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

Annual report pursuant to Section 13 and 15(d)

Derivatives and Hedging Activities (Tables)

Derivatives and Hedging Activities (Tables)

12 Months Ended

Dec. 31, 2023

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of Fair Value of Derivative Financial Instruments as well as their Classification on Balance Sheet

The table below presents the fair value of the Company’s derivative financial instruments as well as their classification on the Balance Sheet as of December 31, 2023 and 2022.


As of December 31, 2023	Derivative Assets					Derivative Liabilities
	Notional Amount		Balance Sheet Location	Fair Value		Notional Amount		Balance Sheet Location	Fair Value
	(in thousands)
Derivatives not designated as hedging instruments
Interest rate products	$	104,571	Other Assets	$	5,939	$	104,571	Other Liabilities	$	5,920
Total derivatives not designated as hedging instruments				$	5,939				$	5,920

Derivatives designated as hedging instruments
Interest rate products	$	100,000	Other Assets	$	306	$	—	Other Liabilities	$	—
Total derivatives designated as hedging instruments				$	306				$	—

As of December 31, 2022	Derivative Assets					Derivative Liabilities
	Notional Amount		Balance Sheet Location	Fair Value		Notional Amount		Balance Sheet Location	Fair Value
	(in thousands)
Derivatives not designated as hedging instruments
Interest rate products	$	61,460	Other Assets	$	7,507	$	61,460	Other Liabilities	$	7,375
Total derivatives not designated as hedging instruments				$	7,507				$	7,375

Summary of Effect of Cash Flow Hedge Accounting on Accumulated Other Comprehensive Income

The table below presents the effect of cash flow hedge accounting on Accumulated Other Comprehensive Income as of December 31, 2023.


As of December 31, 2023
Derivatives in Subtopic 815-20 Hedging Relationships	Amount of Gain or (Loss) Recognized in OCI on Derivative		Amount of Gain or (Loss) Recognized in OCI Included Component		Amount of Gain or (Loss) Recognized in OCI Excluded Component		Location of Gain or (Loss) Recognized from Accumulated Other Comprehensive Income into Income	Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income		Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income Included Component		Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income Excluded Component
	(in thousands)
Derivatives in Cash Flow Hedging Relationships
Interest Rate Products	$	306	$	306	$	—	Interest Income	$	—	$	—	$	—
Total	$	306	$	306	$	—		$	—	$	—	$	—

Effect of Derivative Financial Instruments that are Not Designated as Hedging Instruments on Income Statement

The table below presents the effect of the Company’s derivative financial instruments that are not designated as hedging instruments on the Income Statement as of December 31, 2023, 2022 and 2021.


Derivatives Not Designated as Hedging Instruments under Subtopic 815-20	Location of Gain or (Loss) Recognized in Income on Derivative	Amount of Gain or (Loss) Recognized in Income on Derivative
		For the Year Ended December 31,
		2023			2022		2021
		(in thousands)
Interest rate products	Other income	$	(114	)	$	113	$	80
Total		$	(114	)	$	113	$	80

Summary of Gross Presentation, Effects of Offsetting and a Net Presentation of Derivatives

The table below presents a gross presentation, the effects of offsetting, and a net presentation of the Company’s derivatives as of December 31, 2023 and 2022. The net amounts of derivative assets or liabilities can be reconciled to the tabular disclosure of fair value. The tabular disclosure of fair value provides the location that derivative assets and liabilities are presented on the Balance Sheet.


Offsetting of Derivative Assets
As of December 31, 2023
							Gross Amounts Not Offset in the Consolidated Balance Sheets
	Gross Amounts of Recognized Assets		Gross Amounts Offset in the Statement of Financial Position		Net Amounts of Assets presented in the Statement of Financial Position		Financial Instruments		Cash Collateral Received		Net Amount
	(in thousands)
Derivatives	$	6,245	$	—	$	6,245	$	284	$	5,731	$	230


Offsetting of Derivative Liabilities
As of December 31, 2023
							Gross Amounts Not Offset in the Consolidated Balance Sheets
	Gross Amounts of Recognized Liabilities		Gross Amounts Offset in the Statement of Financial Position		Net Amounts of Liabilities presented in the Statement of Financial Position		Financial Instruments		Cash Collateral Provided		Net Amount
	(in thousands)
Derivatives	$	5,920	$	—	$	5,920	$	284	$	—	$	5,636


Offsetting of Derivative Assets
As of December 31, 2022
							Gross Amounts Not Offset in the Consolidated Balance Sheets
	Gross Amounts of Recognized Assets		Gross Amounts Offset in the Statement of Financial Position		Net Amounts of Assets presented in the Statement of Financial Position		Financial Instruments		Cash Collateral Received		Net Amount
	(in thousands)
Derivatives	$	7,507	$	—	$	7,507	$	7,375	$	132	$	—


Offsetting of Derivative Liabilities
As of December 31, 2022
							Gross Amounts Not Offset in the Consolidated Balance Sheets
	Gross Amounts of Recognized Liabilities		Gross Amounts Offset in the Statement of Financial Position		Net Amounts of Liabilities presented in the Statement of Financial Position		Financial Instruments		Cash Collateral Provided		Net Amount
	(in thousands)
Derivatives	$	7,375	$	—	$	7,375	$	7,375	$	—	$	—

- Definition

Tabular disclosure of pertinent information about a derivative or group of derivatives on a disaggregated basis, such as for individual instruments, or small groups of similar instruments. May include a combination of the type of instrument, risks being hedged, notional amount, hedge designation, related hedged item, inception date, maturity date, or other relevant item.

+ References + Details