Annual report pursuant to Section 13 and 15(d)

Regulatory Matters

v2.4.0.8
Regulatory Matters
 12 Months Ended
Dec. 31, 2013
Banking And Thrift [Abstract]  
Regulatory Matters

Note 11 — 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 8.0 percent and a minimum ratio of Tier 1 capital to risk-weighted assets of 4.0 percent. 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 percent.

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 10.0 percent and a minimum ratio of Tier 1 capital to risk-weighted assets of 6.0 percent. 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 percent.

 

The capital ratios of Hanmi Financial and the Bank as of December 31, 2013 and 2012 were as follows:

 

     Actual     Minimum
Regulatory
Requirement		     Minimum to Be
Categorized as
“Well Capitalized”		  
     Amount      Ratio     Amount      Ratio     Amount      Ratio  
     (In thousands)  

December 31, 2013

                

Total capital (to risk-weighted assets):

                

Hanmi Financial

    $ 427,910         17.53 %    $ 195,304         8.00 %      N/A         N/A   

Hanmi Bank

    $ 410,505         16.84 %    $ 194,974         8.00 %    $ 243,717         10.00 % 

Tier 1 capital (to risk-weighted assets):

                

Hanmi Financial

    $ 397,044         16.26 %    $ 97,652         4.00 %      N/A         N/A   

Hanmi Bank

    $ 379,691         15.58 %    $ 97,487         4.00 %    $ 146,230         6.00 % 

Tier 1 capital (to average assets):

                

Hanmi Financial

    $ 397,044         13.66 %    $ 116,303         4.00 %      N/A         N/A   

Hanmi Bank

    $ 379,691         13.09 %    $ 116,043         4.00 %    $ 145,054         5.00 % 

December 31, 2012

                

Total capital (to risk-weighted assets):

                

Hanmi Financial

    $ 451,784         20.65 %    $ 175,050         8.00 %      N/A         N/A   

Hanmi Bank

    $ 433,570         19.85 %    $ 174,734         8.00 %    $ 218,418         10.00 % 

Tier 1 capital (to risk-weighted assets):

                

Hanmi Financial

    $ 423,937         19.37 %    $ 87,525         4.00 %      N/A         N/A   

Hanmi Bank

    $ 405,801         18.58 %    $ 87,367         4.00 %    $ 131,051         6.00 % 

Tier 1 capital (to average assets):

                

Hanmi Financial

    $ 423,937         14.95 %    $ 113,464         4.00 %      N/A         N/A   

Hanmi Bank

    $ 405,801         14.33 %    $ 113,278         4.00 %    $ 141,597         5.00 % 

Regulatory Capital Rule Adjustments

In July 2013, the Board of Governors of the Federal Reserve System, the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corporation approved the Basel III regulatory capital framework and related Dodd-Frank Wall Street Reform and Consumer Protection Act changes. The rules revise minimum capital requirements and adjust prompt corrective action thresholds. The rules also revise the regulatory capital elements, add a new common equity Tier I capital ratio, and increase the minimum Tier I capital ratio requirement. The revisions permit banking organizations to retain, through a one-time election, the existing treatment for accumulated other comprehensive income. Additionally, the rules implement a new capital conservation buffer. Under the final rules, institutions are subject to limitations on paying dividends, engaging in share repurchases, and paying discretionary bonuses if its capital level falls below the capital conservation buffer amount. The rules will become effective January 1, 2015 for smaller, non-complex banking organizations with full implementation of the capital conservation buffer and certain deductions and adjustments to regulatory capital through January 1, 2019. The Company will continue to evaluate the new changes, and expects that the Company and the Bank will meet the capital requirements.