Annual report pursuant to Section 13 and 15(d)

Regulatory Matters

v3.6.0.2
Regulatory Matters
 12 Months Ended
Dec. 31, 2016
Banking and Thrift [Abstract]  
Regulatory Matters
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.

In July 2013, the Board of Governors of the Federal Reserve, the Office of the Comptroller of the Currency and the
FDIC approved the Basel III regulatory capital framework and related changes under the Dodd-Frank Wall Street Reform and
Consumer Protection Act. 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. Basel III rules, including certain transitional provisions, became effective January 1, 2015, and its requirements are included in the capital ratios presented in the table shown below.

In addition, a new capital conservation buffer of 2.5% began to be phased in effective January 1, 2016 through January
1, 2019, and must be met to avoid limitations on the ability of the Bank to pay dividends, repurchase shares or pay
discretionary bonuses. In January 2016, the new capital conservation buffer requirement was 0.625% of risk-weighted assets and will increase each year until fully implemented in January 2019. The Company and the Bank's capital conservation buffer was 5.86% and 5.64%, respectively, as of December 31, 2016.

The capital ratios of Hanmi Financial and the Bank as of December 31, 2016 and 2015 were as follows:
 
Actual
 
Minimum
Regulatory
Requirement
 
Minimum to Be
Categorized as
“Well Capitalized”
 
Amount
 
Ratio
 
Amount
 
Ratio
 
Amount
 
Ratio
 
(In thousands)
December 31, 2016
 
 
 
 
 
 
 
 
 
 
 
Total capital (to risk-weighted assets):
 
 
 
 
 
 
 
 
 
 
 
Hanmi Financial
$
554,089

 
13.86
%
 
$
319,901

 
8.00
%
 
 N/A

 
N/A

Hanmi Bank
$
544,759

 
13.64
%
 
$
319,520

 
8.00
%
 
$
399,399

 
10.00
%
Tier 1 capital (to risk-weighted assets):
 
 
 
 
 
 
 
 
 
 
 
Hanmi Financial
$
520,477

 
13.02
%
 
$
239,926

 
6.00
%
 
 N/A

 
N/A

Hanmi Bank
$
511,146

 
12.80
%
 
$
239,640

 
6.00
%
 
$
319,520

 
8.00
%
Common equity Tier 1 capital (to risk-weighted assets):
 
 
 
 
 
 
 
 
 
 
 
Hanmi Financial
$
509,239

 
12.73
%
 
$
179,944

 
4.50
%
 
 N/A

 
N/A

Hanmi Bank
$
511,146

 
12.80
%
 
$
179,730

 
4.50
%
 
$
259,610

 
6.50
%
Tier 1 capital (to average assets):
 
 
 
 
 
 
 
 
 
 
 
Hanmi Financial
$
520,477

 
11.53
%
 
$
180,581

 
4.00
%
 
 N/A

 
N/A

Hanmi Bank
$
511,146

 
11.33
%
 
$
180,411

 
4.00
%
 
$
225,514

 
5.00
%
 
 
 
 
 
 
 
 
 
 
 
 
December 31, 2015
 
 
 
 
 
 
 
 
 
 
 
Total capital (to risk-weighted assets):
 
 
 
 
 
 
 
 
 
 
 
Hanmi Financial
$
499,076

 
14.91
%
 
$
267,760

 
8.00
%
 
N/A

 
N/A

Hanmi Bank
$
496,710

 
14.86
%
 
$
267,377

 
8.00
%
 
$
334,222

 
10.00
%
Tier 1 capital (to risk-weighted assets):
 
 
 
 
 
 
 
 
 
 
 
Hanmi Financial
$
456,941

 
13.65
%
 
$
200,820

 
6.00
%
 
N/A

 
N/A

Hanmi Bank
$
454,634

 
13.60
%
 
$
200,533

 
6.00
%
 
$
267,377

 
8.00
%
Common equity Tier 1 capital (to risk-weighted assets):
 
 
 
 
 
 
 
 
 
 
 
Hanmi Financial
$
456,941

 
13.65
%
 
$
150,615

 
4.50
%
 
N/A

 
N/A

Hanmi Bank
$
454,634

 
13.60
%
 
$
150,400

 
4.50
%
 
$
217,244

 
6.50
%
Tier 1 capital (to average assets):
 
 
 
 
 
 
 
 
 
 
 
Hanmi Financial
$
456,941

 
11.31
%
 
$
161,620

 
4.00
%
 
N/A

 
N/A

Hanmi Bank
$
454,634

 
11.27
%
 
$
161,399

 
4.00
%
 
$
201,749

 
5.00
%