Hanmi Financial Corporation Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Fair Value Measurements (Tables)

Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2015

Assets and Liabilities Measured at Fair Value on Recurring Basis

As of March 31, 2015 and December 31, 2014, assets and liabilities measured at fair value on a recurring basis are as follows:


	Level 1		Level 2		Level 3
	Quoted Prices in Active Markets for Identical Assets		Significant Observable Inputs with No Active Market with Identical Characteristics		Significant Unobservable Inputs		Balance
	(In thousands)
March 31, 2015
Assets:
Securities available for sale:
Mortgage-backed securities	$	—	$	492,896	$	—	$	492,896
Collateralized mortgage obligations		—		165,405		—		165,405
U.S. government agency securities		63,355		—		—		63,355
SBA loan pools securities		—		75,027		—		75,027
Municipal bonds-tax exempt		—		3,676		—		3,676
Municipal bonds-taxable		—		17,042		—		17,042
Corporate bonds		—		16,984		—		16,984
U.S. treasury securities		163		—		—		163
Other securities		—		23,100		—		23,100
Equity securities		—		—		416		416

Total securities available for sale	$	63,518	$	794,130	$	416	$	858,064

December 31, 2014
Assets:
Securities available for sale:
Mortgage-backed securities	$	—	$	573,286	$	—	$	573,286
Collateralized mortgage obligations		—		188,047		—		188,047
U.S. government agency securities		128,207		—		—		128,207
SBA loan pools securities		—		109,447		—		109,447
Municipal bonds-tax exempt		—		3,681		709		4,390
Municipal bonds-taxable		—		16,922		—		16,922
Corporate bonds		—		16,948		—		16,948
U.S. treasury securities		163		—		—		163
Other securities		—		22,893		—		22,893
Equity securities		—		—		414		414

Total securities available for sale	$	128,370	$	931,224	$	1,123	$	1,060,717

Reconciliation and Income Statement Classification of Gains and Losses for All Assets and Liabilities

The table below presents a reconciliation and income statement classification of gains and losses for all assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the three months ended March 31, 2015:


	Beginning Balance as of January 1, 2015		Purchases, Issuances and Settlement			Realized Gains or Losses in Earnings		Unrealized Gains or Losses in Other Comprehensive Income		Ending Balance as of March 31, 2015
			(In thousands)
Assets:
Municipal bonds-tax exempt ⁽¹⁾	$	709	$	(709	)	$	—	$	—	$	—
Equity securities ⁽²⁾		414		—			—		2		416

⁽¹⁾

A zero coupon tax credit municipal bond matured during the first quarter of 2015.

⁽²⁾

Reflects two equity securities that are not actively traded. The fair value of one equity security with a fair value of $216,000 was computed using valuation multiples (price to book and price to earnings) derived from market transactions for comparable companies. The other equity security with a fair value of $200,000 was computed using valuation multiples (price to book and price to earnings) derived from 1) market transactions for comparable companies, and 2) publicly-traded comparable companies.

Assets and Liabilities Measured at Fair Value on Non-Recurring Basis

As of March 31, 2015 and December 31, 2014, assets and liabilities measured at fair value on a non-recurring basis are as follows:


	Level 1		Level 2		Level 3
	Quoted Prices in Active Markets for Identical Assets		Significant Observable Inputs With No Active Market With Identical Characteristics		Significant Unobservable Inputs		Loss During the Three Months Ended March 31, 2015
			(In thousands)
March 31, 2015
Assets:
Impaired loans (excluding PCI loans) ⁽¹⁾	$	—	$	32,116	$	956	$	1,200
Other real estate owned ⁽²⁾		—		12,114		—		—

	Level 1		Level 2		Level 3
	Quoted Prices in Active Markets for Identical Assets		Significant Observable Inputs With No Active Market With Identical Characteristics		Significant Unobservable Inputs		Loss During the Twelve Months Ended December 31, 2014
			(In thousands)
December 31, 2014
Assets:
Impaired loans ⁽³⁾	$	—	$	32,171	$	781	$	2,774
Other real estate owned ⁽⁴⁾		—		15,790		—		—

⁽¹⁾

Include real estate loans of $30.1 million, commercial and industrial loans of $1.1 million, and consumer loans of $1.8 million.

⁽²⁾

Includes properties from the foreclosure of commercial property loans of $12.0 million and residential property loans of $163,000.

⁽³⁾

Include real estate loans of $30.0 million, commercial and industrial loans of $1.2 million, and consumer loans of $1.7 million.

⁽⁴⁾

Includes properties from the foreclosure of commercial property loans of $13.2 million and residential property loans of 2.6 million.

Estimated Fair Values of Financial Instruments

The estimated fair values of financial instruments were as follows:


	March 31, 2015
	Carrying		Fair Value
	Amount		Level 1		Level 2		Level 3
			(In thousands)
Financial assets:
Cash and cash equivalents	$	182,054	$	182,054	$	—	$	—
Securities available for sale		858,064		63,518		794,130		416
Loans receivable, net of allowance for loan losses		2,767,080		—		—		2,772,612
Loans held for sale		8,677		—		8,677		—
Accrued interest receivable		9,238		9,238		—		—
Servicing assets		13,321		—		—		13,321
Investment in FHLB stock		17,581		17,581		—		—
Investment in FRB stock		12,273		12,273		—		—
Financial liabilities:
Noninterest-bearing deposits		1,064,695		—		1,064,695		—
Interest-bearing deposits		2,487,981		—		—		2,500,027
Servicing liabilities		5,529		—		—		5,529
Borrowings		18,582		—		—		18,582
Accrued interest payable		3,497		3,497		—		—
Off-balance sheet items:
Commitments to extend credit		297,912		—		—		297,912
Standby letters of credit		6,299		—		—		6,299

	December 31, 2014
	Carrying		Fair Value
	Amount		Level 1		Level 2		Level 3
			(In thousands)
Financial assets:
Cash and cash equivalents	$	158,320	$	158,320	$	—	$	—
Securities available for sale		1,060,717		128,370		931,224		1,123
Loans receivable, net of allowance for loan losses		2,735,932		—		—		2,738,401
Loans held for sale		5,451		—		5,451		—
Accrued interest receivable		9,749		9,749		—		—
Servicing assets		13,773		—		—		13,773
Investment in FHLB stock		17,580		17,580		—		—
Investment in FRB stock		12,273		12,273		—		—
Financial liabilities:
Noninterest-bearing deposits		1,022,972		—		1,022,972		—
Interest-bearing deposits		2,533,774		—		—		2,528,304
Servicing liabilities		5,971		—		—		5,971
Borrowings		168,544		—		—		168,544
Accrued interest payable		3,450		3,450		—		—
Off-balance sheet items:
Commitments to extend credit		309,584		—		—		309,584
Standby letters of credit		8,982		—		—		8,982

- Definition

Tabular disclosure of the fair value measurement of assets using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes during the period attributable to the following: (1) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings (or changes in net assets) and gains or losses recognized in other comprehensive income (loss), and a description of where those gains or losses included in earnings (or changes in net assets) are reported in the statement of income (or activities); (2) purchases, sales, issues, and settlements (each type disclosed separately); and (3) transfers in and transfers out of Level 3 (for example, transfers due to changes in the observability of significant inputs), by class of asset.

+ References + Details

- Definition

Tabular disclosure of the fair value of financial instruments, including financial assets and financial liabilities, and the measurements of those instruments, assets, and liabilities.

+ References + Details