Quarterly report pursuant to Section 13 or 15(d)

Regulatory Matters

v3.23.3
Regulatory Matters
 9 Months Ended
Sep. 30, 2023
Regulatory Capital Requirements Under Banking Regulations [Abstract]  
Regulatory Matters

Note 10 — Regulatory Matters

Federal bank regulatory agencies require bank holding companies and banks to maintain a minimum ratio of qualifying total capital to risk-weighted assets of 8.0% and a minimum ratio of Tier 1 capital to risk-weighted assets of 6.0%. 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 4.0%.

In order for banks to be considered “well capitalized,” federal bank regulatory agencies require a minimum ratio of qualifying total capital to risk-weighted assets of 10.0% and a minimum ratio of Tier 1 capital to risk-weighted assets of 8.0%. 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 5.0%.

At September 30, 2023, the Bank’s capital ratios exceeded the minimum requirements for the Bank to be considered “well capitalized” and the Company exceeded all of its applicable minimum regulatory capital ratio requirements.

A capital conservation buffer of 2.5% must be met to avoid limitations on the ability of the Bank and the Company to pay dividends, repurchase shares or pay discretionary bonuses. The Bank's capital conservation buffer was 6.42% and 5.86% and the Company's capital conservation buffer was 6.30% and 5.71% as of September 30, 2023 and December 31, 2022, respectively.

In March 2020, federal banking agencies 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 September 30, 2023 and December 31, 2022 were as follows:

 

 

 

 

 

 

 

 

 

Minimum

 

 

Minimum to Be

 

 

 

 

 

 

 

 

 

Regulatory

 

 

Categorized as

 

 

 

Actual

 

 

Requirement

 

 

“Well Capitalized”

 

 

 

Amount

 

 

Ratio

 

 

Amount

 

 

Ratio

 

 

Amount

 

 

Ratio

 

 

 

(dollars in thousands)

 

September 30, 2023

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total capital (to risk-weighted assets):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Hanmi Financial

 

$

933,916

 

 

 

15.07

%

 

$

495,714

 

 

 

8.00

%

 

N/A

 

 

N/A

 

Hanmi Bank

 

$

893,375

 

 

 

14.42

%

 

$

495,685

 

 

 

8.00

%

 

$

619,607

 

 

 

10.00

%

Tier 1 capital (to risk-weighted assets):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Hanmi Financial

 

$

761,969

 

 

 

12.30

%

 

$

371,786

 

 

 

6.00

%

 

N/A

 

 

N/A

 

Hanmi Bank

 

$

831,428

 

 

 

13.42

%

 

$

371,764

 

 

 

6.00

%

 

$

495,685

 

 

 

8.00

%

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Hanmi Financial

 

$

740,411

 

 

 

11.95

%

 

$

278,839

 

 

 

4.50

%

 

N/A

 

 

N/A

 

Hanmi Bank

 

$

831,428

 

 

 

13.42

%

 

$

278,823

 

 

 

4.50

%

 

$

402,744

 

 

 

6.50

%

Tier 1 capital (to average assets):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Hanmi Financial

 

$

761,969

 

 

 

10.27

%

 

$

296,662

 

 

 

4.00

%

 

N/A

 

 

N/A

 

Hanmi Bank

 

$

831,428

 

 

 

11.25

%

 

$

295,515

 

 

 

4.00

%

 

$

369,394

 

 

 

5.00

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

%