Quarterly report pursuant to Section 13 or 15(d)

Regulatory Matters

v3.22.1
Regulatory Matters
 3 Months Ended
Mar. 31, 2022
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 March 31, 2022, 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 must be met to avoid limitations on the ability of the Bank and the Company to pay dividends, repurchase shares or pay discretionary bonuses. The Bank's capital conservation buffer was 6.19 percent and 6.70 percent and the Company's capital conservation buffer was 5.71 percent and 5.93 percent as of March 31, 2022 and December 31, 2021, respectively.

In March 2020, federal banking agencies 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 March 31, 2022 and December 31, 2021 were as follows:

 

 

 

 

 

 

 

 

 

 

 

Minimum

 

 

Minimum to Be

 

 

 

 

 

 

 

 

 

 

 

Regulatory

 

 

Categorized as

 

 

 

Actual

 

 

Requirement

 

 

“Well Capitalized”

 

 

 

Amount

 

 

Ratio

 

 

Amount

 

 

Ratio

 

 

Amount

 

 

Ratio

 

 

 

(dollars in thousands)

 

March 31, 2022

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total capital (to risk-weighted assets):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Hanmi Financial

 

$

839,015

 

 

 

14.73

%

 

$

455,784

 

 

 

8.00

%

 

N/A

 

 

N/A

 

Hanmi Bank

 

$

806,922

 

 

 

14.19

%

 

$

455,023

 

 

 

8.00

%

 

$

568,778

 

 

 

10.00

%

Tier 1 capital (to risk-weighted assets):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Hanmi Financial

 

$

666,887

 

 

 

11.71

%

 

$

341,838

 

 

 

6.00

%

 

N/A

 

 

N/A

 

Hanmi Bank

 

$

744,794

 

 

 

13.09

%

 

$

341,267

 

 

 

6.00

%

 

$

455,023

 

 

 

8.00

%

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Hanmi Financial

 

$

645,954

 

 

 

11.34

%

 

$

256,378

 

 

 

4.50

%

 

N/A

 

 

N/A

 

Hanmi Bank

 

$

744,794

 

 

 

13.09

%

 

$

255,950

 

 

 

4.50

%

 

$

369,706

 

 

 

6.50

%

Tier 1 capital (to average assets):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Hanmi Financial

 

$

666,887

 

 

 

9.70

%

 

$

274,915

 

 

 

4.00

%

 

N/A

 

 

N/A

 

Hanmi Bank

 

$

744,794

 

 

 

10.84

%

 

$

274,835

 

 

 

4.00

%

 

$

343,544

 

 

 

5.00

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total capital (to risk-weighted assets):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Hanmi Financial

 

$

912,527

 

 

 

16.57

%

 

$

440,639

 

 

 

8.00

%

 

N/A

 

 

N/A

 

Hanmi Bank

 

$

809,279

 

 

 

14.70

%

 

$

440,493

 

 

 

8.00

%

 

$

550,616

 

 

 

10.00

%

Tier 1 capital (to risk-weighted assets):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Hanmi Financial

 

$

657,250

 

 

 

11.93

%

 

$

330,479

 

 

 

6.00

%

 

N/A

 

 

N/A

 

Hanmi Bank

 

$

748,177

 

 

 

13.59

%

 

$

330,369

 

 

 

6.00

%

 

$

440,493

 

 

 

8.00

%

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Hanmi Financial

 

$

636,419

 

 

 

11.55

%

 

$

247,859

 

 

 

4.50

%

 

N/A

 

 

N/A

 

Hanmi Bank

 

$

748,177

 

 

 

13.59

%

 

$

247,777

 

 

 

4.50

%

 

$

357,900

 

 

 

6.50

%

Tier 1 capital (to average assets):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Hanmi Financial

 

$

657,250

 

 

 

9.63

%

 

$

273,133

 

 

 

4.00

%

 

N/A

 

 

N/A

 

Hanmi Bank

 

$

748,177

 

 

 

10.96

%

 

$

273,101

 

 

 

4.00

%

 

$

341,376

 

 

 

5.00

%