Hanmi Financial Corporation Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

Loans Receivable (Tables)

Loans Receivable (Tables)

12 Months Ended

Dec. 31, 2023

Loans receivable consisted of the following as of the dates indicated:


	December 31,
	2023			2022
	(in thousands)
Real estate loans:
Commercial property
Retail	$	1,107,360		$	1,023,608
Hospitality		740,519			646,893
Office		574,981			499,946
Other (1)		1,366,534			1,553,729
Total commercial property loans		3,789,394			3,724,176
Construction		100,345			109,205
Residential (2)		962,661			734,472
Total real estate loans		4,852,400			4,567,853
Commercial and industrial loans (3)		747,819			804,492
Equipment financing agreements		582,215			594,788
Loans receivable		6,182,434			5,967,133
Allowance for credit losses		(69,462	)		(71,523	)
Loans receivable, net	$	6,112,972		$	5,895,610

(1)

Includes, among other property types, mixed-use, gas station, apartment, industrial, faith-based facilities and warehouse; the remaining real estate categories represent less than 1% of the Bank's total loans receivable.

(2)

Includes $1.9 million and $2.4 million of home equity loans and lines, and $4.5 million and $4.6 million of personal loans at December 31, 2023 and 2022, respectively.

(3)

At December 31, 2023 and 2022, PPP loans were $0.2 million and $0.9 million, respectively.

Information on SBA Loans Held for Sale

The following table details the information on SBA loans held for sale by portfolio segment for the years ended December 31, 2023 and 2022:


	Real Estate			Commercial and Industrial			Total
	(in thousands)
December 31, 2023
Balance at beginning of period	$	3,775		$	4,268		$	8,043
Originations and transfers		65,705			39,293			104,998
Sales		(60,611	)		(39,903	)		(100,514	)
Principal paydowns and amortization		(77	)		(437	)		(514	)
Balance at end of period	$	8,792		$	3,221		$	12,013

December 31, 2022
Balance at beginning of period	$	6,954		$	6,388		$	13,342
Originations and transfers		99,547			51,278			150,825
Sales		(102,720	)		(53,389	)		(156,109	)
Principal paydowns and amortization		(6	)		(9	)		(15	)
Balance at end of period	$	3,775		$	4,268		$	8,043

Loans Purchased by Portfolio Segment

The following table presents loans purchased by portfolio segment for the years ended December 31, 2023 and 2022:


	Commercial Real Estate		Commercial and Industrial		Residential Real Estate		Total
	(in thousands)
2023	$	—	$	9,657	$	—	$	9,657
2022	$	11,030	$	180	$	18,715	$	29,925

Allowance for Credit Losses by Portfolio Segment

The following table details the information on the allowance for credit losses by portfolio segment for the years ended December 31, 2023, 2022 and 2021:


	Real Estate			Commercial and Industrial			Equipment Financing Agreements			Total
	(in thousands)
December 31, 2023
Allowance for credit losses:
Beginning balance	$	44,026		$	15,267		$	12,230		$	71,523
Charge-offs		(627	)		(6,657	)		(8,806	)		(16,090	)
Recoveries		312			7,089			1,646			9,047
Provision (recovery) for credit losses		1,788			(5,442	)		8,636			4,982
Ending balance	$	45,499		$	10,257		$	13,706		$	69,462
December 31, 2022
Allowance for credit losses:
Beginning balance	$	48,890		$	12,418		$	11,249		$	72,557
Charge-offs		(1,886	)		(524	)		(2,312	)		(4,722	)
Recoveries		848			1,178			1,322			3,348
Provision (recovery) for credit losses		(3,826	)		2,195			1,971			340
Ending balance	$	44,026		$	15,267		$	12,230		$	71,523
December 31, 2021
Allowance for credit losses:
Beginning balance	$	51,876		$	21,410		$	17,140		$	90,426
Charge-offs		(1,427	)		(546	)		(4,400	)		(6,373	)
Recoveries		10,807			897			946			12,650
Provision (recovery) for credit losses		(12,366	)		(9,343	)		(2,437	)		(24,146	)
Ending balance	$	48,890		$	12,418		$	11,249		$	72,557

The table below presents the allowance for credit losses by portfolio segment as a percentage of the total allowance for credit losses and loans by portfolio segment as a percentage of the aggregate investment of loans receivable for the years ended December 31, 2023 and 2022:


	December 31, 2023										December 31, 2022
	Allowance Amount		Percentage of Total Allowance			Total Loans		Percentage of Total Loans			Allowance Amount		Percentage of Total Allowance			Total Loans		Percentage of Total Loans
	(dollars in thousands)
Real estate loans:
Commercial property
Retail	$	10,264		14.8	%	$	1,107,360		17.9	%	$	7,872		11.0	%	$	1,023,608		17.2	%
Hospitality		15,534		22.4			740,519		12.0			13,407		18.7			646,893		10.8
Office		3,024		4.4			574,981		9.3			2,293		3.2			499,946		8.4
Other		8,663		12.4			1,366,534		22.1			13,056		18.3			1,553,729		26.0
Total commercial property loans		37,485		54.0			3,789,394		61.3			36,628		51.2			3,724,176		62.4
Construction		2,756		4.0			100,345		1.6			4,022		5.7			109,205		1.8
Residential		5,258		7.5			962,661		15.6			3,376		4.7			734,472		12.4
Total real estate loans		45,499		65.5			4,852,400		78.5			44,026		61.6			4,567,853		76.6
Commercial and industrial loans		10,257		14.8			747,819		12.1			15,267		21.3			804,492		13.4
Equipment financing agreements		13,706		19.7			582,215		9.4			12,230		17.1			594,788		10.0
Total	$	69,462		100.0	%	$	6,182,434		100.0	%	$	71,523		100.0	%	$	5,967,133		100.0	%

Summary of Amortized Cost Basis of Collateral Dependent Loans By Class of Loans

The following table represents the amortized cost basis of collateral dependent loans by class of loans as of December 31, 2023 and 2022, for which repayment is expected to be obtained through the sale of the underlying collateral and any collateral dependent loans that are still accruing but are considered nonperforming.


	December 31,
	2023		2022
	(in thousands)
Real estate loans:
Commercial property
Retail	$	1,530	$	1,930
Hospitality		338		—
Other (1)		305		256
Total commercial property loans		2,173		2,186
Residential		1		508
Total real estate loans		2,174		2,694
Commercial and industrial loans		5,178		—
Total	$	7,352	$	2,694

(1)

Credit Quality of Loan Portfolio

Loans by Vintage Year and Risk Rating


	Term Loans
	Amortized Cost Basis by Origination Year (1)
	2023		2022		2021			2020		2019		Prior			Revolving Loans Amortized Cost Basis			Total
	(in thousands)
December 31, 2023
Real estate loans:
Commercial property
Risk Rating
Pass / Pass Watch	$	683,819	$	986,822	$	858,821		$	572,950	$	378,067	$	238,400		$	30,236		$	3,749,115
Special Mention		4,400		3,997		3,271			5,670		711		2,310			1,406			21,765
Classified		3,065		1,080		4,899			—		5,578		3,892			—			18,514
Total commercial property		691,284		991,899		866,991			578,620		384,356		244,602			31,642			3,789,394
YTD gross charge-offs		—		—		—			411		—		216			—			627
YTD net charge-offs (recoveries)		—		—		—			403		—		(81	)		—			322

Construction
Risk Rating
Pass / Pass Watch		72,039		—		—			—		—		—			—			72,039
Special Mention		—		—		28,306			—		—		—			—			28,306
Classified		—		—		—			—		—		—			—			—
Total construction		72,039		—		28,306			—		—		—			—			100,345
YTD gross charge-offs		—		—		—			—		—		—			—			—
YTD net charge-offs (recoveries)		—		—		—			—		—		—			—			—

Residential
Risk Rating
Pass / Pass Watch		290,196		375,712		158,618			12,656		217		119,736			5,025			962,160
Special Mention		—		—		—			—		—		—			500			500
Classified		—		—		—			—		—		1			—			1
Total residential		290,196		375,712		158,618			12,656		217		119,737			5,525			962,661
YTD gross charge-offs		—		—		—			—		—		—			—			—
YTD net charge-offs (recoveries)		—		—		—			—		—		(7	)		—			(7	)

Total real estate loans
Risk Rating
Pass / Pass Watch		1,046,054		1,362,534		1,017,439			585,606		378,284		358,136			35,261			4,783,314
Special Mention		4,400		3,997		31,577			5,670		711		2,310			1,906			50,571
Classified		3,065		1,080		4,899			—		5,578		3,893			—			18,515
Total real estate loans		1,053,519		1,367,611		1,053,915			591,276		384,573		364,339			37,167			4,852,400
YTD gross charge-offs		—		—		—			411		—		216			—			627
YTD net charge-offs (recoveries)		—		—		—			403		—		(88	)		—			315

Commercial and industrial loans:
Risk Rating
Pass / Pass Watch		177,864		169,209		84,198			31,348		9,971		12,920			242,044			727,554
Special Mention		—		14,578		—			102		—		65			(1	)		14,744
Classified		329		—		—			—		79		174			4,939			5,521
Total commercial and industrial loans		178,193		183,787		84,198			31,450		10,050		13,159			246,982			747,819
YTD gross charge-offs		—		17		—			—		110		410			6,120			6,657
YTD net charge-offs (recoveries)		—		5		(7	)		—		101		(6,621	)		6,090			(432	)

Equipment financing agreements:
Risk Rating
Pass / Pass Watch		215,670		211,228		101,622			24,340		18,832		3,192			—			574,884
Special Mention		—		—		—			—		—		—			—			—
Classified		392		4,171		1,945			365		401		57			—			7,331
Total equipment financing agreements		216,062		215,399		103,567			24,705		19,233		3,249			—			582,215
YTD gross charge-offs		178		3,944		3,267			386		799		232			—			8,806
YTD net charge-offs (recoveries)		178		3,744		2,858			244		250		(114	)		—			7,160

Total loans receivable:
Risk Rating
Pass / Pass Watch		1,439,588		1,742,971		1,203,259			641,294		407,087		374,248			277,305			6,085,752
Special Mention		4,400		18,575		31,577			5,772		711		2,375			1,905			65,315
Classified		3,786		5,251		6,844			365		6,058		4,124			4,939			31,367
Total loans receivable	$	1,447,774	$	1,766,797	$	1,241,680		$	647,431	$	413,856	$	380,747		$	284,149		$	6,182,434
YTD gross charge-offs		178		3,961		3,267			797		909		858			6,120			16,090
YTD net charge-offs (recoveries)		178		3,749		2,851			647		351		(6,823	)		6,090			7,043

(1)

Includes extensions, renewals, or modifications of credit contracts, which consist of a new credit decision


	Term Loans
	Amortized Cost Basis by Origination Year (1)
	2022		2021		2020		2019		2018		Prior		Revolving Loans Amortized Cost Basis		Total
	(in thousands)
December 31, 2022
Real estate loans:
Commercial property
Risk Rating
Pass / Pass Watch	$	1,184,361	$	901,029	$	600,740	$	404,786	$	301,950	$	207,861	$	50,877	$	3,651,604
Special Mention		847		13,384		5,857		7,115		—		6,080		1,701		34,984
Classified		—		—		412		4,312		12,304		20,560		—		37,588
Total commercial property		1,185,208		914,413		607,009		416,213		314,254		234,501		52,578		3,724,176

Construction
Risk Rating
Pass / Pass Watch		41,662		67,543		—		—		—		—		—		109,205
Special Mention		—		—		—		—		—		—		—		—
Classified		—		—		—		—		—		—		—		—
Total construction		41,662		67,543		—		—		—		—		—		109,205

Residential
Risk Rating
Pass / Pass Watch		405,975		173,236		13,102		232		731		134,766		5,422		733,464
Special Mention		—		—		—		—		—		—		500		500
Classified		12		—		—		—		—		496		—		508
Total residential		405,987		173,236		13,102		232		731		135,262		5,922		734,472

Total real estate loans
Risk Rating
Pass / Pass Watch		1,631,998		1,141,808		613,842		405,018		302,681		342,627		56,299		4,494,273
Special Mention		847		13,384		5,857		7,115		—		6,080		2,201		35,484
Classified		12		—		412		4,312		12,304		21,056		—		38,096
Total real estate loans		1,632,857		1,155,192		620,111		416,445		314,985		369,763		58,500		4,567,853

Commercial and industrial loans:
Risk Rating
Pass / Pass Watch		368,778		100,537		39,577		24,117		7,342		12,282		205,951		758,584
Special Mention		—		9,285		—		—		29		102		34,113		43,529
Classified		—		—		171		1,097		81		391		639		2,379
Total commercial and industrial loans		368,778		109,822		39,748		25,214		7,452		12,775		240,703		804,492

Equipment financing agreements:
Risk Rating
Pass / Pass Watch		305,249		165,313		46,970		52,133		17,608		1,798		—		589,071
Special Mention		—		—		—		—		—		—		—		—
Classified		630		2,542		311		1,581		565		88		—		5,717
Total equipment financing agreements		305,879		167,855		47,281		53,714		18,173		1,886		—		594,788

Total loans receivable:
Risk Rating
Pass / Pass Watch		2,306,025		1,407,658		700,389		481,268		327,631		356,707		262,250		5,841,928
Special Mention		847		22,669		5,857		7,115		29		6,182		36,314		79,013
Classified		642		2,542		894		6,990		12,950		21,535		639		46,192
Total loans receivable	$	2,307,514	$	1,432,869	$	707,140	$	495,373	$	340,610	$	384,424	$	299,203	$	5,967,133

(1)

Includes extensions, renewals, or modifications of credit contracts, which consist of a new credit decision

Loans by Vintage Year and Payment Performance


	Term Loans
	Amortized Cost Basis by Origination Year (1)
	2023		2022		2021			2020		2019		Prior			Revolving Loans Amortized Cost Basis		Total
	(in thousands)
December 31, 2023
Real estate loans:
Commercial property
Payment performance
Performing	$	689,449	$	991,899	$	866,841		$	578,620	$	384,275	$	243,819		$	31,642	$	3,786,545
Nonperforming		1,835		—		150			—		81		783			—		2,849
Total commercial property		691,284		991,899		866,991			578,620		384,356		244,602			31,642		3,789,394
YTD gross charge-offs		—		—		—			411		—		216			—		627
YTD net charge-offs (recoveries)		—		—		—			403		—		(81	)		—		322

Construction
Payment performance
Performing		72,039		—		28,306			—		—		—			—		100,345
Nonperforming		—		—		—			—		—		—			—		—
Total construction		72,039		—		28,306			—		—		—			—		100,345
YTD gross charge-offs		—		—		—			—		—		—			—		—
YTD net charge-offs (recoveries)		—		—		—			—		—		—			—		—

Residential
Payment performance
Performing		290,196		375,712		158,618			12,656		217		119,736			5,525		962,660
Nonperforming		—		—		—			—		—		1			—		1
Total residential		290,196		375,712		158,618			12,656		217		119,737			5,525		962,661
YTD gross charge-offs		—		—		—			—		—		—			—		—
YTD net charge-offs (recoveries)		—		—		—			—		—		(7	)		—		(7	)

Total real estate loans
Payment performance
Performing		1,051,684		1,367,611		1,053,765			591,276		384,492		363,555			37,167		4,849,550
Nonperforming		1,835		—		150			—		81		784			—		2,850
Total real estate loans		1,053,519		1,367,611		1,053,915			591,276		384,573		364,339			37,167		4,852,400
YTD gross charge-offs		—		—		—			411		—		216			—		627
YTD net charge-offs (recoveries)		—		—		—			403		—		(88	)		—		315

Commercial and industrial loans:
Payment performance
Performing		177,864		183,787		84,198			31,415		10,050		13,066			242,134		742,514
Nonperforming		329		—		—			35		—		93			4,848		5,305
Total commercial and industrial loans		178,193		183,787		84,198			31,450		10,050		13,159			246,982		747,819
YTD gross charge-offs		—		17		—			—		110		410			6,120		6,657
YTD net charge-offs (recoveries)		—		5		(7	)		—		101		(6,621	)		6,090		(432	)

Equipment financing agreements:
Payment performance
Performing		215,670		211,228		101,622			24,340		18,844		3,192			—		574,896
Nonperforming		392		4,171		1,945			365		389		57			—		7,319
Total equipment financing agreements		216,062		215,399		103,567			24,705		19,233		3,249			—		582,215
YTD gross charge-offs		178		3,944		3,267			386		799		232			—		8,806
YTD net charge-offs (recoveries)		178		3,744		2,858			244		250		(114	)		—		7,160

Total loans receivable:
Payment performance
Performing		1,445,218		1,762,626		1,239,585			647,031		413,386		379,813			279,301		6,166,960
Nonperforming		2,556		4,171		2,095			400		470		934			4,848		15,474
Total loans receivable	$	1,447,774	$	1,766,797	$	1,241,680		$	647,431	$	413,856	$	380,747		$	284,149	$	6,182,434
YTD gross charge-offs		178		3,961		3,267			797		909		858			6,120		16,090
YTD net charge-offs (recoveries)		178		3,749		2,851			647		351		(6,823	)		6,090		7,043

(1)

Includes extensions, renewals, or modifications of credit contracts, which consist of a new credit decision


	Term Loans
	Amortized Cost Basis by Origination Year (1)
	2022		2021		2020		2019		2018		Prior		Revolving Loans Amortized Cost Basis		Total
	(in thousands)
December 31, 2022
Real estate loans:
Commercial property
Payment performance
Performing	$	1,185,208	$	914,413	$	606,597	$	416,213	$	312,324	$	233,643	$	52,578	$	3,720,976
Nonperforming		—		—		412		—		1,930		858				3,200
Total commercial property		1,185,208		914,413		607,009		416,213		314,254		234,501		52,578		3,724,176

Construction
Payment performance
Performing		41,662		67,543		—		—		—		—		—		109,205
Nonperforming		—		—		—		—		—		—		—		—
Total construction		41,662		67,543		—		—		—		—		—		109,205

Residential
Payment performance
Performing		405,975		173,236		13,102		232		731		134,766		5,922		733,964
Nonperforming		12		—		—		—		—		496		—		508
Total residential		405,987		173,236		13,102		232		731		135,262		5,922		734,472

Total real estate loans
Payment performance
Performing		1,632,845		1,155,192		619,699		416,445		313,055		368,409		58,500		4,564,145
Nonperforming		12		—		412		—		1,930		1,354		—		3,708
Total real estate loans		1,632,857		1,155,192		620,111		416,445		314,985		369,763		58,500		4,567,853

Commercial and industrial loans:
Payment performance
Performing		368,778		109,822		39,577		25,199		7,452		12,539		240,703		804,070
Nonperforming		—		—		171		15		—		236		—		422
Total commercial and industrial loans		368,778		109,822		39,748		25,214		7,452		12,775		240,703		804,492

Equipment financing agreements:
Payment performance
Performing		305,249		165,313		46,970		52,133		17,608		1,798		—		589,071
Nonperforming		630		2,542		311		1,581		565		88		—		5,717
Total equipment financing agreements		305,879		167,855		47,281		53,714		18,173		1,886		—		594,788

Total loans receivable:
Payment performance
Performing		2,306,872		1,430,327		706,246		493,777		338,115		382,746		299,203		5,957,286
Nonperforming		642		2,542		894		1,596		2,495		1,678		—		9,847
Total loans receivable	$	2,307,514	$	1,432,869	$	707,140	$	495,373	$	340,610	$	384,424	$	299,203	$	5,967,133

(1)

Includes extensions, renewals, or modifications of credit contracts, which consist of a new credit decision

Schedule of Amortized Cost Basis of Loans on Nonaccrual Status and Loans Past Due 90 Days and Still Accruing

The following tables represent the amortized cost basis of loans on nonaccrual status and loans past due 90 days and still accruing as of December 31, 2023 and 2022.


	December 31, 2023
	Nonaccrual Loans With No Allowance for Credit Losses		Nonaccrual Loans With Allowance for Credit Losses		Loans Past Due 90 Days Still Accruing		Total Nonperforming Loans
	(in thousands)
Real estate loans:
Commercial property
Retail	$	1,717	$	321	$	—	$	2,038
Hospitality		338		150		—		488
Office		—		—		—		—
Other		305		18		—		323
Total commercial property loans		2,360		489		—		2,849
Residential		1		—		—		1
Total real estate loans		2,361		489		—		2,850
Commercial and industrial loans		5,213		92		—		5,305
Equipment financing agreements		570		6,749		—		7,319
Total	$	8,144	$	7,330	$	—	$	15,474

	December 31, 2022
	Nonaccrual Loans With No Allowance for Credit Losses		Nonaccrual Loans With Allowance for Credit Losses		Loans Past Due 90 Days Still Accruing		Total Nonperforming Loans
	(in thousands)
Real estate loans:
Commercial property
Retail	$	1,929	$	—	$	—	$	1,929
Other		540		731		—		1,271
Total commercial property loans		2,469		731		—		3,200
Residential		508		—		—		508
Total real estate loans		2,977		731		—		3,708
Commercial and industrial loans		—		422		—		422
Equipment financing agreements		215		5,501		—		5,716
Total	$	3,192	$	6,654	$	—	$	9,846

The Company recognized $0.2 million, $46,000 and $0.7 million of interest income on nonaccrual loans for the twelve months ended December 31, 2023, 2022 and 2021, respectively.

Analysis of Past Due Loans, Disaggregated by Loan Class

The following is an aging analysis of loans, disaggregated by loan class, as of the dates indicated:


	30-59 Days Past Due		60-89 Days Past Due		90 Days or More Past Due		Total Past Due		Current		Total
	(in thousands)
December 31, 2023
Real estate loans:
Commercial property
Retail	$	632	$	—	$	—	$	632	$	1,106,728	$	1,107,360
Hospitality		—		150		22		172		740,347		740,519
Office		—		—		—		—		574,981		574,981
Other		592		—		—		592		1,365,942		1,366,534
Total commercial property loans		1,224		150		22		1,396		3,787,998		3,789,394
Construction		—		—		—		—		100,345		100,345
Residential		521		336		1		858		961,803		962,661
Total real estate loans		1,745		486		23		2,254		4,850,146		4,852,400
Commercial and industrial loans		76		120		5,178		5,374		742,445		747,819
Equipment financing agreements		7,138		2,134		4,551		13,823		568,392		582,215
Total loans receivable	$	8,959	$	2,740	$	9,752	$	21,451	$	6,160,983	$	6,182,434

December 31, 2022
Real estate loans:
Commercial property
Retail	$	—	$	—	$	—	$	—	$	1,023,608	$	1,023,608
Hospitality		—		—		—		—		646,893		646,893
Office		—		—		—		—		499,946		499,946
Other		—		494		—		494		1,553,235		1,553,729
Total commercial property loans		—		494		—		494		3,723,682		3,724,176
Construction		—		—		—		—		109,205		109,205
Residential		313		804		7		1,124		733,348		734,472
Total real estate loans		313		1,298		7		1,618		4,566,235		4,567,853
Commercial and industrial loans		77		79		—		156		804,336		804,492
Equipment financing agreements		5,825		1,271		2,949		10,045		584,743		594,788
Total loans receivable	$	6,215	$	2,648	$	2,956	$	11,819	$	5,955,314	$	5,967,133

Non-Performing Assets

The following table details nonperforming assets as of the dates indicated:


	As of December 31,
	2023		2022
	(in thousands)
Nonaccrual loans	$	15,474	$	9,846
Loans receivable 90 days or more past due and still accruing		—		—
Total nonperforming loans receivable		15,474		9,846
Other real estate owned ("OREO")		117		117
Total nonperforming assets	$	15,591	$	9,963