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

Quarterly report pursuant to Section 13 or 15(d)

Loans (Tables)

Loans (Tables)

3 Months Ended

Mar. 31, 2013

Loans receivable consisted of the following as of the dates indicated:


	March 31, 2013			December 31, 2012
	(In Thousands)
Real Estate Loans:
Commercial Property	$	831,019		$	787,094
Residential Property		94,735			101,778

Total Real Estate Loans		925,754			888,872
Commercial and Industrial Loans:
Commercial Term ⁽¹⁾		921,009			884,364
Commercial Lines of Credit ⁽²⁾		49,608			56,121
SBA Loans ⁽³⁾		158,687			148,306
International Loans		31,448			34,221

Total Commercial and Industrial Loans		1,160,752			1,123,012
Consumer Loans		35,180			36,676

Total Gross Loans		2,121,686			2,048,560
Allowance for Loans Losses		(61,191	)		(63,305	)
Deferred Loan Fees		661			796

Loans Receivable, Net	$	2,061,156		$	1,986,051

(1)

Includes owner-occupied property loans of $882.5 million and $774.2 million as of March 31, 2013 and December 31, 2012, respectively.

(2)

Includes owner-occupied property loans of $1.3 million and $1.4 million as of March 31, 2013 and December 31, 2012, respectively.

(3)

Includes owner-occupied property loans of $141.9 million and $128.4 million as of March 31, 2013 and December 31, 2012, respectively.

Loans Receivable to Loans Held for Sale

The following table details the information on the sales and reclassifications of loans receivable to loans held for sale by portfolio segment for the three months ended March 31, 2013 and 2012:


	Real Estate			Commercial and Industrial			Consumer		Total
	(In Thousands)
March 31, 2013
Balance at Beginning of Period	$	—		$	8,306		$	—	$	8,306
Origination of Loans Held For Sale		—			23,144			—		23,144
Reclassification from Loans Receivable to Loans Held for Sale		—			3,373			—		3,373
Sales of Loans Held for Sale		—			(28,765	)		—		(28,765	)
Principal Payoffs and Amortization		—			(15	)		—		(15	)

Balance at End of Period	$	—		$	6,043		$	—	$	6,043

March 31, 2012
Balance at Beginning of Period	$	11,068		$	11,519		$	—	$	22,587
Origination of Loans Held For Sale		—			25,866			—		25,866
Reclassification from Loans Receivable to Loans Held for Sale		17,076			20,405			—		37,481
Reclassification from Loans Receivable to Other Real Estate Owned		(360	)		—			—		(360	)
Sales of Loans Held for Sale		(16,794	)		(11,903	)		—		(28,697	)
Principal Payoffs and Amortization		(111	)		(116	)		—		(227	)
Valuation Adjustments		—			(657	)		—		(657	)

Balance at End of Period	$	10,879		$	45,114		$	—	$	55,993

Allowance for Loan Losses and Allowance for Off-Balance Sheet Items

Activity in the allowance for loan losses and allowance for off-balance sheet items was as follows for the periods indicated:


	As of and for the
	Three Months Ended
	March 31,			December 31,			March 31,
	2013			2012			2012
	(In Thousands)
Allowance for Loan Losses:
Balance at Beginning of Period	$	63,305		$	66,107		$	89,936
Actual Charge-Offs		(3,024	)		(3,966	)		(12,321	)
Recoveries on Loans Previously Charged Off		714			757			1,037

Net Loan Charge-Offs		(2,310	)		(3,209	)		(11,284	)
Provision Charged to Operating Expense		196			407			2,400

Balance at End of Period	$	61,191		$	63,305		$	81,052

Allowance for Off-Balance Sheet Items:
Balance at Beginning of Period	$	1,824		$	2,231		$	2,981
Provision Charged to Operating Expense		(196	)		(407	)		(400	)

Balance at End of Period	$	1,628		$	1,824		$	2,581

Allowance for Loan Losses by Portfolio Segment

The following table details the information on the allowance for loan losses by portfolio segment for the three months ended March 31, 2013 and 2012:


	Real Estate			Commercial and Industrial			Consumer			Unallocated			Total
	(In Thousands)
March 31, 2013
Allowance for Loan Losses:
Beginning Balance	$	18,180		$	41,928		$	2,280		$	917		$	63,305
Charge-Offs		(213	)		(2,647	)		(164	)		—			(3,024	)
Recoveries on Loans Previously Charged Off		8			657			49			—			714
Provision		(143	)		(378	)		(370	)		1,087			196

Ending Balance	$	17,832		$	39,560		$	1,795		$	2,004		$	61,191

Ending Balance: Individually Evaluated for Impairment	$	95		$	4,388		$	401		$	—		$	4,884

Ending Balance: Collectively Evaluated for Impairment	$	17,737		$	35,172		$	1,394		$	2,004		$	56,307

Loans Receivable:
Ending Balance	$	925,754		$	1,160,752		$	35,180		$	—		$	2,121,686

Ending Balance: Individually Evaluated for Impairment	$	8,047		$	39,965		$	1,639		$	—		$	49,651

Ending Balance: Collectively Evaluated for Impairment	$	917,707		$	1,120,787		$	33,541		$	—		$	2,072,035

March 31, 2012
Allowance for Loan Losses:
Beginning Balance	$	19,637		$	66,005		$	2,243		$	2,051		$	89,936
Charge-Offs		(2,842	)		(9,115	)		(364	)		—			(12,321)
Recoveries on Loans Previously Charged Off		—			1,013			24			—			1,037
Provision		5,435			(3,265	)		341			(111	)		2,400

Ending Balance	$	22,230		$	54,638		$	2,244		$	1,940		$	81,052

Ending Balance: Individually Evaluated for Impairment	$	536		$	16,686		$	—		$	—		$	17,222

Ending Balance: Collectively Evaluated for Impairment	$	21,694		$	37,952		$	2,244		$	1,940		$	63,830

Loans Receivable:
Ending Balance	$	834,056		$	1,102,140		$	40,782		$	—		$	1,976,978

Ending Balance: Individually Evaluated for Impairment	$	16,395		$	50,960		$	402		$	—		$	67,757

Ending Balance: Collectively Evaluated for Impairment	$	817,661		$	1,051,180		$	40,380		$	—		$	1,909,221

Credit Quality of Loan Portfolio

Loans classified Loss will be charged off in a timely manner.


	Pass (Grade 0-4)		Criticized (Grade 5)		Classified (Grade 6-7)		Total Loans
	(In Thousands)
March 31, 2013
Real Estate Loans:
Commercial Property
Retail	$	395,952	$	3,946	$	3,304	$	403,202
Land		5,677		—		8,062		13,739
Other		401,291		12,070		717		414,078
Residential Property		92,735		—		2,000		94,735
Commercial and Industrial Loans:
Commercial Term
Unsecured		80,022		624		17,854		98,500
Secured By Real Estate		760,095		15,838		46,576		822,509
Commercial Lines of Credit		46,908		849		1,851		49,608
SBA Loans		146,389		1,115		11,183		158,687
International Loans		30,018		—		1,430		31,448
Consumer Loans		32,393		190		2,597		35,180

Total Gross Loans	$	1,991,480	$	34,632	$	95,574	$	2,121,686

December 31, 2012
Real Estate Loans:
Commercial Property
Retail	$	386,650	$	3,971	$	2,324	$	392,945
Land		5,491		—		8,516		14,007
Other		366,518		12,132		1,492		380,142
Residential Property		99,250		—		2,528		101,778
Commercial and Industrial Loans:
Commercial Term
Unsecured		87,370		663		22,139		110,172
Secured By Real Estate		710,723		13,038		50,431		774,192
Commercial Lines of Credit		53,391		863		1,867		56,121
SBA Loans		136,058		1,119		11,129		148,306
International Loans		34,221		—		—		34,221
Consumer Loans		33,707		201		2,768		36,676

Total Gross Loans	$	1,913,379	$	31,987	$	103,194	$	2,048,560

Analysis of Past Due Loans, Disaggregated by Loan Class

The following is an aging analysis of past due loans, disaggregated by loan class, as of March 31, 2013 and December 31, 2012:


	30-59 Days Past Due		60-89 Days Past Due		90 Days or More Past Due		Total Past Due		Current		Total Loans		Accruing 90 Days or More Past Due
	(In Thousands)
March 31, 2013
Real Estate Loans:
Commercial Property
Retail	$	2,004	$	—	$	—	$	2,004	$	401,198	$	403,202	$	—
Land		—		—		—		—		13,739		13,739		—
Other		—		—		—		—		414,078		414,078		—
Construction		—		—		—		—		—		—		—
Residential Property		222		—		819		1,041		93,694		94,735		—
Commercial and Industrial Loans:
Commercial Term
Unsecured		1,005		724		1,470		3,199		95,301		98,500		—
Secured By Real Estate		—		122		926		1,048		821,461		822,509		—
Commercial Lines of Credit		238		—		604		842		48,766		49,608		—
SBA Loans		4,158		1,205		4,006		9,369		149,318		158,687		—
International Loans		—		—		—		—		31,448		31,448		—
Consumer Loans		307		16		571		894		34,286		35,180		—

Total Gross Loans	$	7,934	$	2,067	$	8,396	$	18,397	$	2,103,289	$	2,121,686	$	—

December 31, 2012
Real Estate Loans:
Commercial Property
Retail	$	—	$	111	$	—	$	111	$	392,834	$	392,945	$	—
Land		—		—		335		335		13,672		14,007		—
Other		—		—		—		—		380,142		380,142		—
Construction		—		—		—		—		—		—		—
Residential Property		—		588		311		899		100,879		101,778		—
Commercial and Industrial Loans:
Commercial Term
Unsecured		918		1,103		1,279		3,300		106,872		110,172		—
Secured By Real Estate		1,949		—		926		2,875		771,317		774,192		—
Commercial Lines of Credit		—		188		416		604		55,517		56,121		—
SBA Loans		3,759		1,039		2,800		7,598		140,708		148,306		—
International Loans		—		—		—		—		34,221		34,221		—
Consumer Loans		61		146		538		745		35,931		36,676		—

Total Gross Loans	$	6,687	$	3,175	$	6,605	$	16,467	$	2,032,093	$	2,048,560	$	—

Information on Impaired Loans, Disaggregated by Loan Class

The following table provides information on impaired loans, disaggregated by loan class, as of the dates indicated:


	Recorded Investment		Unpaid Principal Balance		With No Related Allowance Recorded		With an Allowance Recorded		Related Allowance		Average Recorded Investment		Interest Income Recognized
	(In Thousands)
March 31, 2013
Real Estate Loans:
Commercial Property
Retail	$	2,785	$	2,838	$	1,835	$	950	$	42	$	2,796	$	26
Land		1,687		1,937		1,687		—		—		1,712		40
Other		526		526		—		526		53		527		4
Construction		—		—		—		—		—		—		—
Residential Property		3,049		3,104		3,049		—		—		3,059		27
Commercial and Industrial Loans:
Commercial Term
Unsecured		13,064		14,006		4,206		8,858		3,328		13,254		186
Secured By Real Estate		17,449		18,592		15,575		1,874		425		17,513		313
Commercial Lines of Credit		1,505		1,702		1,505		—		—		1,512		15
SBA Loans		6,517		10,101		4,766		1,750		578		6,473		273
International Loans		1,430		1,430		859		572		57		1,498		—
Consumer Loans		1,639		1,710		391		1,248		401		1,643		12

Total Gross Loans	$	49,651	$	55,946	$	33,873	$	15,778	$	4,884	$	49,987	$	896

December 31, 2012
Real Estate Loans:
Commercial Property
Retail	$	2,930	$	3,024	$	2,930	$	—	$	—	$	2,357	$	136
Land		2,097		2,307		2,097		—		—		2,140		179
Other		527		527		—		527		67		835		43
Construction		—		—		—		—		—		6,012		207
Residential Property		3,265		3,308		1,866		1,399		94		3,268		164
Commercial and Industrial Loans:
Commercial Term
Unsecured		14,532		15,515		6,826		7,706		2,144		14,160		821
Secured By Real Estate		22,050		23,221		9,520		12,530		2,319		21,894		1,723
Commercial Lines of Credit		1,521		1,704		848		673		230		1,688		64
SBA Loans		6,170		10,244		4,294		1,876		762		7,173		1,131
International Loans		—		—		—		—		—		—		—
Consumer Loans		1,652		1,711		449		1,203		615		1,205		73

Total Gross Loans	$	54,744	$	61,561	$	28,830	$	25,914	$	6,231	$	60,732	$	4,541

Summary of Interest Foregone on Impaired Loans

The following is a summary of interest foregone on impaired loans for the periods indicated:


	Three Months Ended,
	March 31,			March 31,
	2013			2012
	(In Thousands)
Interest Income That Would Have Been Recognized Had Impaired Loans
Performed in Accordance With Their Original Terms	$	1,068		$	1,428
Less: Interest Income Recognized on Impaired Loans		(896	)		(1,106	)

Interest Foregone on Impaired Loans	$	172		$	322

Non-Accrual Loans, Disaggregated by Loan Class

The following table details non-accrual loans, disaggregated by loan class, for the periods indicated:


	March 31,		December 31,
	2013		2012
	(In Thousands)
Real Estate Loans:
Commercial Property
Retail	$	950	$	1,079
Land		1,687		2,097
Other		—		—
Construction		—		—
Residential Property		1,638		1,270
Commercial and Industrial Loans:
Commercial Term
Unsecured		7,253		8,311
Secured By Real Estate		6,353		8,679
Commercial Lines of Credit		1,505		1,521
SBA Loans		11,852		12,563
International Loans		—		—
Consumer Loans		1,655		1,759

Total Non-Accrual Loans	$	32,893	$	37,279

Non-Performing Assets

The following table details non-performing assets as of the dates indicated:


	March 31,		December 31,
	2013		2012
	(In Thousands)
Non-Accrual Loans	$	32,893	$	37,279
Loans 90 Days or More Past Due and Still Accruing		—		—

Total Non-Performing Loans		32,893		37,279
Other Real Estate Owned		900		774

Total Non-Performing Assets	$	33,793	$	38,053

Troubled Debt Restructurings, Disaggregated by Type of Concession and by Loan Type

The following table details troubled debt restructurings, disaggregated by concession type and by loan type, as of March 31, 2013 and December 31, 2012:


	Non-Accrual TDRs										Accrual TDRs
	Deferral of Principal		Deferral of Principal and Interest		Reduction of Principal and Interest		Extension of Maturity		Total		Deferral of Principal		Deferral of Principal and Interest		Reduction of Principal and Interest		Extension of Maturity		Total
	(In Thousands)
March 31, 2013
Real Estate Loans:
Commercial Property
Retail	$	—	$	—	$	—	$	950	$	950	$	350	$	—	$	—	$	175	$	525
Other		—		—		—		—		—		526		—		—		—		526
Residential Property		819		—		—		—		819		—		—		—		—		—
Commercial and Industrial Loans:
Commercial Term
Unsecured		—		576		4,029		998		5,603		922		—		794		2,776		4,492
Secured By Real Estate		2,263		1,085		298		—		3,646		2,139		—		512		4,527		7,178
Commercial Lines of Credit		663		—		188		238		1,089		—		—		—		—		—
SBA Loans		2,865		1,237		781		—		4,883		453		—		80		—		533
International Loans		—		—		—		—		—		—		—		1,430		—		1,430

Total	$	6,610	$	2,898	$	5,296	$	2,186	$	16,990	$	4,390	$	—	$	2,816	$	7,478	$	14,684

December 31, 2012
Real Estate Loans:
Commercial Property
Retail	$	—	$	—	$	—	$	1,080	$	1,080	$	357	$	—	$	—	$	175	$	532
Other		—		—		—		—		—		527		—		—		—		527
Residential Property		827		—		—		—		827		—		572		—		—		572
Commercial and Industrial Loans:
Commercial Term
Unsecured		—		658		4,558		1,413		6,629		976		—		1,090		3,260		5,326
Secured By Real Estate		2,317		1,343		318		—		3,978		4,444		—		448		4,547		9,439
Commercial Lines of Credit		673		—		188		244		1,105		—				—		—		—
SBA Loans		2,831		1,287		1,032		—		5,150		484		—		100		—		584

Total	$	6,648	$	3,288	$	6,096	$	2,737	$	18,769	$	6,788	$	572	$	1,638	$	7,982	$	16,980

Troubled Debt Restructuring, Disaggregated by Loan Class

The following table details troubled debt restructuring, disaggregated by loan class, for the three months ended March 31, 2013 and 2012:


	March 31, 2013						March 31, 2012
	Number of Loans		Pre- Modification Outstanding Recorded Investment		Post- Modification Outstanding Recorded Investment		Number of Loans		Pre- Modification Outstanding Recorded Investment		Post- Modification Outstanding Recorded Investment
	(In Thousands)
Real Estate Loans:
Commercial Property
Retail ⁽¹⁾		—	$	—	$	—		1	$	102	$	102
Other ⁽²⁾		—		—		—		2		509		504
Commercial and Industrial Loans:
Commercial Term
Unsecured ⁽³⁾		1		197		198		20		3,615		3,537
Secured By Real Estate ⁽⁴⁾		—		—		—		2		1,813		1,801
SBA Loans ⁽⁵⁾		1		8		7		6		472		455
International Loans ⁽⁶⁾		2		1,584		1,430		—		—		—

Total		4	$	1,789	$	1,635		31	$	6,511	$	6,399

(1)

Includes a modification of $102,000 through an extension of maturity for the three months ended March 31, 2012.

(2)

Includes modifications of $504,000 through extensions of maturity for the three months ended March 31, 2012.

(3)

Includes a modification of $198,000 through an extension of maturity for the three months ended March 31, 2013, and modifications of $1.6 million through reductions of principal or accrued interest and $1.9 million through extensions of maturity for the three months ended March 31, 2012.

(4)

Includes modifications of $1.3 million through a reduction of principal or accrued interest and $501,000 through an extension of maturity for the three months ended March 31, 2012.

(5)

Includes a modification of $7,000 through a payment deferral for the three months ended March 31, 2013, and modifications of 133,000 through payment deferrals and $322,000 through reductions of principal or accrued interest for the three months ended March 31, 2012.

(6)

Includes modifications of $1.4 million through reductions of principal or accrued interest for the three months ended March 31, 2013.

Troubled Debt Restructurings that Defaulted Subsequent to Modifications Occurring Within Previous Twelve Months, Disaggregated by Loan Class

The following table details troubled debt restructurings that defaulted subsequent to the modifications occurring within the previous twelve months, disaggregated by loan class, for the three months ended March 31, 2013 and 2012:


	Three Months Ended
	March 31, 2013				March 31, 2012
	Number of Loans		Recorded Investment		Number of Loans		Recorded Investment
	(In Thousands)
Real Estate Loans:
Commercial Property
Retail		—	$	—		1	$	102
Other		—		—		1		279
Residential Property		—		—		1		865
Commercial and Industrial Loans:
Commercial Term
Unsecured		7		730		10		3,401
Secured By Real Estate		1		1,306		—		—
Commercial Lines of Credit		1		188		—		—
SBA Loans		1		32		10		848

Total		10	$	2,256		23	$	5,495

Changes in Servicing Assets

The changes in servicing assets were as follows for the three months ended March 31, 2013 and 2012:


	March 31,			March 31,
	2013			2012
	(In Thousands)
Balance at Beginning of Period	$	5,542		$	3,720
Additions		791			—
Amortization		(329	)		(205	)

Balance at End of Period	$	6,004		$	3,515