—		$	—	$	(11	)	$	737

Liabilities:
Stock warrants ⁽²⁾	$	2	$	(2	)	$	—	$	—		$	—

⁽¹⁾

Reflects a zero coupon tax credit municipal bond. As the Company was not able to obtain a price from independent external pricing service providers, the discounted cash flow method was used to determine its fair value. The bond carried a par value of $700,000 and an amortized value of $699,000 with a remaining life of 0.99 year at March 31, 2014.

⁽²⁾

Reflects warrants for our common stock issued in connection with services Cappello Capital Corp. provided to us as a placement agent in connection with our best efforts public offering and as our financial adviser in connection with our completed rights offering. The warrants were immediately exercisable when issued at an exercise price of $9.60 per share of our common stock and expire on October 14, 2015. See “Note 5 – Stockholders’ Equity” for more details.

Assets and Liabilities Measured at Fair Value on Non-Recurring Basis

As of March 31, 2014 and December 31, 2013, assets and liabilities measured at fair value on a non-recurring basis are as follows:


	Level 1		Level 2		Level 3
	Quoted Prices in Active Markets for Identical Assets		Significant Observable Inputs With No Active Market With Identical Characteristics		Significant Unobservable Inputs		Loss During the Three Months Ended March 31, 2014
	(In thousands)
March 31, 2014
Assets:
Impaired loans ⁽¹⁾	$	—	$	37,507	$	—	$	482

	Level 1		Level 2		Level 3
	Quoted Prices in Active Markets for Identical Assets		Significant Observable Inputs With No Active Market With Identical Characteristics		Significant Unobservable Inputs		Loss During the Twelve Months Ended December 31, 2013
	(In thousands)
December 31, 2013
Assets:
Impaired loans ⁽²⁾	$	—	$	36,254	$	1,738	$	2,431
Other real estate owned ⁽³⁾		—		756		—		10

⁽¹⁾

Include real estate loans of $33.3 million, commercial and industrial loans of $2.8 million, and consumer loans of $1.4 million.

⁽²⁾

Include real estate loans of $32.2 million, commercial and industrial loans of $2.8 million, and consumer loans of $1.3 million.

⁽³⁾

Includes properties from the foreclosure of real estate loans of $756,000.

Estimated Fair Values of Financial Instruments

The estimated fair values of financial instruments were as follows:


	March 31, 2014				December 31, 2013
	Carrying or Contract Amount		Estimated Fair Value		Carrying or Contract Amount		Estimated Fair Value
	(In thousands)
Financial assets:
Cash and cash equivalents	$	204,384	$	204,384	$	179,357	$	179,357
Securities available for sale		520,990		520,990		530,926		530,926
Loans receivable, net of allowance for loan losses		2,221,520		2,215,545		2,177,498		2,204,069
Loans held for sale		390		390		—		—
Accrued interest receivable		7,107		7,107		7,055		7,055
Investment in federal home loan bank stock		14,060		14,060		14,060		14,060
Investment in federal reserve bank stock		11,196		11,196		11,196		11,196
Financial liabilities:
Noninterest-bearing deposits		827,153		827,153		819,015		819,015
Interest-bearing deposits		1,679,427		1,682,392		1,693,310		1,693,739
Borrowings		132,445		132,451		127,546		127,249
Accrued interest payable		3,319		3,319		3,366		3,366
Off-balance sheet items:
Commitments to extend credit		268,093		193		246,161		190
Standby letters of credit		8,566		23		8,926		25

- Definition

Tabular disclosure of the fair value measurement of assets using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes during the period attributable to the following: (1) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings (or changes in net assets) and gains or losses recognized in other comprehensive income (loss), and a description of where those gains or losses included in earnings (or changes in net assets) are reported in the statement of income (or activities); (2) purchases, sales, issues, and settlements (each type disclosed separately); and (3) transfers in and transfers out of Level 3 (for example, transfers due to changes in the observability of significant inputs), by class of asset.

+ References + Details

- Definition

Tabular disclosure of the fair value of financial instruments, including financial assets and financial liabilities, and the measurements of those instruments, assets, and liabilities.

+ References + Details