Annual report pursuant to Section 13 and 15(d)

Sale of Insurance Subsidiaries and Discontinued Operations

v3.6.0.2
Sale of Insurance Subsidiaries and Discontinued Operations
 12 Months Ended
Dec. 31, 2016
Discontinued Operations and Disposal Groups [Abstract]  
Sale of Insurance Subsidiaries and Discontinued Operations
Sale of Insurance Subsidiaries and Discontinued Operations
In June 2014, Hanmi Financial sold its insurance subsidiaries, Chun-Ha and All World, and entered into a stock purchase agreement for their sale. The subsidiaries were classified as held for sale in April 2014 and accounted for as discontinued operations. The operations and cash flows of the businesses have been eliminated and in accordance with the provisions of ASC 205, Presentation of Financial Statements, the results are reported as discontinued operations for all periods presented.
Hanmi Financial completed the sale of its two insurance subsidiaries to Chunha Holding Corporation on June 30, 2014 when total assets and net assets of Chun-Ha and All World were $5.6 million and $3.3 million as of June 30, 2014, respectively. The total sales price was $3.5 million, of which $2.0 million was paid upon signing. The remaining $1.5 million will be payable in three equal installments on each anniversary of the closing date through June 30, 2017.
The sale resulted in a $51,000 gain, offset by a $470,000 capital gain tax, a $14,000 operating losses and an $11,000 income tax expense. Consequently, the net loss from discontinued operations for the year ended December 31, 2014 was $444,000, or $0.01 per diluted share. For the year ended December 31, 2014, the discontinued operations generated noninterest income, primarily in the line item for insurance commissions, of $2.7 million and incurred noninterest expense of $2.7 million in various line items.
Summarized financial information for our discontinued operations related to Chun-Ha and All World are as follows:
 
June 30, 2014
 
(In thousands)
Cash and cash equivalents
$
1,602

Premises and equipment, net
90

Other intangible assets, net
1,089

Other assets
2,855

Total assets
$
5,636

 
 
Income tax payable
$
415

Accrued expenses and other liabilities
1,878

Total liabilities
$
2,293

Net assets of discontinued operations
$
3,343

 
Year Ended December 31,
 
2014
 
(In thousands)
Noninterest (loss) income
$
(14
)
Gain on disposal
51

Income before taxes
37

Provision for income taxes
481

Net (loss) income from discontinued operations
$
(444
)