Quarterly report pursuant to Section 13 or 15(d)

Sale of Insurance Subsidiaries and Discontinued Operations

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Sale of Insurance Subsidiaries and Discontinued Operations
 6 Months Ended
Jun. 30, 2015
Discontinued Operations and Disposal Groups [Abstract]  
Sale of Insurance Subsidiaries and Discontinued Operations
Sale of Insurance Subsidiaries and Discontinued Operations

In June, 2014, Hanmi Financial sold its insurance subsidiaries, Chun-Ha and All World, and entered into a stock purchase agreement for their sale. The subsidiaries were classified as held for sale in April 2014 and accounted for as discontinued operations. The operations and cash flows of the businesses have been eliminated and in accordance with the provisions of ASC 205, Presentation of Financial Statements, the results are reported as discontinued operations for all periods presented.

Hanmi Financial completed the sale of its two insurance subsidiaries to Chunha Holding Corporation on June 30, 2014 when total assets and net assets of Chun-Ha and All World were $5.6 million and $3.3 million as of June 30, 2014, respectively. The total sales price was $3.5 million, of which $2.0 million was paid upon signing. The remaining $1.5 million will be payable in three equal installments on each anniversary of the closing date through June 30, 2017.

The sale resulted in a $51,000 gain, offset by a $470,000 capital gain tax, a $14,000 operating loss and an $11,000 income tax expense. Consequently, the net loss from discontinued operations for the second quarter of 2014 was $444,000, or $0.01 per diluted share. For the three and six months ended June 30, 2014, the discontinued operations generated noninterest income, primarily in the line item for insurance commissions, of $1.3 million and $2.7 million, respectively. They also incurred noninterest expense in various line items of $1.4 million and $2.7 million for the three and six months ended June 30, 2014.

Summarized financial information for our discontinued operations related to Chun-Ha and All World are as follows:
 
June 30, 2014
 
(in thousands)
Cash and cash equivalents
$
1,602

Premises and equipment, net
90

Other intangible assets, net
1,089

Other assets
2,855

Total assets
$
5,636

Income tax payable
$
415

Accrued expenses and other liabilities
1,878

Total liabilities
$
2,293

Net assets of discontinued operations
$
3,343

 
June 30, 2014
 
Three Months Ended
 
Six Months Ended
 
(in thousands)
Noninterest loss
$
(52
)
 
$
(14
)
Gain on disposal
51

 
51

(Loss) income before taxes
(1
)
 
37

Provision for income taxes
466

 
481

Net loss from discontinued operations
$
(467
)
 
$
(444
)