Quarterly report pursuant to Section 13 or 15(d)

Regulatory Matters

v3.21.2
Regulatory Matters
 9 Months Ended
Sep. 30, 2021
Regulatory Capital Requirements Under Banking Regulations [Abstract]  
Regulatory Matters

Note 10 — Regulatory Matters

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 6.0 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 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 8.0 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.

At September 30, 2021, the Bank’s capital ratios exceeded the minimum requirements for the Bank to be considered “well capitalized” and the Company exceeded all of its applicable minimum regulatory capital ratio requirements.

A capital conservation buffer of 2.5 percent became effective on 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. The Bank's capital conservation buffer was 7.17 percent and 6.86 percent and the Company's capital conservation buffer was 6.18 percent and 5.93 percent as of September 30, 2021 and December 31, 2020, respectively.

In March 2020, the OCC, the Board of Governors of the Federal Reserve System, and the FDIC announced an interim final rule to delay the impact on regulatory capital arising from the implementation of CECL. The interim final rule maintains the three-year transition option in the previous rule and provides banks the option to delay for two years an estimate of CECL’s effect on regulatory capital, relative to the incurred loss methodology’s effect on regulatory capital, followed by a three-year transition period (five-year transition option). The Company and the Bank adopted the capital transition relief over the permissible five-year period.

The capital ratios of Hanmi Financial and the Bank as of September 30, 2021 and December 31, 2020 were as follows:

 

 

 

 

 

 

 

 

 

 

 

Minimum

 

 

Minimum to Be

 

 

 

 

 

 

 

 

 

 

 

Regulatory

 

 

Categorized as

 

 

 

Actual

 

 

Requirement

 

 

“Well Capitalized”

 

 

 

Amount

 

 

Ratio

 

 

Amount

 

 

Ratio

 

 

Amount

 

 

Ratio

 

 

 

(in thousands)

 

September 30, 2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total capital (to risk-weighted assets):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Hanmi Financial

 

$

890,412

 

 

 

17.18

%

 

$

414,662

 

 

 

8.00

%

 

N/A

 

 

N/A

 

Hanmi Bank

 

$

786,150

 

 

 

15.17

%

 

$

414,653

 

 

 

8.00

%

 

$

518,317

 

 

 

10.00

%

Tier 1 capital (to risk-weighted assets):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Hanmi Financial

 

$

631,277

 

 

 

12.18

%

 

$

310,997

 

 

 

6.00

%

 

N/A

 

 

N/A

 

Hanmi Bank

 

$

721,131

 

 

 

13.91

%

 

$

310,990

 

 

 

6.00

%

 

$

414,653

 

 

 

8.00

%

Common equity Tier 1 capital (to risk-weighted assets)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Hanmi Financial

 

$

610,548

 

 

 

11.78

%

 

$

233,248

 

 

 

4.50

%

 

N/A

 

 

N/A

 

Hanmi Bank

 

$

721,131

 

 

 

13.91

%

 

$

233,242

 

 

 

4.50

%

 

$

336,906

 

 

 

6.50

%

Tier 1 capital (to average assets):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Hanmi Financial

 

$

631,277

 

 

 

9.50

%

 

$

265,683

 

 

 

4.00

%

 

N/A

 

 

N/A

 

Hanmi Bank

 

$

721,131

 

 

 

10.86

%

 

$

265,650

 

 

 

4.00

%

 

$

332,063

 

 

 

5.00

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total capital (to risk-weighted assets):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Hanmi Financial

 

$

743,091

 

 

 

15.21

%

 

$

390,884

 

 

 

8.00

%

 

N/A

 

 

N/A

 

Hanmi Bank

 

$

726,532

 

 

 

14.86

%

 

$

391,114

 

 

 

8.00

%

 

$

488,893

 

 

 

10.00

%

Tier 1 capital (to risk-weighted assets):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Hanmi Financial

 

$

583,076

 

 

 

11.93

%

 

$

293,163

 

 

 

6.00

%

 

N/A

 

 

N/A

 

Hanmi Bank

 

$

665,058

 

 

 

13.60

%

 

$

293,336

 

 

 

6.00

%

 

$

391,114

 

 

 

8.00

%

Common equity Tier 1 capital (to risk-weighted assets)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Hanmi Financial

 

$

562,647

 

 

 

11.52

%

 

$

219,872

 

 

 

4.50

%

 

N/A

 

 

N/A

 

Hanmi Bank

 

$

665,058

 

 

 

13.60

%

 

$

220,002

 

 

 

4.50

%

 

$

317,780

 

 

 

6.50

%

Tier 1 capital (to average assets):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Hanmi Financial

 

$

583,076

 

 

 

9.49

%

 

$

245,882

 

 

 

4.00

%

 

N/A

 

 

N/A

 

Hanmi Bank

 

$

665,059

 

 

 

10.83

%

 

$

245,736

 

 

 

4.00

%

 

$

307,170

 

 

 

5.00

%