Hanmi Financial Corporation Quarterly report [Sections 13 or 15(d)]

Quarterly report [Sections 13 or 15(d)]

Fair Value Measurements (Tables)

Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2025

Assets and Liabilities Measured at Fair Value on Recurring Basis

As of March 31, 2025 and December 31, 2024, assets and liabilities measured at fair value on a recurring basis are as follows:


	Level 1		Level 2		Level 3
			Significant
			Observable
	Quoted Prices in		Inputs with No
	Active Markets		Active Market		Significant
	for Identical		with Identical		Unobservable
	Assets		Characteristics		Inputs		Total Fair Value
	(in thousands)
March 31, 2025
Assets:
Securities available for sale:
U.S. Treasury securities	$	89,631	$	—	$	—	$	89,631
U.S. government agency and sponsored agency obligations:
Mortgage-backed securities - residential		—		387,838		—		387,838
Mortgage-backed securities - commercial		—		62,552		—		62,552
Collateralized mortgage obligations		—		188,529		—		188,529
Debt securities		—		113,904		—		113,904
Total U.S. government agency and sponsored agency obligations		—		752,823		—		752,823
Municipal bonds-tax exempt		—		64,557		—		64,557
Total securities available for sale	$	89,631	$	817,380	$	—	$	907,011
Derivative financial instruments	$	—	$	3,725	$	—	$	3,725

Liabilities:
Derivative financial instruments	$	—	$	3,878	$	—	$	3,878

December 31, 2024
Assets:
Securities available for sale:
U.S. Treasury securities	$	88,929	$	—	$	—	$	88,929
U.S. government agency and sponsored agency obligations:
Mortgage-backed securities - residential		—		392,572		—		392,572
Mortgage-backed securities - commercial		—		62,916		—		62,916
Collateralized mortgage obligations		—		173,556		—		173,556
Debt securities		—		122,816		—		122,816
Total U.S. government agency and sponsored agency obligations		—		751,860		—		751,860
Municipal bonds-tax exempt		—		65,009		—		65,009
Total securities available for sale	$	88,929	$	816,869	$	—	$	905,798
Derivative financial instruments	$	—	$	4,690	$	—	$	4,690

Liabilities:
Derivative financial instruments	$	—	$	5,292	$	—	$	5,292

Assets and Liabilities Measured at Fair Value on Non-Recurring Basis

As of March 31, 2025 and December 31, 2024, assets and liabilities measured at fair value on a non-recurring basis are as follows:


			Level 1		Level 2		Level 3
					Significant
					Observable
			Quoted Prices in		Inputs With No
			Active Markets		Active Market		Significant
			for Identical		With Identical		Unobservable
	Total		Assets		Characteristics		Inputs
	(in thousands)
March 31, 2025
Assets:
Collateral dependent loans (1)	$	19,240	$	—	$	—	$	19,240
Other real estate owned		117		—		—		117
Repossessed personal property		738		—		—		738

December 31, 2024
Assets:
Collateral dependent loans (2)	$	3,467	$	—	$	—	$	3,467
Other real estate owned		117		—		—		117
Repossessed personal property		568		—		—		568

(1)

Consisted of real estate loans of $19.2 million.

(2)

Consisted of real estate loans of $3.5 million.

Quantitative Information about Level 3 Fair Value Assumptions for Assets Measured at Fair Value on Non-Recurring Basis

The following table represents quantitative information about Level 3 fair value assumptions for assets measured at fair value on a non-recurring basis at March 31, 2025 and December 31, 2024:


	Fair Value		Valuation Techniques	Unobservable Input(s)	Range (Weighted Average)
	(in thousands)
March 31, 2025
Collateral dependent loans:
Real estate loans:
Commercial property
Retail	$	576	Market approach	Adjustments to market data	(45%) to 30% / (13)%	(1)
Hospitality		2,029	Market approach	Adjustments to market data	(20)% to 20% / (3)%	(1)
Office		13,816	Market approach	Adjustments to market data	(26)% to (4)% / (14)%	(1)
Residential		2,819	Market approach	Adjustments to market data	(11) to 17% / (1)%	(1)
Total real estate loans		19,240
Total	$	19,240

Other real estate owned	$	117	Market approach	Adjustments to market data	0% to 10% / 3%	(1)

Repossessed personal property		738	Market approach	Adjustments to market data	N/A	(2)

December 31, 2024
Collateral dependent loans:
Real estate loans:
Commercial property
Retail	$	1,377	Market approach	Adjustments to market data	(45)% to 30% / (10)%	(1)
Hospitality		215	Market approach	Adjustments to market data	(11)% to 17% / 5%	(1)
Residential		1,875	Market approach	Adjustments to market data	(11)% to 8% / (2)%	(1)
Total real estate loans		3,467
Total	$	3,467

Other real estate owned	$	117	Market approach	Adjustments to market data	0% to 5% / 4%	(1)

Repossessed personal property		568	Market approach	Adjustments to market data	N/A	(2)

(1)

Appraisal reports utilize a combination of valuation techniques including a market approach, where prices and other relevant information generated by market transactions involving similar or comparable properties are used to determine the appraised value. Appraisals may include an ‘as is’ and ‘upon completion’ valuation scenarios. Adjustments are routinely made in the appraisal process by third-party appraisers to adjust for differences between the comparable sales and income data. Adjustments also result from the consideration of relevant economic and demographic factors with the potential to affect property values. Also, prospective values are based on the market conditions which exist at the date of inspection combined with informed forecasts based on current trends in supply and demand for the property types under appraisal. Positive adjustments disclosed in this table represent increases to the sales comparison and negative adjustments represent decreases.

(2)

The equipment is usually too small in value to use a professional appraisal service. The values are determined internally using a combination of auction values, vendor recommendations and sales comparisons depending on the equipment type. Some highly commoditized equipment, such as commercial trucks have services that provide industry values.

Estimated Fair Values of Financial Instruments

The estimated fair values of financial instruments were as follows:


	March 31, 2025
	Carrying		Fair Value
	Amount		Level 1		Level 2		Level 3
	(in thousands)
Financial assets:
Cash and due from banks	$	329,003	$	329,003	$	—	$	—
Securities available for sale		907,011		89,631		817,380		—
Loans held for sale		11,831		—		12,749		—
Loans receivable, net of allowance for credit losses		6,211,592		—		—		6,170,232
Accrued interest receivable		23,536		23,536		—		—
Derivative financial instruments		3,725		—		3,725		—

Financial liabilities:
Noninterest-bearing deposits		2,066,659		—		2,066,659		—
Interest-bearing deposits		4,552,816		—		—		4,550,896
Borrowings and subordinated debentures		248,299		—		117,533		132,410
Accrued interest payable		29,646		29,646		—		—
Derivative financial instruments		3,878		—		3,878		—


	December 31, 2024
	Carrying		Fair Value
	Amount		Level 1		Level 2		Level 3
	(in thousands)
Financial assets:
Cash and due from banks	$	304,800	$	304,800	$	—	$	—
Securities available for sale		905,798		88,929		816,869		—
Loans held for sale		8,579		—		9,229		—
Loans receivable, net of allowance for credit losses		6,181,230		—		—		6,078,567
Accrued interest receivable		22,937		22,937		—		—

Financial liabilities:
Noninterest-bearing deposits		2,096,634		—		2,096,634		—
Interest-bearing deposits		4,339,142		—		—		4,336,429
Borrowings and subordinated debentures		393,138		—		262,183		129,226
Accrued interest payable		34,824		34,824		—		—