Annual report pursuant to Section 13 and 15(d)

Regulatory Matters

v3.22.4
Regulatory Matters
 12 Months Ended
Dec. 31, 2022
Regulatory Capital Requirements Under Banking Regulations [Abstract]  
Regulatory Matters

Note 13 — Regulatory Matters

Risk-Based Capital

Federal bank regulatory agencies require bank holding companies and banks to maintain a minimum ratio of qualifying total capital to risk-weighted assets of 8.00% and a minimum ratio of Tier 1 capital to risk-weighted assets of 6.00%. In addition to the risk-based guidelines, federal bank regulatory agencies require bank holding companies and banks to maintain a minimum ratio of Tier 1 capital to average assets, referred to as the leverage ratio, of 4.00%.

In order for banks to be considered “well capitalized,” federal bank regulatory agencies require them to maintain a minimum ratio of qualifying total capital to risk-weighted assets of 10.00% and a minimum ratio of Tier 1 capital to risk-weighted assets of 8.00%. In addition to the risk-based guidelines, federal bank regulatory agencies require depository institutions to maintain a minimum ratio of Tier 1 capital to average assets, referred to as the leverage ratio, of 5.00%.

At December 31, 2022, the Bank’s capital ratios exceeded the minimum requirements to place the Bank in the “well capitalized” category and the Company exceeded all of its applicable minimum regulatory capital ratio requirements.

A capital conservation buffer of 2.50% must be met to avoid limitations on the ability of the Bank to pay dividends, repurchase shares or pay discretionary bonuses. The Bank’s capital conservation buffer was 5.86% and 6.72% and the Company's capital conservation buffer was 5.71% and 5.97% as of December 31, 2022 and 2021, respectively.

In March 2020, the OCC, the Board of Governors of the Federal Reserve System, and the FDIC announced an interim final rule to delay the impact on regulatory capital arising from the implementation of CECL. The interim final rule maintains the three-year transition option in the previous rule and provides banks the option to delay for two years an estimate of CECL’s effect on regulatory capital, relative to the incurred loss methodology’s effect on regulatory capital, followed by a three-year transition period (five-year transition option). The Company and the Bank adopted the capital transition relief over the permissible five-year period.

The capital ratios of Hanmi Financial and the Bank as of December 31, 2022 and 2021 were as follows:

 

 

 

Actual

 

 

Minimum Regulatory
Requirement

 

 

Minimum to be
Categorized as
“Well Capitalized”

 

 

 

Amount

 

 

Ratio

 

 

Amount

 

 

Ratio

 

 

Amount

 

 

Ratio

 

 

 

(dollars in thousands)

 

December 31, 2022

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total capital (to risk-weighted assets):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Hanmi Financial

 

$

901,239

 

 

 

14.49

%

 

$

497,508

 

 

 

8.00

%

 

N/A

 

 

N/A

 

Hanmi Bank

 

$

860,503

 

 

 

13.86

%

 

$

496,607

 

 

 

8.00

%

 

$

620,758

 

 

 

10.00

%

Tier 1 capital (to risk-weighted assets):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Hanmi Financial

 

$

728,344

 

 

 

11.71

%

 

$

373,131

 

 

 

6.00

%

 

N/A

 

 

N/A

 

Hanmi Bank

 

$

797,608

 

 

 

12.85

%

 

$

372,455

 

 

 

6.00

%

 

$

496,607

 

 

 

8.00

%

Common equity Tier 1 capital (to risk-weighted assets)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Hanmi Financial

 

$

707,101

 

 

 

11.37

%

 

$

279,848

 

 

 

4.50

%

 

N/A

 

 

N/A

 

Hanmi Bank

 

$

797,608

 

 

 

12.85

%

 

$

279,341

 

 

 

4.50

%

 

$

403,493

 

 

 

6.50

%

Tier 1 capital (to average assets):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Hanmi Financial

 

$

728,344

 

 

 

10.07

%

 

$

289,311

 

 

 

4.00

%

 

N/A

 

 

N/A

 

Hanmi Bank

 

$

797,608

 

 

 

11.07

%

 

$

288,110

 

 

 

4.00

%

 

$

360,137

 

 

 

5.00

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total capital (to risk-weighted assets):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Hanmi Financial

 

$

912,527

 

 

 

16.61

%

 

$

439,386

 

 

 

8.00

%

 

N/A

 

 

N/A

 

Hanmi Bank

 

$

809,280

 

 

 

14.72

%

 

$

439,858

 

 

 

8.00

%

 

$

549,822

 

 

 

10.00

%

Tier 1 capital (to risk-weighted assets):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Hanmi Financial

 

$

657,251

 

 

 

11.97

%

 

$

329,539

 

 

 

6.00

%

 

N/A

 

 

N/A

 

Hanmi Bank

 

$

748,178

 

 

 

13.61

%

 

$

329,893

 

 

 

6.00

%

 

$

439,858

 

 

 

8.00

%

Common equity Tier 1 capital (to risk-weighted assets)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Hanmi Financial

 

$

636,420

 

 

 

11.59

%

 

$

247,155

 

 

 

4.50

%

 

N/A

 

 

N/A

 

Hanmi Bank

 

$

748,178

 

 

 

13.61

%

 

$

247,420

 

 

 

4.50

%

 

$

357,385

 

 

 

6.50

%

Tier 1 capital (to average assets):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Hanmi Financial

 

$

657,251

 

 

 

9.63

%

 

$

273,133

 

 

 

4.00

%

 

N/A

 

 

N/A

 

Hanmi Bank

 

$

748,178

 

 

 

10.96

%

 

$

273,101

 

 

 

4.00

%

 

$

341,376

 

 

 

5.00

%