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

Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2017

As of March 31, 2017 and December 31, 2016, 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, 2017
Assets:
Securities available for sale:
Mortgage-backed securities	$	—	$	262,095	$	—	$	262,095
Collateralized mortgage obligations	—		86,928		—		86,928
U.S. government agency securities	—		7,446		—		7,446
SBA loan pools securities	—		4,163		—		4,163
Municipal bonds-tax exempt	—		158,774		—		158,774
Municipal bonds-taxable	—		1,037		—		1,037
Corporate bonds	—		5,022		—		5,022
U.S. treasury securities	155		—		—		155
Mutual funds	22,390		—		—		22,390
Total securities available for sale	$	22,545	$	525,465	$	—	$	548,010

December 31, 2016
Assets:
Securities available for sale:
Mortgage-backed securities	$	—	$	229,630	$	—	$	229,630
Collateralized mortgage obligations	—		76,451		—		76,451
U.S. government agency securities	—		7,441		—		7,441
SBA loan pools securities	—		4,146		—		4,146
Municipal bonds-tax exempt	—		158,030		—		158,030
Municipal bonds-taxable	—		13,701		—		13,701
Corporate bonds	—		5,015		—		5,015
U.S. treasury securities	156		—		—		156
Mutual funds	22,394		—		—		22,394
Total securities available for sale	$	22,550	$	494,414	$	—	$	516,964

As of March 31, 2017 and December 31, 2016, 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, 2017
	(in thousands)
March 31, 2017
Assets:
Impaired loans (excluding PCI loans) ⁽¹⁾	$	—	$	14,567	$	5,830	$	474
OREO ⁽²⁾	—		4,636		—		—

	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, 2016
	(in thousands)
December 31, 2016
Assets:
Impaired loans (excluding PCI loans) ⁽³⁾	$	—	$	15,257	$	6,767	$	868
OREO ⁽⁴⁾	—		7,484		—		—


⁽¹⁾	Consist of real estate loans of $17.0 million, commercial and industrial loans of $3.0 million and consumer loans of $321,000.


⁽²⁾	Consist of properties obtained from the foreclosure of commercial property loans of $2.9 million and residential property loans of $1.7 million.


⁽³⁾	Consist of real estate loans of $17.8 million, commercial and industrial loans of $3.8 million, and consumer loans of $419,000.


⁽⁴⁾	Consist of properties obtained from the foreclosure of commercial property loans of $5.4 million and residential property loans of $2.1 million.

The estimated fair values of financial instruments were as follows:



	March 31, 2017
	Carrying		Fair Value
	Amount		Level 1		Level 2		Level 3
	(in thousands)
Financial assets:
Cash and due from banks	$	138,592	$	138,592	$	—	$	—
Securities available for sale	548,010		22,545		525,465		—
Loans and leases receivable, net of allowance for loan and lease losses	3,910,799		—		—		3,877,761
Loans held for sale	8,849		—		8,849		—
Accrued interest receivable	10,774		10,774		—		—
FHLB stock	16,385		—		16,385		—
Financial liabilities:
Noninterest-bearing deposits	1,241,272		—		1,241,272		—
Interest-bearing deposits	2,841,893		—		—		2,789,454
Borrowings	166,795		—		—		166,795
Accrued interest payable	2,619		2,619		—		—
Off-balance sheet items:
Commitments to extend credit	330,906		—		—		330,906
Standby letters of credit	20,555		—		—		20,555



	December 31, 2016
	Carrying		Fair Value
	Amount		Level 1		Level 2		Level 3
	(in thousands)
Financial assets:
Cash and due from banks	$	147,235	$	147,235	$	—	$	—
Securities available for sale	516,964		22,550		494,414		—
Loans and leases receivable, net of allowance for loan and lease losses	3,812,340		—		—		3,789,579
Loans held for sale	9,316		—		9,316		—
Accrued interest receivable	10,987		10,987		—		—
FHLB stock	16,385		—		16,385		—
Financial liabilities:
Noninterest-bearing deposits	1,203,240		—		1,203,240		—
Interest-bearing deposits	2,606,497		—		—		2,541,929
Borrowings	333,978		—		—		333,978
Accrued interest payable	2,567		2,567		—		—
Off-balance sheet items:
Commitments to extend credit	310,987		—		—		310,987
Standby letters of credit	15,669		—		—		15,669