Quarterly report pursuant to Section 13 or 15(d)

Sale of Insurance Subsidiaries and Discontinued Operations

v2.4.1.9
Sale of Insurance Subsidiaries and Discontinued Operations
 3 Months Ended
Mar. 31, 2015
Discontinued Operations and Disposal Groups [Abstract]  
Sale of Insurance Subsidiaries and Discontinued Operations

Note 4 — 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 loss and an $11,000 income tax expense. Consequently, the net loss from discontinued operations for the second quarter of 2014 was $444,000, or $0.01 per diluted share. For the three months ended March 31, 2014, the discontinued operations generated noninterest income, primarily in the line item for insurance commissions, of $1.4 million and incurred noninterest expense of $1.4 million in various line items.

 

Summarized financial information for our discontinued operations related to Chun-Ha and All World are as follows:

 

     March 31,
2014 		 
     (In thousands)  

Cash and cash equivalents

    $ 1,628   

Premises and equipment, net

      73   

Other intangible assets, net

      1,130   

Other assets

      2,764   
  

 

 

  

Total assets

 $ 5,595   
  

 

 

  

Income tax payable

 $ 1,319   

Accrued expenses and other liabilities

   1,785   
  

 

 

  

Total liabilities

 $ 3,104   
  

 

 

  

Net assets of discontinued operations

 $ 2,491   
  

 

 

  
     Three Months
Ended March 31,
2014		  
     (In thousands)  

Noninterest income

    $ 37   

Provision for income taxes

      15   
  

 

 

  

Net income from discontinued operations

 $ 22