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

Quarterly report pursuant to Section 13 or 15(d)

Loans (Tables)

Loans (Tables)

3 Months Ended

Mar. 31, 2023

Loans consisted of the following as of the dates indicated:


	March 31, 2023			December 31, 2022
	(in thousands)
Real estate loans:
Commercial property
Retail	$	1,052,353		$	1,023,608
Hospitality		669,012			646,893
Office		533,703			499,946
Other (1)		1,415,748			1,553,729
Total commercial property loans		3,670,816			3,724,176
Construction		113,360			109,205
Residential (2)		817,917			734,472
Total real estate loans		4,602,093			4,567,853
Commercial and industrial loans (3)		778,149			804,492
Equipment financing agreements		600,216			594,788
Loans receivable		5,980,458			5,967,133
Allowance for credit losses		(72,249	)		(71,523	)
Loans receivable, net	$	5,908,209		$	5,895,610

(1)

Includes mixed-use, multifamily, industrial, gas stations, faith-based facilities, medical and warehouse; all other property types represent less than one percent of total loans receivable.

(2)

Includes $2.4 million and $2.4 million of home equity loans and lines, and $6.7 million and $4.6 of personal loans at March 31, 2023 and December 31, 2022, respectively.

(3)

At March 31, 2023 and December 31, 2022, Paycheck Protection Program loans were $0.7 million and $0.9 million, respectively.

Activity for Loans Held for Sale

The following is the activity for loans held for sale for the three months ended March 31, 2023 and 2022:


	Real Estate			Commercial and Industrial			Total
	(in thousands)
March 31, 2023
Balance at beginning of period	$	3,775		$	4,268		$	8,043
Originations and transfers		16,387			8,929			25,316
Sales		(19,781	)		(9,918	)		(29,699	)
Principal paydowns and amortization		(2	)		(6	)		(8	)
Balance at end of period	$	379		$	3,273		$	3,652

March 31, 2022
Balance at beginning of period	$	6,954		$	6,388		$	13,342
Originations and transfers		20,164			11,689			31,853
Sales		(15,293	)		(14,284	)		(29,577	)
Principal paydowns and amortization		—			(1	)		(1	)
Balance at end of period	$	11,825		$	3,792		$	15,617

Allowance for Credit Losses by Portfolio Segment

The following table details the information on the allowance for credit losses by portfolio segment as of and for the three months ended March 31, 2023 and 2022:


	Real Estate			Commercial and Industrial			Equipment Financing Agreements			Total
	(in thousands)
March 31, 2023
Balance at beginning of period	$	44,026		$	15,267		$	12,230		$	71,523
Charge-offs		(412	)		(210	)		(1,616	)		(2,238	)
Recoveries		68			235			480			783
Provision (recovery) for credit losses		(151	)		41			2,291			2,181
Ending balance	$	43,531		$	15,333		$	13,385		$	72,249

March 31, 2022
Balance at beginning of period	$	48,890		$	12,418		$	11,249		$	72,557
Charge-offs		(530	)		(58	)		(247	)		(835	)
Recoveries		197			317			423			937
Provision (recovery) for credit losses		(2,202	)		267			788			(1,147	)
Ending balance	$	46,355		$	12,944		$	12,213		$	71,512

The table below illustrates the allowance for credit losses by loan portfolio segment and each loan portfolio segment as a percentage of total loans.


	March 31, 2023										December 31, 2022
	Allowance Amount		Percentage of Total Allowance			Total Loans		Percentage of Total Loans			Allowance Amount		Percentage of Total Allowance			Total Loans		Percentage of Total Loans
	(dollars in thousands)
Real estate loans:
Commercial property
Retail	$	9,405		13.0	%	$	1,052,353		17.6	%	$	7,872		11.0	%	$	1,023,608		17.2	%
Hospitality		14,138		19.6			669,012		11.2			13,407		18.7			646,893		10.8
Office		2,509		3.5			533,703		8.9			2,293		3.2			499,946		8.4
Other		9,186		12.7			1,415,748		23.7			13,056		18.3			1,553,729		26.0
Total commercial property loans		35,238		48.8			3,670,816		61.4			36,628		51.2			3,724,176		62.4
Construction		4,003		5.5			113,360		1.9			4,022		5.7			109,205		1.8
Residential		4,290		6.0			817,917		13.7			3,376		4.7			734,472		12.4
Total real estate loans		43,531		60.3			4,602,093		77.0			44,026		61.6			4,567,853		76.6
Commercial and industrial loans		15,333		21.2			778,149		13.0			15,267		21.3			804,492		13.4
Equipment financing agreements		13,385		18.5			600,216		10.0			12,230		17.1			594,788		10.0
Total	$	72,249		100.0	%	$	5,980,458		100.0	%	$	71,523		100.0	%	$	5,967,133		100.0	%

Summary of Amortized Cost Basis of Collateral Dependent Loans By Class of Loans

The following table represents the amortized cost basis of collateral-dependent loans by class of loans as of March 31, 2023 and December 31, 2022, for which repayment is expected to be obtained through the sale of the underlying collateral.


	March 31, 2023		December 31, 2022
	Amortized Cost		Amortized Cost
	(in thousands)
Real estate loans:
Commercial property
Retail	$	1,883	$	1,930
Hospitality		—		—
Office		—		—
Other (1)		259		256
Total commercial property loans		2,142		2,186
Residential		487		508
Total real estate loans		2,629		2,694
Commercial and industrial loans		10,002		—
Total	$	12,631	$	2,694

(1)

Includes mixed-use, multifamily, industrial, gas stations, faith-based facilities, medical and warehouse; all other property types represent less than one percent of total loans receivable.

Credit Quality of Loan Portfolio


	Term Loans
	Amortized Cost Basis by Origination Year (1)
	2023		2022			2021			2020			2019		Prior			Revolving Loans Amortized Cost Basis		Total
	(in thousands)
March 31, 2023
Real estate loans:
Commercial property
Risk Rating									`
Pass / Pass-Watch	$	194,981	$	1,064,796		$	882,494		$	587,432		$	393,738	$	443,388		$	40,472	$	3,607,301
Special Mention		—		1,579			20,228			5,820			1,596		3,793			1,700		34,716
Classified		1,272		9,401			4,846			261			4,289		8,730			—		28,799
Total commercial property		196,253		1,075,776			907,568			593,513			399,623		455,911			42,172		3,670,816
YTD gross charge-offs		—		—			—			412			—		—			—		412
YTD net charge-offs		—		—			—			412			—		(67	)		—		345

Construction
Risk Rating
Pass / Pass-Watch		61,150		5,549			46,661			—			—		—			—		113,360
Special Mention		—		—			—			—			—		—			—		—
Classified		—		—			—			—			—		—			—		—
Total construction		61,150		5,549			46,661			—			—		—			—		113,360
YTD gross charge-offs		—		—			—			—			—		—			—		—
YTD net charge-offs		—		—			—			—			—		—			—		—

Residential
Risk Rating
Pass / Pass-Watch		94,413		400,059			169,111			13,007			228		132,970			7,624		817,412
Special Mention		—		—			—			—			—		—			500		500
Classified		—		—			—			—			—		5			—		5
Total residential		94,413		400,059			169,111			13,007			228		132,975			8,124		817,917
YTD gross charge-offs		—		—			—			—			—		—			—		—
YTD net charge-offs		—		—			—			—			—		(1	)		—		(1	)

Total real estate loans
Risk Rating
Pass / Pass-Watch		350,544		1,470,404			1,098,266			600,439			393,966		576,358			48,096		4,538,073
Special Mention		—		1,579			20,228			5,820			1,596		3,793			2,200		35,216
Classified		1,272		9,401			4,846			261			4,289		8,735			—		28,804
Total real estate loans		351,816		1,481,384			1,123,340			606,520			399,851		588,886			50,296		4,602,093
YTD gross charge-offs		—		—			—			412			—		—			—		412
YTD net charge-offs		—		—			—			412			—		(68	)		—		344

Commercial and industrial loans:
Risk Rating
Pass / Pass-Watch		134,247		224,285			102,649			37,591			22,070		17,962			198,428		737,232
Special Mention		—		—			8,998			—			—		126			20,000		29,124
Classified		—		940			—			—			85		273			10,495		11,793
Total commercial and industrial loans		134,247		225,225			111,647			37,591			22,155		18,361			228,923		778,149
YTD gross charge-offs		—		—			—			—			20		190			—		210
YTD net charge-offs		—		(13	)		(2	)		—			20		(30	)		—		(25	)

Equipment financing agreements:
Risk Rating
Pass / Pass-Watch		65,243		285,484			146,563			40,374			42,570		13,292			—		593,526
Special Mention		—		—			—			—			—		—			—		—
Classified		—		1,484			3,130			451			1,143		482			—		6,690
Total equipment financing agreements		65,243		286,968			149,693			40,825			43,713		13,774			—		600,216
YTD gross charge-offs		—		176			935			—			358		147			—		1,616
YTD net charge-offs		—		176			840			(6	)		154		(28	)		—		1,136

Total loans receivable:
Risk Rating
Pass / Pass-Watch		550,034		1,980,173			1,347,478			678,404			458,606		607,612			246,524		5,868,831
Special Mention		—		1,579			29,226			5,820			1,596		3,919			22,200		64,340
Classified		1,272		11,825			7,976			712			5,517		9,490			10,495		47,287
Total loans receivable	$	551,306	$	1,993,577		$	1,384,680		$	684,936		$	465,719	$	621,021		$	279,219	$	5,980,458
YTD gross charge-offs		—		176			935			412			378		337			—		2,238
YTD net charge-offs		—		163			838			406			174		(126	)		—		1,455

(1)

Includes extensions, renewals, or modifications of credit contracts, which consist of a new credit decision.


	Term Loans
	Amortized Cost Basis by Origination Year (1)
	2022		2021		2020		2019		2018		Prior		Revolving Loans Amortized Cost Basis		Total

December 31, 2022
Real estate loans:
Commercial property
Risk Rating
Pass / Pass-Watch	$	1,184,361	$	901,029	$	600,740	$	404,786	$	301,950	$	207,861	$	50,877	$	3,651,604
Special Mention		847		13,384		5,857		7,115		—		6,080		1,701		34,984
Classified		—		—		412		4,312		12,304		20,560		—		37,588
Total commercial property		1,185,208		914,413		607,009		416,213		314,254		234,501		52,578		3,724,176

Construction
Risk Rating
Pass / Pass-Watch		41,662		67,543		—		—		—		—		—		109,205
Special Mention		—		—		—		—		—		—		—		—
Classified		—		—		—		—		—		—		—		—
Total construction		41,662		67,543		—		—		—		—		—		109,205

Residential
Risk Rating
Pass / Pass-Watch		405,975		173,236		13,102		232		731		134,766		5,422		733,464
Special Mention		—		—		—		—		—		—		500		500
Classified		12		—		—		—		—		496		—		508
Total residential		405,987		173,236		13,102		232		731		135,262		5,922		734,472

Total real estate loans
Risk Rating
Pass / Pass-Watch		1,631,998		1,141,808		613,842		405,018		302,681		342,627		56,299		4,494,273
Special Mention		847		13,384		5,857		7,115		—		6,080		2,201		35,484
Classified		12		—		412		4,312		12,304		21,056		—		38,096
Total real estate loans		1,632,857		1,155,192		620,111		416,445		314,985		369,763		58,500		4,567,853

Commercial and industrial loans:
Risk Rating
Pass / Pass-Watch		368,778		100,537		39,577		24,117		7,342		12,282		205,951		758,584
Special Mention		—		9,285		—		—		29		102		34,113		43,529
Classified		—		—		171		1,097		81		391		639		2,379
Total commercial and industrial loans		368,778		109,822		39,748		25,214		7,452		12,775		240,703		804,492

Equipment financing agreements:
Risk Rating
Pass / Pass-Watch		305,249		165,313		46,970		52,133		17,608		1,798		—		589,071
Special Mention		—		—		—		—		—		—		—		—
Classified		630		2,542		311		1,581		565		88		—		5,717
Total equipment financing agreements		305,879		167,855		47,281		53,714		18,173		1,886		—		594,788

Total loans receivable:
Risk Rating
Pass / Pass-Watch		2,306,025		1,407,658		700,389		481,268		327,631		356,707		262,250		5,841,928
Special Mention		847		22,669		5,857		7,115		29		6,182		36,314		79,013
Classified		642		2,542		894		6,990		12,950		21,535		639		46,192
Total loans receivable	$	2,307,514	$	1,432,869	$	707,140	$	495,373	$	340,610	$	384,424	$	299,203	$	5,967,133

(1)

Includes extensions, renewals, or modifications of credit contracts, which consist of a new credit decision.

Loans by Vintage Year and Payment Performance


	Term Loans
	Amortized Cost Basis by Origination Year (1)
	2023		2022			2021			2020			2019		Prior			Revolving Loans Amortized Cost Basis		Total
	(in thousands)
March 31, 2023
Real estate loans:
Commercial property
Payment performance
Performing	$	196,253	$	1,075,696		$	907,568		$	593,252		$	399,623	$	453,511		$	42,172	$	3,668,075
Nonperforming		—		80			—			261			—		2,400			—		2,741
Total commercial property		196,253		1,075,776			907,568			593,513			399,623		455,911			42,172		3,670,816
YTD gross charge-offs		—		—			—			412			—		—			—		412
YTD net charge-offs		—		—			—			412			—		(67	)		—		345

Construction
Payment performance
Performing		61,150		5,549			46,661			—			—		—			—		113,360
Nonperforming		—		—			—			—			—		—			—		—
Total construction		61,150		5,549			46,661			—			—		—			—		113,360
YTD gross charge-offs		—		—			—			—			—		—			—		—
YTD net charge-offs		—		—			—			—			—		—			—		—

Residential
Payment performance
Performing		94,413		400,059			169,111			13,007			228		132,483			8,124		817,425
Nonperforming		—		—			—			—			—		492			—		492
Total residential		94,413		400,059			169,111			13,007			228		132,975			8,124		817,917
YTD gross charge-offs		—		—			—			—			—		—			—		—
YTD net charge-offs		—		—			—			—			—		(1	)		—		(1	)

Total real estate loans
Payment performance
Performing		351,816		1,481,304			1,123,340			606,259			399,851		585,994			50,296		4,598,860
Nonperforming		—		80			—			261			—		2,892			—		3,233
Total real estate loans		351,816		1,481,384			1,123,340			606,520			399,851		588,886			50,296		4,602,093
YTD gross charge-offs		—		—			—			412			—		—			—		412
YTD net charge-offs		—		—			—			412			—		(68	)		—		344

Commercial and industrial loans:
Payment performance
Performing		134,247		225,225			111,647			37,591			22,149		18,242			218,921		768,022
Nonperforming		—		—			—			—			6		119			10,002		10,127
Total commercial and industrial loans		134,247		225,225			111,647			37,591			22,155		18,361			228,923		778,149
YTD gross charge-offs		—		—			—			—			20		190			—		210
YTD net charge-offs		—		(13	)		(2	)		—			20		(30	)		—		(25	)

Equipment financing agreements:
Payment performance
Performing		65,243		285,484			146,563			40,374			42,570		13,292			—		593,526
Nonperforming		—		1,484			3,130			451			1,143		482			—		6,690
Total equipment financing agreements		65,243		286,968			149,693			40,825			43,713		13,774			—		600,216
YTD gross charge-offs		—		176			935			—			358		147			—		1,616
YTD net charge-offs		—		176			840			(6	)		154		(28	)		—		1,136

Total loans receivable:
Payment performance
Performing		551,306		1,992,013			1,381,550			684,224			464,570		617,528			269,217		5,960,408
Nonperforming		—		1,564			3,130			712			1,149		3,493			10,002		20,050
Total loans receivable	$	551,306	$	1,993,577		$	1,384,680		$	684,936		$	465,719	$	621,021		$	279,219	$	5,980,458
YTD gross charge-offs		—		176			935			412			378		337			—		2,238
YTD net charge-offs		—		163			838			406			174		(126	)		—		1,455

(1)

Includes extensions, renewals, or modifications of credit contracts, which consist of a new credit decision.


	Term Loans
	Amortized Cost Basis by Origination Year (1)
	2022		2021		2020		2019		2018		Prior		Revolving Loans Amortized Cost Basis		Total

December 31, 2022
Real estate loans:
Commercial property
Payment performance
Performing	$	1,185,208	$	914,413	$	606,597	$	416,213	$	312,324	$	233,643	$	52,578	$	3,720,976
Nonperforming		—		—		412		—		1,930		858				3,200
Total commercial property		1,185,208		914,413		607,009		416,213		314,254		234,501		52,578		3,724,176

Construction
Payment performance
Performing		41,662		67,543		—		—		—		—		—		109,205
Nonperforming		—		—		—		—		—		—		—		—
Total construction		41,662		67,543		—		—		—		—		—		109,205

Residential
Payment performance
Performing		405,975		173,236		13,102		232		731		134,766		5,922		733,964
Nonperforming		12		—		—		—		—		496		—		508
Total residential		405,987		173,236		13,102		232		731		135,262		5,922		734,472

Total real estate loans
Payment performance
Performing		1,632,845		1,155,192		619,699		416,445		313,055		368,409		58,500		4,564,145
Nonperforming		12		—		412		—		1,930		1,354		—		3,708
Total real estate loans		1,632,857		1,155,192		620,111		416,445		314,985		369,763		58,500		4,567,853

Commercial and industrial loans:
Payment performance
Performing		368,778		109,822		39,577		25,199		7,452		12,539		240,703		804,070
Nonperforming		—		—		171		15		—		236		—		422
Total commercial and industrial loans		368,778		109,822		39,748		25,214		7,452		12,775		240,703		804,492

Equipment financing agreements:
Payment performance
Performing		305,249		165,313		46,970		52,133		17,608		1,798		—		589,071
Nonperforming		630		2,542		311		1,581		565		88		—		5,717
Total equipment financing agreements		305,879		167,855		47,281		53,714		18,173		1,886		—		594,788

Total loans receivable:
Payment performance
Performing		2,306,872		1,430,327		706,246		493,777		338,115		382,746		299,203		5,957,286
Nonperforming		642		2,542		894		1,596		2,495		1,678		—		9,847
Total loans receivable	$	2,307,514	$	1,432,869	$	707,140	$	495,373	$	340,610	$	384,424	$	299,203	$	5,967,133

(1)

Includes extensions, renewals, or modifications of credit contracts, which consist of a new credit decision.

Analysis of Past Due Loans, Including Loans on Nonaccrual Status, Disaggregated by Loan Class

The following is an aging analysis of loans, including loans on nonaccrual status, disaggregated by loan class, as of the dates indicated:


	30-59 Days Past Due		60-89 Days Past Due		90 Days or More Past Due		Total Past Due		Current		Total		Accruing 90 Days or More Past Due
	(in thousands)
March 31, 2023
Real estate loans:
Commercial property
Retail	$	—	$	—	$	—	$	—	$	1,052,353	$	1,052,353	$	—
Hospitality		158		—		—		158		668,854		669,012		—
Office		—		—		—		—		533,703		533,703		—
Other		—		—		—		—		1,415,748		1,415,748		—
Total commercial property loans		158		—		—		158		3,670,658		3,670,816		—
Construction		—		—		—		—		113,360		113,360		—
Residential		1,669		—		—		1,669		816,248		817,917		—
Total real estate loans		1,827		—		—		1,827		4,600,266		4,602,093		—
Commercial and industrial loans		7,038		1		—		7,039		771,110		778,149		—
Equipment financing agreements		6,379		1,553		3,553		11,485		588,731		600,216		—
Total loans receivable	$	15,244	$	1,554	$	3,553	$	20,351	$	5,960,107	$	5,980,458	$	—

December 31, 2022
Real estate loans:
Commercial property
Retail	$	—	$	—	$	—	$	—	$	1,023,608	$	1,023,608	$	—
Hospitality		—		—		—		—		646,893		646,893		—
Office		—		—		—		—		499,946		499,946		—
Other		—		494		—		494		1,553,235		1,553,729		—
Total commercial property loans		—		494		—		494		3,723,682		3,724,176		—
Construction		—		—		—		—		109,205		109,205		—
Residential		313		804		7		1,124		733,348		734,472		—
Total real estate loans		313		1,298		7		1,618		4,566,235		4,567,853		—
Commercial and industrial loans		77		79		—		156		804,336		804,492		—
Equipment financing agreements		5,825		1,271		2,949		10,045		584,743		594,788		—
Total loans receivable	$	6,215	$	2,648	$	2,956	$	11,819	$	5,955,314	$	5,967,133	$	—

Schedule of Amortized Cost Basis of Loans on Nonaccrual Status and Loans Past Due 90 Days and Still Accruing

The following table represents the amortized cost basis of loans on nonaccrual status and loans past due 90 days and still accruing as of March 31, 2023 and December 31, 2022.


	March 31, 2023
	Nonaccrual Loans With No Allowance for Credit Losses		Nonaccrual Loans With Allowance for Credit Losses		Loans Past Due 90 Days Still Accruing		Total Nonperforming Loans
	(in thousands)
Real estate loans:
Commercial property
Retail	$	2,144	$	—	$	—	$	2,144
Hospitality		—		65		—		65
Office		—		—		—		—
Other		259		273		—		532
Total commercial property loans		2,403		338		—		2,741
Residential		487		5		—		492
Total real estate loans		2,890		343		—		3,233
Commercial and industrial loans		—		10,127		—		10,127
Equipment financing agreements		358		6,332		—		6,690
Total	$	3,248	$	16,802	$	—	$	20,050

	December 31, 2022
	Nonaccrual Loans With No Allowance for Credit Losses		Nonaccrual Loans With Allowance for Credit Losses		Loans Past Due 90 Days Still Accruing		Total Nonperforming Loans
	(in thousands)
Real estate loans:
Commercial property
Retail	$	1,929	$	—	$	—	$	1,929
Office		—		—		—		—
Other		540		731		—		1,271
Total commercial property loans		2,469		731		—		3,200
Residential		508		—		—		508
Total real estate loans		2,977		731		—		3,708
Commercial and industrial loans		—		422		—		422
Equipment financing agreements		215		5,501		—		5,716
Total	$	3,192	$	6,654	$	—	$	9,846

Non-Performing Assets

The following table details nonperforming assets as of the dates indicated:


	March 31, 2023		December 31, 2022
	(in thousands)
Nonaccrual loans	$	20,050	$	9,846
Loans receivable 90 days or more past due and still accruing		—		—
Total nonperforming loans receivable		20,050		9,846
Other real estate owned ("OREO")		117		117
Total nonperforming assets	$	20,167	$	9,963