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

Quarterly report pursuant to Section 13 or 15(d)

Fair Value Measurements (Tables)

Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2013

Assets and Liabilities Measured at Fair Value on Recurring Basis

As of June 30, 2013 and December 31, 2012, assets and liabilities measured at fair value on a recurring basis are as follows:


	Level 1		Level 2		Level 3
	Quoted Prices in Active Markets for Identical Assets		Significant Observable Inputs with No Active Market with Identical Characteristics		Significant Unobservable Inputs		Balance
	(In thousands)
As of June 30, 2013
Assets:
Debt securities available-for-sale:
Mortgage-backed securities	$	—	$	124,618	$	—	$	124,618
Collateralized mortgage obligations		—		84,848		—		84,848
U.S. government agency securities		97,604		—		—		97,604
Municipal bonds-tax exempt		—		9,889		762		10,651
Municipal bonds-taxable		—		45,546		—		45,546
Corporate bonds		—		20,375		—		20,375
SBA loan pools securities		—		13,501		—		13,501
Other securities		—		2,933		—		2,933

Total debt securities available-for-sale		97,604		301,710		762		400,076

Equity securities available-for-sale:
Financial services industry		739		—		—		739

Total equity securities available-for-sale		739		—		—		739

Total securities available-for-sale	$	98,343	$	301,710	$	762	$	400,815

Liabilities:
Stock warrants	$	—	$	—	$	5	$	5

December 31, 2012:
Assets:
Debt securities available-for-sale:
Mortgage-backed securities	$	—	$	160,326	$	—	$	160,326
Collateralized mortgage obligations		—		100,487		—		100,487
U.S. government agency securities		93,118		—		—		93,118
Municipal bonds-tax exempt		—		12,033		779		12,812
Municipal bonds-taxable		—		46,142		—		46,142
Corporate bonds		—		20,400		—		20,400
SBA loan pools securities		—		14,026		—		14,026
Other securities		—		3,357		—		3,357

Total debt securities available-for-sale		93,118		356,771		779		450,668

Equity securities available-for-sale:
Financial services industry		392		—		—		392

Total equity securities available-for-sale		392		—		—		392

Total securities available-for-sale	$	93,510	$	356,771	$	779	$	451,060

Liabilities:
Stock warrants	$	—	$	—	$	906	$	906

Reconciliation and Income Statement Classification of Gains and Losses for All Assets and Liabilities

The table below presents a reconciliation and income statement classification of gains and losses for all assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the six months ended June 30, 2013:


	Beginning Balance as of January 1, 2013		Purchases Issuances, and Settlement			Realized Gains or Losses In Earnings			Unrealized Gains or Losses in Other Comprehensive Income			Ending Balance as of June 30, 2013
	(In thousands)
Assets:
Municipal bonds-tax exempt ⁽¹⁾	$	779	$	—		$	—		$	(17	)	$	762

Liabilities:
Stock warrants ⁽²⁾	$	906	$	(841	)	$	(60	)	$	—		$	5

(1)

Reflects a zero coupon tax credit municipal bond. As the Company was not able to obtain a price from independent external pricing service providers, the discounted cash flow method was used to determine its fair value. The bond carried a par value of $700,000 and an amortized value of $698,000 with a remaining life of 1.7 years at June 30, 2013.

(2)

Reflects warrants for our common stock issued in connection with services Cappello Capital Corp. provided to us as a placement agent in connection with our best efforts public offering and as our financial adviser in connection with our completed rights offering. The warrants were immediately exercisable when issued at an exercise price of $9.60 per share of our common stock and expire on October 14, 2015. See “Note 5 — Stockholders’ Equity” for more details.

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

As of June 30, 2013 and December 31, 2012, 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

Loss During The

for Identical

With Identical

Unobservable

Six Months Ended

Assets

Characteristics

Inputs

June 30, 2013

(In thousands)

As of June 30, 2013

Assets:

Non-performing loans held for sale ⁽¹⁾

—

2,553

—

Impaired loans ⁽²⁾

—

30,444

187

1,343

Other real estate owned ⁽³⁾

—

900

—

Level 1

Level 2

Level 3

Significant

Observable

Quoted Prices in

Inputs With No

Active Markets

Active Market

Significant

Loss During The

for Identical

With Identical

Unobservable

Twelve Months Ended

Assets

Characteristics

Inputs

December 31, 2012

(In thousands)

As of December 31, 2012:

Assets:

Non-performing loans held for sale ⁽⁴⁾

—

484

—

3,747

Impaired loans ⁽⁵⁾

—

27,844

8,888

580

Other real estate owned ⁽⁶⁾

—

774

—

301

(1)

Includes commercial and industrial loans of $1.8 million and real estate loans of $780,000

(2)

Includes real estate loans of $6.9 million, commercial and industrial loans of $22.4 million, and consumer loans of $1.3 million

(3)

Includes properties from the foreclosure of a residential property loan of $513,000 and a SBA loan of $387,000

(4)

Includes a SBA loan of $484,000

(5)

Includes real estate loans of $8.7 million, commercial and industrial loans of $27.0 million, and consumer loans of $1.0 million

(6)

Includes properties from the foreclosure of real estate loans of $774,000

Estimated Fair Values of Financial Instruments

The estimated fair values of financial instruments were as follows:


	June 30, 2013				December 31, 2012
	Carrying or Contract Amount		Estimated Fair Value		Carrying or Contract Amount		Estimated Fair Value
	(In thousands)
Financial assets:
Cash and cash equivalents	$	77,860	$	77,860	$	268,047	$	268,047
Restricted cash		—		—		5,350		5,350
Investment securities available-for-sale		400,815		400,815		451,060		451,060
Loans receivable, net of allowance for loan losses		2,128,208		2,104,321		1,986,051		1,981,669
Loans held for sale		2,553		2,553		8,306		8,306
Accrued interest receivable		7,441		7,441		7,581		7,581
Investment in federal home loan bank stock		14,197		14,197		17,800		17,800
Investment in federal reserve bank		13,200		13,200		12,222		12,222
Financial liabilities:
Noninterest-bearing deposits		736,470		736,470		720,931		720,931
Interest-bearing deposits		1,625,443		1,629,944		1,675,032		1,680,211
Borrowings		2,743		2,784		85,341		85,414
Accrued interest payable		2,570		2,570		11,775		11,775
Off-balance sheet items:
Commitments to extend credit		177,955		151		182,746		146
Standby letters of credit		9,694		25		10,588		24

- Definition

Tabular disclosure of the fair value measurement of assets using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes during the period attributable to the following: (1) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings (or changes in net assets) and gains or losses recognized in other comprehensive income (loss), and a description of where those gains or losses included in earnings (or changes in net assets) are reported in the statement of income (or activities); (2) purchases, sales, issues, and settlements (each type disclosed separately); and (3) transfers in and transfers out of Level 3 (for example, transfers due to changes in the observability of significant inputs), by class of asset.

+ References + Details

- Definition

Tabular disclosure of the fair value of financial instruments, including financial assets and financial liabilities, and the measurements of those instruments, assets, and liabilities.

+ References + Details