Hanmi Financial Corporation Quarterly report [Sections 13 or 15(d)]

Quarterly report [Sections 13 or 15(d)]

Fair Value Measurements (Tables)

Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2025

Assets and Liabilities Measured at Fair Value on Recurring Basis

As of June 30, 2025 and December 31, 2024, assets and liabilities measured at fair value on a recurring basis are as follows:


	Level 1		Level 2		Level 3
			Significant
			Observable
	Quoted Prices in		Inputs with No
	Active Markets		Active Market		Significant
	for Identical		with Identical		Unobservable
	Assets		Characteristics		Inputs		Total Fair Value
	(in thousands)
June 30, 2025
Assets:
Securities available for sale:
U.S. Treasury securities	$	119,821	$	—	$	—	$	119,821
U.S. government agency and sponsored agency obligations:
Mortgage-backed securities - residential		—		388,032		—		388,032
Mortgage-backed securities - commercial		—		61,350		—		61,350
Collateralized mortgage obligations		—		198,654		—		198,654
Debt securities		—		85,160		—		85,160
Total U.S. government agency and sponsored agency obligations		—		733,196		—		733,196
Municipal bonds-tax exempt		—		65,077		—		65,077
Total securities available for sale	$	119,821	$	798,273	$	—	$	918,094
Derivative financial instruments	$	—	$	3,283	$	—	$	3,283

Liabilities:
Derivative financial instruments	$	—	$	3,439	$	—	$	3,439

December 31, 2024
Assets:
Securities available for sale:
U.S. Treasury securities	$	88,929	$	—	$	—	$	88,929
U.S. government agency and sponsored agency obligations:
Mortgage-backed securities - residential		—		392,572		—		392,572
Mortgage-backed securities - commercial		—		62,916		—		62,916
Collateralized mortgage obligations		—		173,556		—		173,556
Debt securities		—		122,816		—		122,816
Total U.S. government agency and sponsored agency obligations		—		751,860		—		751,860
Municipal bonds-tax exempt		—		65,009		—		65,009
Total securities available for sale	$	88,929	$	816,869	$	—	$	905,798
Derivative financial instruments	$	—	$	4,690	$	—	$	4,690

Liabilities:
Derivative financial instruments	$	—	$	5,292	$	—	$	5,292

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

As of June 30, 2025 and December 31, 2024, assets and liabilities measured at fair value on a non-recurring basis are as follows:


			Level 1		Level 2		Level 3
					Significant
					Observable
			Quoted Prices in		Inputs With No
			Active Markets		Active Market		Significant
			for Identical		With Identical		Unobservable
	Total		Assets		Characteristics		Inputs
	(in thousands)
June 30, 2025
Assets:
Collateral dependent loans (1)	$	18,269	$	—	$	—	$	18,269
Repossessed personal property		605		—		—		605

December 31, 2024
Assets:
Collateral dependent loans (2)	$	3,467	$	—	$	—	$	3,467
Other real estate owned		117		—		—		117
Repossessed personal property		568		—		—		568

(1)

Consisted of real estate loans of $18.3 million.

(2)

Consisted of real estate loans of $3.5 million.

Quantitative Information about Level 3 Fair Value Assumptions for Assets Measured at Fair Value on Non-Recurring Basis

The following table represents quantitative information about Level 3 fair value assumptions for assets measured at fair value on a non-recurring basis at June 30, 2025 and December 31, 2024:


	Fair Value		Valuation Techniques	Unobservable Input(s)	Range (Weighted Average)
	(in thousands)
June 30, 2025
Collateral dependent loans:
Real estate loans:
Commercial property
Retail	$	874	Market approach	Adjustments to market data	(45%) to 6% / (17)%	(1)
Hospitality		2,408	Market approach	Adjustments to market data	(11)% to 17% / 1%	(1)
Office		10,990	Market approach	Adjustments to market data	(26)% to (4)% / (14)%	(1)
Residential		3,997	Market approach	Adjustments to market data	(11) to 17% / (1)%	(1)
Total real estate loans		18,269
Total	$	18,269


Repossessed personal property		605	Market approach	Adjustments to market data	N/A	(2)

December 31, 2024
Collateral dependent loans:
Real estate loans:
Commercial property
Retail	$	1,377	Market approach	Adjustments to market data	(45)% to 30% / (10)%	(1)
Hospitality		215	Market approach	Adjustments to market data	(11)% to 17% / 5%	(1)
Residential		1,875	Market approach	Adjustments to market data	(11)% to 8% / (2)%	(1)
Total real estate loans		3,467
Total	$	3,467

Other real estate owned	$	117	Market approach	Adjustments to market data	0% to 5% / 4%	(1)

Repossessed personal property		568	Market approach	Adjustments to market data	N/A	(2)

(1)

Appraisal reports utilize a combination of valuation techniques including a market approach, where prices and other relevant information generated by market transactions involving similar or comparable properties are used to determine the appraised value. Appraisals may include an ‘as is’ and ‘upon completion’ valuation scenarios. Adjustments are routinely made in the appraisal process by third-party appraisers to adjust for differences between the comparable sales and income data. Adjustments also result from the consideration of relevant economic and demographic factors with the potential to affect property values. Also, prospective values are based on the market conditions which exist at the date of inspection combined with informed forecasts based on current trends in supply and demand for the property types under appraisal. Positive adjustments disclosed in this table represent increases to the sales comparison and negative adjustments represent decreases.

(2)

The equipment is usually too small in value to use a professional appraisal service. The values are determined internally using a combination of auction values, vendor recommendations and sales comparisons depending on the equipment type. Some highly commoditized equipment, such as commercial trucks have services that provide industry values.

Estimated Fair Values of Financial Instruments

The estimated fair values of financial instruments were as follows:


	June 30, 2025
	Carrying		Fair Value
	Amount		Level 1		Level 2		Level 3
	(in thousands)
Financial assets:
Cash and due from banks	$	380,050	$	380,050	$	—	$	—
Securities available for sale		918,094		119,821		798,273		—
Loans held for sale		49,611		—		51,126		—
Loans receivable, net of allowance for credit losses		6,239,201		—		—		6,195,404
Accrued interest receivable		23,749		23,749		—		—
Derivative financial instruments		3,283		—		3,283		—

Financial liabilities:
Noninterest-bearing deposits		2,105,369		—		2,105,369		—
Interest-bearing deposits		4,623,753		—		—		4,620,420
Borrowings and subordinated debentures		258,460		—		127,460		134,212
Accrued interest payable		30,567		30,567		—		—
Derivative financial instruments		3,439		—		3,439		—


	December 31, 2024
	Carrying		Fair Value
	Amount		Level 1		Level 2		Level 3
	(in thousands)
Financial assets:
Cash and due from banks	$	304,800	$	304,800	$	—	$	—
Securities available for sale		905,798		88,929		816,869		—
Loans held for sale		8,579		—		9,229		—
Loans receivable, net of allowance for credit losses		6,181,230		—		—		6,078,567
Accrued interest receivable		22,937		22,937		—		—

Financial liabilities:
Noninterest-bearing deposits		2,096,634		—		2,096,634		—
Interest-bearing deposits		4,339,142		—		—		4,336,429
Borrowings and subordinated debentures		393,138		—		262,183		129,226
Accrued interest payable		34,824		34,824		—		—