10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Fiscal Year Ended December 31, 2023

or

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Transition Period From To

Commission File Number: 000-30421

HANMI FINANCIAL CORPORATION

(Exact Name of Registrant as Specified in its Charter)

Delaware	95-4788120
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification No.)
900 Wilshire Boulevard, Suite 1250 Los Angeles, California	90017
(Address of Principal Executive Offices)	(Zip Code)

(213) 382-2200

(Registrant’s Telephone Number, Including Area Code)

Securities Registered Pursuant to Section 12(b) of the Act:

Title of Each Class	Trading Symbol	Name of Each Exchange on Which Registered
Common Stock, $0.001 Par Value	HAFC	Nasdaq Global Select Market

Securities Registered Pursuant to Section 12(g) of the Act:

None

(Title of Class)

Indicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒

Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer	☐	Accelerated Filer	☒
Non-Accelerated Filer	☐	Smaller Reporting Company	☐
Emerging Growth Company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the Registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to § 240.10D-1(b). ☐

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒

As of June 30, 2023, the aggregate market value of the common stock held by non-affiliates of the Registrant was approximately $447,656,208. For purposes of the foregoing calculation only, in addition to affiliated companies, all directors and officers of the Registrant have been deemed affiliates.

Number of shares of common stock of the Registrant outstanding as of February 21, 2024 was 30,267,113 shares.

Documents Incorporated By Reference Herein: Sections of the Registrant’s Definitive Proxy Statement for its 2024 Annual Meeting of Stockholders, which will be filed within 120 days of the fiscal year ended December 31, 2023, are incorporated by reference into Part III of this report (or information will be provided by amendment to this Form 10-K), as noted therein.

Hanmi Financial Corporation

Annual Report on Form 10-K for the Fiscal Year ended December 31, 2023

Table of Contents

Cautionary Note Regarding Forward-Looking Statements		2
Part I
Item 1.	Business	3
Item 1A.	Risk Factors	16
Item 1B.	Unresolved Staff Comments	25
Item 1C.	Cybersecurity	25
Item 2.	Properties	27
Item 3.	Legal Proceedings	27
Item 4.	Mine Safety Disclosures	27
Part II
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	28
Item 6.	[RESERVED]	29
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	30
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	46
Item 8.	Financial Statements and Supplementary Data	47
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	47
Item 9A.	Controls and Procedures	47
Item 9B.	Other Information	48
Item 9C.	Disclosure Regarding Foreign Jurisdictions that Prevent Inspections	48
Part III
Item 10.	Directors, Executive Officers and Corporate Governance	49
Item 11.	Executive Compensation	49
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	49
Item 13.	Certain Relationships and Related Transactions, and Director Independence	49
Item 14.	Principal Accounting Fees and Services	49
Part IV
Item 15.	Exhibits and Financial Statement Schedules	50
Item 16.	Form 10-K Summary	50
	Index to Consolidated Financial Statements	51
	Report of Independent Registered Public Accounting Firm	52
	Consolidated Balance Sheets as of December 31, 2023 and 2022	55
	Consolidated Statements of Income for the Years Ended December 31, 2023, 2022 and 2021	56
	Consolidated Statements of Comprehensive Income for the Years Ended December 31, 2023, 2022 and 2021	57
	Consolidated Statements of Changes in Stockholders’ Equity for the Years Ended December 31, 2023, 2022 and 2021	58
	Consolidated Statements of Cash Flows for the Years Ended December 31, 2023, 2022 and 2021	59
	Notes to Consolidated Financial Statements	60
Exhibit Index		105
Signatures		108

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Cautionary Note Regarding Forward-Looking Statements

Some of the statements contained in this Annual Report on Form 10-K (this “Report”) are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). All statements in this Report other than statements of historical fact are “forward–looking statements” for purposes of federal and state securities laws, including, but not limited to, statements about anticipated future operating and financial performance, financial position and liquidity, business strategies, regulatory and competitive outlook, investment and expenditure plans, capital and financing needs and availability, plans and objectives of management for future operations, developments regarding our capital and strategic plans and other similar forecasts and statements of expectations and assumptions underlying any of the foregoing. In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “should,” “could,” “expects,” “plans,” “intends,” “anticipates,” “believes,” “estimates,” “predicts,” “potential,” or “continue,” or the negative of such terms and other comparable terminology. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements.

These forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance, strategies, outlook, needs, plans, objectives or achievements to differ from those expressed or implied by the forward-looking statements. These factors include: failure to maintain adequate levels of capital and liquidity to support our operations; changes in liquidity, including the size and composition of the Hanmi Bank’s deposit portfolio, including the percentage of uninsured deposits in the portfolio; general economic and business conditions internationally, nationally and in those areas in which we operate, including risks associated with a potential return of recessionary conditions; volatility and deterioration in the credit and equity markets; changes in consumer spending, borrowing and savings habits; availability of capital; demographic changes; competition for loans and deposits and failure to attract or retain loans and deposits; fluctuations in interest rates and a decline in the level of our interest rate spread or net interest margin; our ability to enter into new markets and successfully capitalize on growth opportunities; risks associated with natural disasters; disruption due to a pandemic or other public health emergency; a failure in or breach of our operational or security systems or infrastructure, including cyber-attacks; the failure to maintain current technologies; the inability to successfully implement future information technology enhancements; difficult business and economic conditions that can adversely affect our industry and business, including competition, fraudulent activity and negative publicity; the current or anticipated impact of military conflict, terrorism or other geopolitical events; risks associated with Small Business Administration (“SBA”) loans; the continuing impact of the COVID-19 pandemic on our business and results of operation; failure to attract or retain key employees; our ability to access cost-effective funding; fluctuations in real estate values; changes in accounting policies and practices; changes in governmental regulation, including, but not limited to, any increase in Federal Deposit Insurance Corporation (the “FDIC”) insurance premiums; monetary and fiscal policies of the U.S. government, including policies of the U.S. Treasury and the Board of Governors of the Federal Reserve System; the ability of Hanmi Bank to make distributions to Hanmi Financial Corporation, which is restricted by certain factors, including Hanmi Bank’s retained earnings, net income, prior distributions made, and certain other financial tests; the adequacy of our allowance for credit losses (“ACL”); credit quality and the effect of credit quality on our credit loss expense and allowance for credit losses; changes in the financial performance and/or condition of our borrowers and the ability of our borrowers to perform under the terms of their loans and other terms of credit agreements; our ability to control expenses; risks as it relates to cybersecurity against our information technology and those of our third-party providers and vendors; changes in securities markets and inflation, which may lead to higher operating costs and reduced loan demand. For additional information concerning risks we face, see “Item 1A. Risk Factors” in Part I of this Report.

We undertake no obligation to update these forward-looking statements to reflect events or circumstances that occur after the date on which such statements were made, except as required by law.

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Part I

Item 1. Business

General

Hanmi Financial Corporation (“Hanmi Financial,” the “Company,” “we,” “us” or “our”) is a Delaware corporation incorporated on March 14, 2000 to be the holding company for Hanmi Bank (the “Bank”) and is subject to the Bank Holding Company Act of 1956, as amended (the “BHCA”). Our principal office is located at 900 Wilshire Boulevard, Suite 1250, Los Angeles, California 90017, and our telephone number is (213) 382-2200.

Hanmi Bank, the primary subsidiary of Hanmi Financial, is a state-chartered bank incorporated under the laws of the State of California on August 24, 1981, and licensed pursuant to the California Financial Code (“California Financial Code”). The Bank’s deposit accounts are insured under the Federal Deposit Insurance Act up to applicable limits thereof. The California Department of Financial Protection and Innovation (the “DFPI”) is the Bank’s primary state bank regulator and the FDIC is its primary federal regulator. The Bank’s headquarters are located at 3660 Wilshire Boulevard, Penthouse Suite A, Los Angeles, California 90010.

The Bank is a community bank conducting general business banking, with its primary market encompassing the Korean-American community and other multi-ethnic communities across California, Colorado, Georgia, Illinois, New Jersey, New York, Texas, Virginia and Washington. The Bank’s full-service offices are located in markets where many of the businesses are owned by immigrants and other minority groups. The Bank’s client base reflects the multi-ethnic composition of these communities.

The Bank’s revenues are derived primarily from interest and fees on loans, interest and dividends on the securities portfolio, service charges on deposit accounts and sales of SBA loans.

A summary of revenues for the periods indicated follows:

	Year Ended December 31,
	2023					2022				2021
	(dollars in thousands)
Interest and fees on loans receivable	$	339,811		84.3	%	$	257,878	83.8	%	$	208,602		81.1	%
Interest and dividends on securities		18,167		4.5			13,375	4.3			7,171		2.8
Other interest income		11,350		2.8			2,560	0.8			902		0.4
Service charges, fees and other income		30,349		7.5			24,722	8.0			23,729		9.2
Gain on sale of SBA loans		5,701		1.4			9,478	3.1			17,266		6.7
Subtotal		405,378		100.5			308,013	100.0			257,670		100.2
Net gain (loss) on sale of securities		(1,871	)	(0.5	)		—	—			(499	)	(0.2	)
Total revenues	$	403,507		100.0	%	$	308,013	100.0	%	$	257,171		100.0	%

Market Area

The Bank historically has provided its banking services through its branch network to a wide variety of small- to medium-sized businesses. Throughout the Bank’s service areas, competition is intense for both loans and deposits. While the market for banking services is dominated by a few nationwide banks with many offices operating over wide geographic areas, the Bank’s primary competitors are other community banks that focus their marketing efforts on Korean-American and other multi-ethnic businesses in the Bank’s service areas.

Lending Activities

The Bank originates loans for its own portfolio and for sale in the secondary market. Lending activities include real estate loans (commercial property, construction and residential property), commercial and industrial loans (commercial term, commercial lines of credit and international), equipment lease financing and SBA loans.

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Real Estate Loans

Real estate lending involves risks associated with the potential declines in the value of the underlying real estate collateral and the cash flows from income-producing properties. Declines in real estate values and cash flows can be caused by a number of factors, including a decline in general economic conditions, rising interest rates, inflation, changes in tax and other laws and regulations affecting the holding of real estate, environmental conditions, governmental and other use restrictions, development of competitive properties and increasing vacancy rates. When real estate values decline, the Bank’s real estate dependence increases the risk of loss both in the Bank’s loan portfolio and the Bank’s holdings of other real estate owned (“OREO”), which are the result of foreclosures on real property due to default by borrowers who use the property as collateral for loans. OREO properties are categorized as real property that is owned by the Bank but which is not directly related to the Bank’s business.

Commercial Property

The Bank offers commercial real estate loans, which are usually collateralized by first deeds of trust. The Bank obtains formal appraisals in accordance with applicable regulations to support the value of the real estate collateral. All appraisal reports on commercial mortgage loans are reviewed by either an independent third-party qualified reviewer, or an appraisal review officer. The review generally covers an examination of the appraiser’s assumptions and methods, as well as compliance with the Uniform Standards of Professional Appraisal Practice (the “USPAP”). The Bank determines creditworthiness of a borrower by evaluating cash flows, asset and debt structure, as well as credit history. The purpose of the loan is also an important consideration that dictates loan structure and the credit decision.

The Bank’s commercial real estate loans are principally secured by investor-owned or owner-occupied commercial and industrial buildings. Generally, these types of loans are made with a maturity date of up to seven years, with longer amortization periods. Typically, the Bank’s commercial real estate loans have a debt-coverage ratio at time of origination of 1.25 or more and a loan-to-value ratio of 70% or less. The Bank offers fixed-rate commercial real estate loans, including hybrid-fixed rate loans that are fixed for five years and then convert to adjustable rate loans for the remaining term. In addition, the Bank originates loans with an adjustable rate of interest indexed to the prime rate appearing in The Wall Street Journal (the “WSJ Prime Rate”) or Secured Overnight Financing Rate (“SOFR”). Amortization schedules for commercial real estate loans generally do not exceed 25 years.

Payments on loans secured by investor-owned and owner-occupied properties are often dependent upon successful operation or management of the properties. Repayment of such loans may be subject to the risk from adverse conditions in the real estate market or the economy. The Bank seeks to minimize these risks in a variety of ways, including limiting the size of such loans in relation to the market value of the property and strictly scrutinizing the property securing the loan. At the time of loan origination, a sensitivity analysis is performed for potential increases in vacancy and interest rates. Additionally, an annual risk assessment is also performed for the commercial real estate secured loan portfolio, which involves evaluating recent industry trends. When possible, the Bank also obtains corporate or individual guarantees. Representatives of the Bank conduct site visits of most commercial properties securing the Bank’s real estate loans before the loans are approved.

The Bank generally requires the borrower to provide, at least annually, current cash flow information in order for the Bank to re-assess the debt-coverage ratio. In addition, the Bank requires title insurance to ensure the status of its lien on real estate secured loans when a trust deed on the real estate is taken as collateral. The Bank also requires the borrower to maintain fire insurance, extended coverage casualty insurance and, if the property is in a flood zone, flood insurance, in an amount equal to the outstanding loan balance, subject to applicable laws that may limit the amount of hazard insurance a lender can require to replace such improvements. We cannot assure that these procedures will protect against losses on loans secured by real property.

Construction

The Bank maintains a small construction portfolio for multifamily and commercial and industrial properties within its market areas. The future condition of the local economy could negatively affect the collateral values of such loans. The Bank’s construction loans typically have the following structure:

•maturities of two years or less;

•a floating rate of interest based on the WSJ Prime Rate or the Bank Prime Rate;

•minimum cash equity consistent with high volatility commercial real estate guidelines;

•third-party fund control monitoring;

•a reserve of anticipated interest costs during construction or an advance of fees;

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•a first lien position on the underlying real estate;

•advance rates at time of origination that do not exceed the lesser of 75% of the value of the property or costs of construction; and

•recourse against a guarantor in the event of default.

On a case-by-case basis, the Bank originates permanent loans on the commercial property under loan conditions that require strong project stability and debt service coverage. Construction loans involve additional risks compared to loans secured by existing improved real property. Such risks include:

•the uncertain value of the project prior to completion;

•the uncertainty in estimating construction costs;

•construction delays and cost overruns;

•possible difficulties encountered in connection with municipal, state or other governmental ordinances or regulations during construction; and

•the difficulty in accurately evaluating the market value of the completed project.

Because of these uncertainties, construction lending often involves the disbursement of substantial funds where repayment of the loan is dependent on the success of the final project rather than the ability of the borrower or guarantor to repay principal and interest on the loan. If the Bank is forced to foreclose on a construction project prior to, or at completion, due to a default under the terms of a loan, there can be no assurance that the Bank will be able to recover all of the unpaid balance of, or accrued interest on, the loan as well as the related foreclosure and holding costs. In addition, the Bank may be required to fund additional amounts in order to complete a pending construction project and may have to hold the property for an indeterminable period of time. The Bank has underwriting procedures designed to identify factors that it believes to maintain acceptable levels of risk in construction lending, including, among other procedures, engaging qualified and bonded third parties to provide progress reports and recommendations for construction loan disbursements. No assurance can be given that these procedures will prevent losses arising from the risks associated with construction loans described above.

Residential Property

The Bank purchases and originates fixed-rate and variable-rate mortgage loans secured by one- to four-family properties with amortization schedules of 15 to 30 years and maturity schedules of up to 30 years. The loan fees, interest rates and other provisions of the Bank’s residential loans are determined by an analysis of the Bank’s cost of funds, cost of origination, cost of servicing, risk factors and portfolio needs.

Commercial and Industrial Loans

The Bank offers commercial loans for intermediate and short-term credit. Commercial loans may be unsecured, partially secured or fully secured with maturity schedules that range from 12 to 84 months. The Bank finances primarily small- and middle-market businesses in a wide spectrum of industries. Commercial and industrial loans consist of credit lines for operating needs, loans for equipment purchases and working capital, and various other business purposes. The Bank requires credit underwriting before considering any extension of credit.

Commercial lending entails significant risks. Commercial loans typically involve larger loan balances, are generally dependent on the cash flows of the business and may be subject to adverse conditions in the general economy or in a specific industry. Short-term business loans are customarily intended to finance current operations and typically provide for principal payment at maturity, with interest payable monthly. Term loans typically provide for floating interest rates, with monthly payments of both principal and interest.

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In general, it is the intent of the Bank to take collateral whenever possible, regardless of the loan purpose(s). Collateral may include, but is not limited to, liens on inventory, accounts receivable, fixtures and equipment, leasehold improvements and real estate. Where real estate is the primary collateral, the Bank obtains formal appraisals in accordance with applicable regulations to support the value of the real estate collateral. Typically, the Bank requires all principals and significant stockholders of a business to be guarantors on all loan instruments. All borrowers must demonstrate the ability to service and repay not only their obligations to the Bank, but also any and all outstanding business debt, without liquidating the collateral, based on historical earnings or reliable projections.

Commercial Term

The Bank offers term loans for a variety of needs, including loans for purchases of equipment, machinery or inventory, business acquisitions, tenant improvements, and refinancing of existing business-related debts. These loans have repayment terms of up to seven years.

Commercial Lines of Credit

The Bank offers lines of credit for a variety of short-term needs, including lines of credit for working capital, accounts receivable and inventory financing, and other purposes related to business operations. Commercial lines of credit usually have a term of 12 months.

International

The Bank offers a variety of international finance and trade services and products, including letters of credit, import financing (trust receipt financing and bankers’ acceptances) and export financing. Although most of our trade finance activities are related to trade with Asian countries, all of our loans are made to companies domiciled in the United States, and a substantial portion of those borrowers are California-based businesses engaged in import and export activities.

Equipment Financing Agreements

Equipment financing agreements have terms ranging from one to seven years. Commercial equipment financing agreements are secured by the business assets being financed. The Bank generally obtains a personal guaranty of the owner(s) of the business. Equipment financing agreements are similar to commercial business loans in that the financing agreements are typically made on the basis of the borrower’s ability to make repayment from the cash flows of the borrower’s business. As a result, the availability of funds for the repayment of commercial equipment financing agreements may be substantially dependent on the success of the business itself, which in turn, is often dependent in part upon general economic conditions.

SBA Loans

The Bank originates loans that are guaranteed by the SBA, an independent agency of the federal government. SBA loans are offered for business purposes such as owner-occupied commercial real estate, business acquisitions, start-ups, franchise financing, working capital, improvements and renovations, inventory and equipment, and debt-refinancing. SBA loans offer lower down payments and longer-term financing, which helps small business that are starting out, or about to expand. The guarantees on SBA loans and SBA express loans are generally 75% and 50% of the principal amount of the loan, respectively. The Bank typically requires that SBA loans be secured by business assets and by a first or second deed of trust on any available real property. When the SBA loan is secured by a first deed of trust on real property, the Bank obtains appraisals in accordance with applicable regulations. SBA loans have terms ranging from five to 25 years depending on the use of the proceeds. To qualify for a SBA loan, a borrower must demonstrate the capacity to service and repay the loan, without liquidating the collateral, based on historical earnings or reliable projections.

The Bank normally sells to unrelated third parties a substantial amount of the guaranteed portion of the SBA loans that it originates. When the Bank sells a SBA loan, it has an option to repurchase the loan if the loan defaults. If the Bank repurchases a defaulted loan, the Bank will make a demand for the guaranteed portion to the SBA. Even after the sale of an SBA loan, the Bank retains the right to service the SBA loan and to receive servicing fees. The unsold portions of the SBA loans that remain owned by the Bank are included in loans receivable on the Consolidated Balance Sheets. As of December 31, 2023, the Bank had $12.0 million of SBA loans held for sale and $176.9 million of SBA loans in its loan portfolio, and was servicing $539.6 million of SBA loans sold to investors.

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Off-Balance Sheet Commitments

As part of the suite of services available to its small- to medium-sized business customers, the Bank from time to time issues formal commitments and lines of credit. These commitments can be either secured or unsecured. They may be revolving lines of credit for seasonal working capital needs, commercial letters of credit or standby letters of credit. Commercial letters of credit facilitate import trade. Standby letters of credit are conditional commitments issued by the Bank to guarantee the performance of a customer to a third party.

Lending Procedures and Lending Limits

Individual lending authority is granted to the Chief Credit Officer and certain additional designated officers. Loans for which direct and indirect borrower liability exceeds an individual’s lending authority are referred to the Bank’s Management Credit Committee.

Legal lending limits are calculated in conformance with the California Financial Code, which prohibits a bank from lending to any one individual, entity or its related interests on an unsecured basis any amount that exceeds 15% of the sum of such bank’s stockholders’ equity plus the allowance for credit losses, capital notes and any debentures, or 25% on a secured and unsecured basis. At December 31, 2023, the Bank’s authorized legal lending limits for loans to one borrower was $139.8 million for unsecured loans and an additional $93.2 million for secured and unsecured loans combined.

The Bank seeks to mitigate the risks inherent in its loan portfolio by adhering to strict underwriting practices. The review of each loan application includes analysis of the applicant’s business, experience, prior credit history, income level, cash flows, financial condition, tax returns, cash flow projections, and the value of any collateral to secure the loan, based upon reports of independent appraisers and/or audits of accounts receivable or inventory pledged as security. In the case of real estate loans over a specified threshold, the review of collateral value includes an appraisal report prepared by an independent Bank-approved appraiser. All appraisal reports on commercial real property secured loans are either reviewed by an independent third-party qualified reviewer, or by an appraisal review officer. The review generally covers an examination of the appraiser’s assumptions and methods, as well as compliance with the USPAP.

Allowance for Credit Losses, Allowance for Credit Losses Related to Off-Balance Sheet Items and Provision for Credit Losses

The Bank maintains an allowance for credit losses at an appropriate level considered by management to be adequate to cover the current expected credit losses associated with its loan portfolio under prevailing and forecasted economic conditions. In addition, the Bank maintains an allowance for credit losses related to off-balance sheet items associated with unfunded commitments, which is included in other liabilities on the Consolidated Balance Sheets.

The Bank assesses its allowance for credit losses for adequacy on a quarterly basis and more frequently as needed. The DFPI and the FDIC may require the Bank to recognize additions to the allowance for credit losses through a provision for credit losses based upon their assessment of the information available to them at the time of their examinations.

Deposits

The Bank offers a traditional array of deposit products, including noninterest-bearing checking accounts, negotiable order of withdrawal (“NOW”) accounts, savings accounts, money market accounts, and certificates of deposit. These accounts, except for noninterest-bearing checking accounts, earn interest at rates established by management based on competitive market factors and management’s desire to increase certain types or maturities of deposit liabilities. Our approach is to tailor products and bundle those that meet the customer’s needs. This approach is designed to add value for the customer, increase products per household, and produce higher service fee income.

Available Information

We file reports with the U.S. Securities and Exchange Commission (the “SEC”), including our Proxy Statements, Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and any amendments thereto. The SEC maintains a website at www.sec.gov, which contains the reports, proxy and information statements and other information we file with the SEC.

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We also maintain an Internet website at www.hanmi.com. We make available free of charge through our website our Proxy Statements, Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and any amendments thereto, as soon as reasonably practicable after we file such reports with the SEC. We make our website content available for information purposes only. It should not be relied upon for investment purposes. None of the information contained in or hyperlinked from our website is incorporated into this Annual Report on Form 10-K.

Human Capital Resources

Our core values of Integrity, Transparency, Fairness and Collaboration are central to our belief that long-term shareholder value is derived by serving the best interests of all of our constituents. The success of our business is dependent on our dedicated employees, who not only strive to provide value to our customers but also provide invaluable support to the communities that we serve. We recognize that our employees are key to Hanmi’s success and we are committed to building a workplace that can attract and retain high-caliber talent.

(a) Our People

We strive to make Hanmi an inclusive, safe and healthy workplace, with opportunities for our employees to grow and develop in their careers. We recruit the best people for the job regardless of gender, ethnicity or other protected traits and it is our policy to fully comply with all laws applicable to discrimination in the workplace.

At December 31, 2023, the Company employed 615 individuals across our footprint, of which six were part-time. None of the employees are represented by a union or covered by a collective bargaining agreement. We believe that our employee relations are good and we have established a cross-functional Employee Engagement Committee with executive leadership to promote relationship building across the organization.

Employee retention helps us operate efficiently and offers continuity to our customers and the communities we serve. At December 31, 2023, 44% of our current staff had been with us for at least five years.

(b) Learning and Development

We have a robust learning and development program with broad offerings to help employees achieve their career goals. Through Hanmi Banking School, the Corporate Learning and Development Department offers a variety of programs to empower employees with the knowledge and skills they need to be successful and remain competitive. We offer in-house training led by instructors or through interactive online offerings to all employees. Employees can choose from core workshops focused on a single concept or job skill, leadership and professional development programming to develop our emerging leaders, and regulatory compliance training to ensure safe and sound banking practices. In addition to internal training, we offer a tuition reimbursement program where costs for certain relevant job training is offered to eligible employees.

Our 12-week Management Leadership Program, based on Franklin Covey’s critical practices, brings together mid-level managers to help our emerging leaders succeed. We also have partnerships with Bankers’ Compliance Group and California Bankers’ Association to provide timely and relevant webinars and training. In 2021, we launched the Hanmi Credit Trainee Program, which brings qualified talent with no prior banking experience into a 12-month program with internal and Moody’s Analytics training courses. Our goal is to train the next generation of bankers and continue to provide opportunities to develop talent in the communities we serve. In the summer of 2023, our second class of Credit Trainees graduated from this program and joined our full-time ranks. In the fall of 2023, we launched our third Credit Trainee Program focused on further developing internal credit staff with targeted courses from a third-party auditing and consulting firm.

(c) Diversity, Equity and Inclusion

Hanmi was founded 40 years ago to serve the underbanked, minority immigrant community in Los Angeles. Our corporate values reflect the importance of embracing diversity and equitable practices to ensure we are representative of the communities we serve. As of December 31, 2023:

•Women represented 68% of the Company’s workforce, and 62% of the Company’s managerial roles;

•Minorities represented 92% of the Company’s workforce, and 94% of the Company’s managerial roles.

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(d) Compensation and Benefits

As part of our compensation philosophy, we offer competitive salaries and employee benefits to attract and retain superior talent. Salary grades are informed by a third-party study of compensation in the community banking space. In addition to healthy base wages, we offer annual bonus opportunities, a company-matched 401(k) Plan, healthcare and insurance benefits, flexible spending accounts, wellness incentives, long-term disability, paid time off, and employee assistance program.

(e) Employee Health and Safety

We recognize that the success of our business is fundamentally connected to the well-being of our employees. We provide comprehensive benefits that support their physical and mental health by providing tools and resources to help them improve or maintain their health status; and that offer choice where possible so they can customize their benefits to meet their needs. We offer a comprehensive benefits package which includes paid sick and vacation leave; paid holidays; medical, dental, vision, life and disability insurance package for employees and dependents; various other voluntary benefit offerings, and optional retirement accounts.

In response to the pandemic, we had implemented significant operating environment changes that we determined were in the best interest of our employees, as well as the communities in which we operate. These efforts have continued through the resurgences and include continued safety measures for on-site employees, distribution of personal protective equipment, and flexible work arrangements (including remote working opportunities) for eligible employees to better support our workforce.

(f) Community Engagement

As a community bank, we are proud to work with our communities to build a stronger future for all of our stakeholders. Hanmi is committed to and has a long history of supporting the communities in which we live and work. Through employee engagement surveys, we have focused our community engagement and employee volunteer efforts in five areas: Youth, Education, Health, Senior, and Community Development. In 2023, our employees participated in over 1,400 hours of community service, participating in a variety of educational efforts such as financial literacy, financial education for seniors, affordable housing education, education for first-time homebuyers and working with various community non-profits.

Insurance

We maintain directors and officers, financial institution bond and commercial insurance at levels deemed adequate by management to protect Hanmi Financial from certain litigation and other losses.

Competition

The banking and financial services industry is highly competitive. The increasingly competitive environment faced by banks is primarily the result of changes in laws and regulation, changes in technology and product delivery systems, new competitors in the market, and the accelerating pace of consolidation among financial service providers. We compete for loans, deposits and customers with other commercial banks, savings institutions, securities and brokerage companies, mortgage companies, real estate investment trusts, insurance companies, finance companies, money market funds, credit unions, financial technology companies, and other non-bank financial service providers. Some of these competitors are larger in total assets and capitalization, have greater access to capital markets, including foreign-ownership, more extensive and established branch networks and/or offer a broader range of financial products and services, such as trust services, which the Bank does not provide.

Other institutions, including brokerage firms, credit card companies and retail establishments, offer banking services and products to consumers that are in direct competition with the Bank, including money market funds with check access and cash advances on credit card accounts. In addition, many non-bank competitors are not subject to the same extensive federal or state regulations that govern bank holding companies and federally insured banks.

The Bank’s direct competitors are community banks that focus their marketing efforts on Korean-American, Asian-American and immigrant-owned businesses, while offering the same or similar services and products as those offered by the Bank. These banks compete for loans and deposits primarily through the interest rates and fees they charge, and the convenience and quality of service they provide to customers.

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Economic, Legislative and Regulatory Developments

Future profitability, like that of most financial institutions, is primarily dependent on interest rate differentials and credit quality. In general, the difference between the interest rates paid by us on interest-bearing liabilities, such as deposits and other borrowings, and the interest rates received by us on our interest-earning assets, such as loans extended to our customers and securities held in our investment portfolio, will comprise the major portion of our earnings. These rates are highly sensitive to many factors that are beyond our control, such as inflation, recession and unemployment, and the impact that future changes in domestic and foreign economic conditions might have on us.

Our business is also influenced by the monetary and fiscal policies of the Board of Governors of the Federal Reserve System (the “Federal Reserve”), the federal government, and the policies of regulatory agencies, particularly the FDIC and the DFPI. The Federal Reserve implements national monetary policies (with objectives such as curbing inflation and combating recession) through its open-market operations in U.S. government securities, by adjusting the required level of reserves for depository institutions subject to its reserve requirements, and by varying the target federal funds and discount rates applicable to borrowings by depository institutions. The actions of the Federal Reserve in these areas influence the growth of bank loans, investments and deposits, and affect interest earned on interest-earning assets and interest paid on interest-bearing liabilities. The nature and impact on us of any future changes in monetary and fiscal policies cannot be predicted.

From time to time, federal and state legislation is enacted that may have the effect of materially increasing the cost of doing business, limiting or expanding permissible activities, or affecting the competitive balance between banks and other financial services providers, such as federal legislation permitting affiliations among commercial banks, insurance companies and securities firms. We cannot predict whether or when any potential legislation will be enacted, and if enacted, the effect that it, or any implementing regulations, would have on our financial condition or results of operations. In addition, the outcome of any investigations initiated by state authorities or litigation raising issues may result in necessary changes in our operations, additional regulation and increased compliance costs.

Regulation and Supervision

(a) General

The Company, which is a bank holding company, and the Bank, which is a California-chartered state nonmember bank, are subject to significant regulation and restrictions by federal and state laws and regulatory agencies. The applicable statutes and regulations, among other things, restrict activities and investments in which we may engage and our conduct of them, impose capital requirements with which we must comply, impose various reporting and information collecting obligations upon us, and subject us to comprehensive supervision and regulation by regulatory agencies. The federal and state banking statutes and regulations and the supervision, regulation and examination of banks and their parent companies by the regulatory agencies are intended primarily for the maintenance of the safety and soundness of banks and their depositors, the Deposit Insurance Fund (“DIF”) of the FDIC, and the financial system as a whole, rather than for the protection of stockholders or creditors of banks or their parent companies.

The following discussion of statutes and regulations is a summary and does not purport to be complete, nor does it address all applicable statutes and regulations. This discussion is qualified in its entirety by reference to the statutes and regulations referred to in this discussion. Banking statutes, regulations and policies are continuously under review by federal and state legislatures and regulatory agencies, and a change in them could have a material adverse effect on our business, such as materially increasing the cost of doing business, limiting or expanding permissible activities, or affecting the competitive balance between banks and other financial services providers.

We cannot predict whether or when other legislation or new regulations may be enacted, and if enacted, the effect that new legislation, or any implemented regulations and supervisory policies, would have on our financial condition and results of operations. Such developments may further alter the structure, regulation, and competitive relationship among financial institutions, and may subject us to increased regulation, disclosure, and reporting requirements.

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(b) Legislation and Regulatory Developments

Legislative and regulatory developments to date, as well as those that come in the future, have had, and are likely to continue to have, an impact on the conduct of our business. Additional legislation, changes in rules promulgated by federal and state bank regulators, or changes in the interpretation, implementation, or enforcement of existing laws and regulations, may directly affect the method of operation and profitability of our business. The profitability of our business may also be affected by laws and regulations that impact the business and financial sectors in general.

In the exercise of their supervisory and examination authority, the regulatory agencies have emphasized corporate governance, stress testing, enterprise risk management and other board responsibilities; anti-money laundering compliance and enhanced high-risk customer due diligence; vendor management; cybersecurity; and fair lending and other consumer compliance obligations.

(c) Capital Adequacy Requirements

Bank holding companies and banks are subject to various regulatory capital requirements administered by state and federal banking regulators. The current capital rules require banking organizations to maintain: (i) a minimum capital ratio of Common Equity Tier 1 to risk-weighted assets of 4.50%; (ii) a minimum capital ratio of Tier 1 capital to risk-weighted assets of 6.00%; (iii) a minimum capital ratio of total capital to risk-weighted assets of 8.00%; and (iv) a minimum leverage ratio of Tier 1 capital to adjusted average consolidated assets of 4.00%. In addition, the current capital rules require a capital conservation buffer of 2.50% above the minimum capital ratios. Banking organizations with capital ratios above the minimum capital ratio but below the capital conservation buffer will face limitation on the payment of dividends, common stock repurchases and discretionary cash payments to executive officers. The federal banking regulators may require banks and bank holding companies subject to enforcement actions to maintain capital ratios in excess of the minimum ratios otherwise required to be deemed well capitalized, in which case institutions may no longer be deemed to be well capitalized and may therefore be subject to restrictions on taking brokered deposits.

Capital adequacy requirements and, additionally for banks, prompt corrective action regulations (See “Prompt Corrective Action Provisions” below), involve quantitative measures of assets, liabilities, and certain off-balance sheet items calculated under regulatory accounting practices. Capital amounts and classifications are also subject to qualitative judgments by regulators about components, risk weighting, and other factors. The risk-based capital requirements for banking organizations require capital ratios that vary based on the perceived degree of risk associated with an organization’s operations for both transactions reported on the balance sheet as assets, such as loans, and those recorded as off-balance sheet items, such as commitments, letters of credit and recourse arrangements. The risk-based capital ratio is determined by classifying assets and certain off-balance sheet financial instruments into weighted categories, with higher levels of capital being required for those categories perceived as representing greater risks and dividing its qualifying capital by its total risk-adjusted assets and off-balance sheet items. Banking organizations engaged in significant trading activity may also be subject to the market risk capital guidelines and be required to incorporate additional market and interest rate risk components into their risk-based capital standards.

At December 31, 2023, the Company and the Bank’s total risk-based capital ratios were 14.95% and 14.27%, respectively; Tier 1 risk-based capital ratios were 12.20% and 13.26%, respectively; Common Equity Tier 1 capital ratios were 11.86% and 13.26%, respectively, and Tier 1 leverage capital ratios were 10.37% and 11.32%, respectively, all of which ratios exceeded the minimum percentage requirements for the Bank to be deemed “well-capitalized” and for the Company to meet and exceed all applicable capital ratio requirements for regulatory purposes. The Bank’s capital conservation buffer was 6.27% and 5.86%, and the Company’s capital conservation buffer was 6.20% and 5.71% as of December 31, 2023 and 2022, respectively. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations-Capital Resources.”

Management believes that, as of December 31, 2023, the Company and the Bank met all applicable capital requirements to which they were subject. Bank regulators may also continue their past policies of expecting banks to maintain additional capital beyond the new minimum requirements. The implementation of more stringent requirements to maintain higher levels of capital, or to maintain higher levels of liquid assets, could adversely impact the Company’s net income and return on equity, restrict the ability to pay dividends or executive bonuses, and require the raising of additional capital.

(d) Bank Holding Company Regulation

The Company is a bank holding company that is subject to comprehensive supervision, regulation, examination and enforcement by the Federal Reserve.

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Bank holding companies and their subsidiaries are subject to significant regulation and restrictions by Federal and State laws and regulatory agencies, which may affect the cost of doing business, and may limit permissible activities and expansion or impact the competitive balance between banks and other financial services providers. Federal and state banking laws and regulations, among other things:

•Require periodic reports and such additional reports of information as the Federal Reserve may require;

•Limit the scope of bank holding companies’ activities and investments;

•Require bank holding companies to meet or exceed certain levels of capital (See “Capital Adequacy Requirements” above);

•Require that bank holding companies serve as a source of financial and managerial strength to subsidiary banks and commit resources as necessary to support each subsidiary bank;

•Limit dividends payable to shareholders and restrict the ability of bank holding companies to obtain dividends or other distributions from their subsidiary banks. The Company’s ability to pay dividends on both its common and preferred stock is subject to legal and regulatory restrictions. Substantially all of the Company’s funds to pay dividends or to pay principal and interest on our debt obligations are derived from dividends paid by the Bank;

•Require a bank holding company to terminate an activity or terminate control of or liquidate or divest certain subsidiaries, affiliates or investments if the Federal Reserve believes the activity or the control of the subsidiary or affiliate constitutes a significant risk to the financial safety, soundness or stability of any bank subsidiary;

•Require the prior approval of senior executive officer or director changes and prohibit golden parachute payments, which are contingent upon termination, including change in control agreements, or new employment agreements with such payment terms, if an institution is in “troubled condition”;

•Regulate provisions of certain bank holding company debt, including the authority to impose interest ceilings and reserve requirements on such debt and require prior approval to purchase or redeem securities; and

•Require prior Federal Reserve approval to acquire substantially all the assets of a bank, to acquire more than 5.0% of a class of voting shares of a bank, or to merge with another bank holding company and consider certain competitive, management, financial, anti-money-laundering compliance, potential impact on U.S. financial stability or other factors in granting these approvals, in addition to similar California or other state banking agency approvals which may also be required.

Examinations are designed to inform the Federal Reserve of the financial condition and nature of the operations of the bank holding company and its subsidiaries and to monitor compliance with the BHCA and other laws affecting the operations of bank holding companies. To determine whether potential weaknesses in the condition or operations of bank holding companies might pose a risk to the safety and soundness of their subsidiary banks, examinations focus on whether a bank holding company has adequate systems and internal controls in place to manage the risks inherent in its business, including credit risk, interest rate risk, market risk, liquidity risk, operational risk, legal risk and reputation risk. Bank holding companies may be subject to potential enforcement actions by the Federal Reserve for unsafe or unsound practices in conducting their businesses or for violations of any law, regulation or any condition imposed in writing by the Federal Reserve. Enforcement actions may include the issuance of cease-and-desist orders, the imposition of civil money penalties, the requirement to meet and maintain specific capital levels for any capital measure, the issuance of directives to increase capital, formal and informal agreements, or removal and prohibition orders against officers or directors and other institution-affiliated parties. The Company is a bank holding company within the meaning of Section 3700 of the California Financial Code. Therefore, the Company and any of its subsidiaries are subject to examination by, and may be required to file reports with, the DFPI. The DFPI's approval may also be required for certain mergers and acquisitions.

(e) Bank Regulation

The Bank is a California state-chartered commercial bank whose deposits are insured by the FDIC. The FDIC is its primary federal bank regulator and the DFPI is the Bank’s primary state bank regulator. The Bank is subject to comprehensive supervision, regulation, examination and enforcement by the FDIC and the DFPI. Specific federal and state laws and regulations which are applicable to banks regulate, among other things, the scope of their business, their investments, their reserves against deposits, the timing of the availability of deposited funds, their activities relating to dividends, investments, loans, the nature and amount of and collateral for certain loans, servicing and foreclosing on loans, borrowings, capital requirements, certain check-clearing activities, branching, and mergers and acquisitions.

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Banks are also subject to restrictions on their ability to conduct transactions with affiliates and other related parties. The Federal Reserve's Regulation O imposes limitations on loans or extensions of credit to “insiders,” including officers, directors, and principal shareholders. Section 23A of the Federal Reserve Act and its implementing regulation, Regulation W impose quantitative limits, qualitative requirements, and collateral requirements on certain transactions with, or for the benefit of, its bank affiliates. Transactions covered by Section 23A and Regulation W generally include, among other things, loans, extensions of credit, investments in securities issued by an affiliate, and acquisitions of assets from an affiliate. Section 23B of the Federal Reserve Act and Regulation W require that most types of transactions by a bank with, or for the benefit of, an affiliate be on terms and under circumstances that are substantially the same, or at least as favorable to the bank as those prevailing for comparable transactions with unaffiliated parties. The Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank”) expanded definitions and restrictions on transactions with affiliates under Sections 23A and 23B, and also lending limits for derivative transactions, repurchase agreements, and securities lending and borrowing transactions.

Pursuant to the Federal Deposit Insurance Act (“FDI Act”) and the California Financial Code, California state-chartered commercial banks may generally engage in any activity permissible for national banks. Therefore, the Bank may form subsidiaries to engage in the activities commonly conducted by national banks in operating subsidiaries. Further, the Bank may conduct certain “financial” activities permitted under the Gramm-Leach-Bliley Act of 1999 in a “financial subsidiary” to the same extent as may a national bank, provided the Bank is and remains “well-capitalized,” “well-managed” and in satisfactory compliance with the Community Reinvestment Act (“CRA”). The Bank currently has no financial subsidiaries.

(f) Enforcement Authority

The federal and California regulatory structure gives the bank regulatory agencies extensive discretion in connection with their supervisory and enforcement activities and examination policies, including policies with respect to the classification of assets and the establishment of appropriate loan loss reserves for regulatory purposes. The regulatory agencies have adopted guidelines to assist in identifying and addressing potential safety and soundness concerns before an institution’s capital becomes impaired. The guidelines establish operational and managerial standards generally relating to: (1) internal controls, information systems and security, and internal audit systems; (2) loan documentation; (3) credit underwriting; (4) interest-rate exposure; (5) asset growth and asset quality; and (6) compensation, fees, and benefits. Further, the regulatory agencies have adopted safety and soundness guidelines for asset quality and for evaluating and monitoring earnings to ensure that earnings are sufficient for the maintenance of adequate capital and reserves. If, as a result of an examination, the DFPI or FDIC, as applicable, determines that the financial condition, capital resources, asset quality, earnings prospects, management, liquidity, or other aspects of the Bank’s operations are unsatisfactory or that the Bank or its management is violating or has violated any law or regulation or engaged in unsafe or unsound practices, the DFPI and the FDIC have residual authority to:

•Require affirmative action to correct any conditions resulting from any violation or practice;

•Direct an increase in capital and the maintenance of higher specific minimum capital ratios, which could preclude the Bank from being deemed well capitalized and restrict its ability to accept certain brokered deposits;

•Restrict the Bank’s growth geographically, by products and services, or by mergers and acquisitions, including bidding in FDIC receiverships for failed banks;

•Enter into or issue supervisory requirements or informal or formal enforcement actions, including required Board resolutions, Matters Requiring Board Attention, written agreements, prompt corrective action orders, and cease and desist orders requiring cessation of certain practices or the taking of corrective action;

•Require the sale of subsidiaries or assets;

•Limit dividend and distributions;

•Require prior approval of senior executive officer or director changes, or remove officers and directors;

•Assess civil monetary penalties; and

•Terminate FDIC insurance, revoke the charter and/or take possession of and close and liquidate the Bank or appoint the FDIC as receiver.

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(g) Deposit Insurance

The FDIC is an independent federal agency that insures deposits, up to prescribed statutory limits, of federally insured banks and savings institutions, and safeguards the safety and soundness of the banking and savings and loan industries. The FDIC insures our customer deposits through the DIF up to prescribed limits for each depositor. As a general matter, the maximum deposit insurance amount is $250,000 per depositor, per ownership category, per FDIC-insured bank. The amount of FDIC assessments paid by each DIF member institution is based on its relative risk of default as measured by FDIC modeling, based on regulatory capital and other financial ratios as well as supervisory factors. The FDIC may terminate a depository institution’s deposit insurance upon a finding that the institution’s financial condition is unsafe or unsound, or that the institution has engaged in unsafe or unsound practices that pose a risk to the DIF or that may prejudice the interest of the bank’s depositors. The termination of deposit insurance for a bank would also result in the revocation of the bank’s charter by the DFPI.

We are generally unable to control the amount of premiums that we are required to pay for FDIC insurance, which can be affected by the cost of bank failures to the FDIC among other factors. The FDIC adopted a final rule in October 2022 to increase initial base deposit insurance assessment rates by two basis points beginning in the first quarterly assessment period of 2023. As a result, effective January 1, 2023, assessment rates for institutions of the Bank’s size will range from 2.5 to 42 basis points. Any additional future increases in FDIC insurance premiums may have a material and adverse effect on our earnings and could have a material adverse effect on the value of, or market for, our common stock. Additionally, on November 29, 2023, the FDIC adopted a final rule to implement a special assessment to recover the loss to the DIF arising from the protection of uninsured depositors following the closures of two regional banks in the spring of 2023; the special assessment will only be paid by banking organizations with $5 billion or more in assets, effective through December 31, 2022 and will exclude the first $5 billion in estimated uninsured deposits. Thus, any banking organizations that reported $5 billion or less in estimated uninsured deposits as of December 31, 2022 would not be subject to the special assessment.

(h) Prompt Corrective Action Provisions

The FDI Act requires the federal bank regulatory agencies to take “prompt corrective action” with respect to a depository institution if that institution does not meet certain capital adequacy requirements, including requiring the prompt submission of an acceptable capital restoration plan. Depending on the bank’s capital ratios, the agencies’ regulations define five categories in which an insured depository institution will be placed: well-capitalized, adequately capitalized, undercapitalized, significantly undercapitalized, and critically undercapitalized. At each successive lower capital category, an insured bank is subject to more restrictions, including restrictions on the bank’s activities, operational practices or the ability to pay dividends. Based upon its capital levels, a bank that is classified as well-capitalized, adequately capitalized or undercapitalized may be treated as though it were in the next lower capital category if the appropriate federal banking agency, after notice and opportunity for hearing, determines that an unsafe or unsound condition, or an unsafe or unsound practice, warrants such treatment.

To be considered well-capitalized under the prompt corrective action standards, the Bank is required to maintain a Common Equity Tier 1 capital ratio of at least 6.50%, a Tier 1 risk-based capital ratio of at least 8.00%, a total risk-based capital ratio of at least 10.00%, and a Tier 1 leverage ratio of at least 5.00%.

(i) Dividends

The Company depends in part upon dividends received from the Bank to fund its activities, including the payment of dividends. The Company and the Bank are subject to various federal and state restrictions on their ability to pay dividends. It is the Federal Reserve’s policy that bank holding companies should generally pay dividends on common stock only out of income available over the past year, and only if prospective earnings retention is consistent with the organization’s expected future needs and financial condition. It is also the Federal Reserve’s policy that bank holding companies should not maintain dividend levels that undermine their ability to be a source of strength to its banking subsidiaries. The Federal Reserve also discourages dividend payment ratios that are at maximum allowable levels unless both asset quality and capital are very strong. In addition, the federal bank regulators are authorized to prohibit a bank or bank holding company from engaging in unsafe or unsound banking practices and, depending upon the circumstances, could find that paying a dividend or making a capital distribution would constitute an unsafe or unsound banking practice.

The Bank is a legal entity that is separate and distinct from its holding company. The Company is dependent on the performance of the Bank for funds which may be received as dividends from the Bank for use in the operation of the Company and for the ability of the Company to pay dividends to shareholders. Future cash dividends by the Bank will also depend upon management’s assessment of future capital requirements, contractual restrictions, and other factors. The current capital rules may restrict dividends by the Bank if the additional capital conservation buffer is not achieved.

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The power of the Board of Directors of the Bank to declare a cash dividend to the Company is subject to California law, which restricts the amount available for cash dividends to the lesser of a bank’s retained earnings or net income for its last three fiscal years (less any distributions to shareholders made during such period). Where the above test is not met, cash dividends may still be paid, with the prior approval of the DFPI, in an amount not exceeding the greatest of: (1) retained earnings of the bank; (2) the net income of the bank for its last fiscal year; or (3) the net income of the bank for its current fiscal year.

(j) Operations and Consumer Compliance Laws

The Bank must comply with numerous federal and state anti-money laundering and consumer protection statutes and implementing regulations, including the USA PATRIOT Act of 2001, the Bank Secrecy Act, the Foreign Account Tax Compliance Act, the CRA, the Fair Credit Reporting Act, as amended by the Fair and Accurate Credit Transactions Act, the Equal Credit Opportunity Act, the Truth in Lending Act, the Fair Housing Act, the Home Mortgage Disclosure Act, the Real Estate Settlement Procedures Act, the National Flood Insurance Act, the California Homeowner Bill of Rights, and various federal and state privacy protection laws. Noncompliance with any of these laws could subject the Bank to compliance enforcement actions as well as lawsuits, and could also result in administrative penalties, including fines and reimbursements. The Bank and the Company are also subject to federal and state laws prohibiting unfair or fraudulent business practices, untrue or misleading advertising, and unfair competition.

These laws and regulations mandate certain disclosure and reporting requirements, regulate the manner in which financial institutions must deal with customers when taking deposits, making loans, servicing, collecting and foreclosure of loans, and providing other services. Failure to comply with these laws and regulations can subject the Bank to various penalties, including but not limited to enforcement actions, injunctions, fines or criminal penalties, punitive damages to consumers, and the loss of certain contractual rights. The CRA is intended to encourage banks to help meet the credit needs of the communities in which they operate, including low and moderate-income neighborhoods, consistent with safe and sound operations. The bank regulators examine and assign each bank a public CRA rating. The CRA requires the bank regulators to take into account the bank’s record in meeting the needs of its communities when considering an application by a bank to establish or relocate a branch or to conduct certain mergers or acquisitions, or an application by the parent holding company to merge with another bank holding company or acquire a banking organization. An unsatisfactory CRA record could substantially delay approval or result in denial of an application. The Bank was rated “Satisfactory” in meeting community credit needs under the CRA at its most recent examination for CRA performance. On October 24, 2023, the FDIC, the Federal Reserve Board, and the Office of the Comptroller of the Currency issued a final rule to strengthen and modernize the CRA regulations. Under the final rule, banks with assets of at least $2 billion as of December 31 in both of the prior two calendar years will be a “large bank.” The agencies will evaluate large banks under four performance tests: the Retail Lending Test, the Retail Services and Products Test, the Community Development Financing Test, and the Community Development Services Test. The applicability date for the majority of the provisions in the CRA regulations is January 1, 2026, and additional requirements will be applicable on January 1, 2027.

Dodd-Frank provided for the creation of the Consumer Protection Financial Bureau (the “CFPB”), which has broad rulemaking, supervisory and enforcement authority over consumer financial products and services, including deposit products, residential mortgages, home-equity loans and credit cards. The CFPB’s functions include investigating consumer complaints, conducting market research, rulemaking, supervising and examining bank consumer transactions, and enforcing rules related to consumer financial products and services. CFPB regulations and guidance apply to banks, and banks with $10 billion or more in assets are subject to examination by the CFPB. Banks with less than $10 billion in assets, including the Bank, continue to be examined for compliance by their primary federal banking agency.

(k) Federal Home Loan Bank System

The Bank is a member and holder of the capital stock of the Federal Home Loan Bank of San Francisco (“FHLBSF”). There are eleven Federal Home Loan Banks (each, an “FHLB”) across the U.S. owned by their members. Each FHLB serves as a reserve or central bank for its members within its assigned region and makes available loans or advances to its members. Each FHLB is financed primarily from the sale of consolidated obligations of the FHLB system. Each FHLB makes available loans or advances to its members in compliance with the policies and procedures established by the Board of Directors of the individual FHLB. Each member of FHLBSF is currently required to own stock in an amount equal to the greater of: (i) a membership stock requirement of 1.0% of an institution’s “membership asset value” which is determined by multiplying the amount of the member’s membership assets by the applicable membership asset factors and is capped at $15.0 million; or (ii) an activity-based stock requirement (2.7% of the member’s outstanding advances and 0.10% of outstanding letter of credit). At December 31, 2023, the Bank was in compliance with the FHLBSF’s stock ownership requirement, and our investment in FHLBSF capital stock was $16.4 million. As of December 31, 2023, the total borrowing capacity available based on pledged

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collateral and the remaining available borrowing capacity were $1.54 billion and $1.09 billion, respectively, compared to $1.54 billion and $1.07 billion, respectively, as of December 31, 2022.

(l) Impact of Monetary Policies

The earnings and growth of the Bank are largely dependent on its ability to maintain a favorable differential or spread between the yield on its interest-earning assets and the rates paid on its deposits and other interest-bearing liabilities. As a result, the Bank’s performance is influenced by general economic conditions, both domestic and foreign, the monetary and fiscal policies of the federal government, and the policies of the regulatory agencies. The Federal Reserve implements national monetary policies (such as seeking to curb inflation and combat recession) by its open-market operations in U.S. government securities and by varying the discount rate applicable to borrowings by banks from the Federal Reserve Banks. The actions of the Federal Reserve in these areas influence the growth of bank loans, investments, and deposits, and also affect interest rates charged on loans and deposits. The nature and impact of any future changes in monetary policies cannot be predicted.

(m) Regulation of Non-Bank Subsidiaries

Non-bank subsidiaries may be subject to additional or separate regulation and supervision by other state, federal and self-regulatory bodies. Additionally, any foreign-based subsidiaries would also be subject to foreign laws and regulations.

(n) Federal Securities Law

The Company’s common stock is registered with the SEC under the Exchange Act. The Company is subject to the information and proxy solicitation requirements, insider trading restrictions and other requirements under the Exchange Act.

(o) Board Diversity

The California Corporations Code requires all public companies (defined as companies with outstanding shares listed on a major United States stock exchange) that are headquartered in California to have at least three female directors (assuming a board size of at least six directors) and at least three directors from an underrepresented community, defined as “an individual who self identifies as Black, African American, Hispanic, Latino, Asian, Pacific Islander, Native American, Native Hawaiian, or Alaska Native, or who self identifies as gay, lesbian, bisexual, or transgender” by the end of calendar year 2022 (assuming the board size of at least nine directors). Two Los Angeles Superior Courts have struck down these California board diversity laws as unconstitutional and enjoined implementation and enforcement of the legislation. The California Secretary of State has appealed these decisions. Nonetheless, the Company was in compliance with these requirements as of December 31, 2023.

In August 2021, the SEC approved a new Nasdaq Stock Market listing rule that would require each company (1) to have at least one director who self-identifies as a female, and (2) to have at least one director who self-identifies as Black or African American, Hispanic or Latino, Asian, Native American or Alaska Native, Native Hawaiian or Pacific Islander, two or more races or ethnicities, or as LGBTQ+, or (3) to explain why the company does not have at least two directors on its board who self-identify in the categories listed above. The rule also requires Nasdaq-listed companies to provide statistical information in a proposed uniform format on the company’s board of directors related to a director’s self-identified gender, race, and self-identification as LGBTQ+. Each Nasdaq-listed company would have one year from the date the SEC approves the Nasdaq rule to comply with requirement for statistical information regarding diversity. Nasdaq-listed companies would have two years from the date the SEC approves the Nasdaq rule to have, or explain why it does not have, one diverse director and four years after the SEC approves the Nasdaq rule to have, or explain why it does not have, two diverse directors.

Item 1A. Risk Factors

You should carefully consider the risks and uncertainties described below, together with the information included elsewhere in this Report and other documents we file with the SEC. The following risks and uncertainties described below are those that we have identified as material. Events or circumstances arising from one or more of these risks could adversely affect our business, financial condition, operating results and prospects and the price of our common stock. The risks identified below are not intended to be a comprehensive list of all risks we face. Additional risks and uncertainties not presently known to us, or that we may currently view as not material, may also adversely impact our financial condition, business operations and results of operations.

Risks Related to our Lending Activities

Our concentrations of loans in certain industries could have adverse effects on credit quality. As of December 31, 2023, the Bank’s loan portfolio included loans to: (i) lessors of non-residential buildings of $1.74 billion, or 28.2% of total loans; (ii) borrowers in the hospitality industry of $744.6 million, or 12.0% of total loans; and (iii) borrowers in the retail

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industry of $296.7 million, or 5.0% of total loans. Because of these concentrations of loans in specific industries, a deterioration within these industries could affect the ability of borrowers, guarantors and related parties to perform in accordance with the terms of their loans, which could have material and adverse consequences on our financial condition and results of operations.

Our emphasis on commercial lending may expose us to increased lending risks. At December 31, 2023, $4.64 billion, or 75.0%, of total loans consisted of commercial real estate and commercial and industrial loans. These portfolios have grown in recent years and the Bank intends to continue to emphasize these types of lending. These types of loans may expose a lender to greater risk of non-payment and loss than residential real estate loans because repayment of the loans often depends on the successful operation of the property or the borrower’s business and the income stream of the borrowers. Such loans typically involve larger loan balances to single borrowers or groups of related borrowers compared to residential real estate loans. These loans also expose us to greater credit risk than loans secured by residential real estate because the collateral securing these loans typically cannot be liquidated as easily as residential real estate. If we foreclose on these loans, our holding period for the collateral typically is longer than for a single or multi-family residential property because there are fewer potential purchasers of the collateral. Commercial and industrial loans are typically affected by the borrowers’ ability to repay the loans from the cash flows of their businesses. These loans may involve greater risk because the availability of funds to repay each loan depends substantially on the success of the business itself. The collateral securing the loans and leases often depreciates over time, is difficult to appraise and liquidate and fluctuates in value based on the success of the business.

Our focus on lending to small- to mid-sized community-based businesses may increase our credit risk. Most of our commercial business and commercial real estate loans are made to small- or middle-market businesses. These businesses generally have fewer financial resources in terms of capital or borrowing capacity than larger entities and have a heightened vulnerability to economic conditions. If general economic conditions in the markets in which we operate negatively impact this customer sector, our results of operations and financial condition may be adversely affected. Furthermore, the deterioration of our borrowers’ businesses may hinder their ability to repay their loans with us, which could have a material adverse effect on our business, financial condition, results of operations, and cash flows.

Our loan portfolio is predominantly secured by real estate and thus we have a higher degree of risk from a downturn in our real estate markets, especially a downturn in the Southern California real estate market. A downturn in the real estate markets could hurt our business because many of our loans are secured by real estate, predominantly in California. Real estate values and real estate markets are generally affected by changes in national, regional or local economic conditions, fluctuations in interest rates and the availability of loans to potential purchasers, changes in tax laws and other governmental statutes, regulations and policies, and acts of nature, such as earthquakes and natural disasters and pandemics. Further, a return of recessionary conditions and/or negative developments in the domestic and international credit markets may significantly affect the markets in which we do business, the value of our loans, investments, collateral securing our loans and classified assets, reduce the demand for our products and services, and/or adversely affect our ongoing operations, costs and profitability. If real estate values decline, the value of real estate collateral securing our loans could be significantly reduced. Our ability to recover on defaulted loans by foreclosing and selling the real estate collateral would then be diminished, and we would be more likely to suffer material losses on defaulted loans.

We are exposed to risk of environmental liabilities with respect to properties to which we take title. In the course of our business, we may foreclose and take title to real estate, and could be subject to environmental liabilities with respect to these properties. We may be held liable to a governmental entity or to third parties for property damage, personal injury or investigation and clean-up costs incurred by these parties in connection with environmental contamination or the release of hazardous or toxic substances at a property. The costs associated with investigation or remediation activities could be substantial. In addition, if we are the owner or former owner of a contaminated site, we may be subject to claims by third parties based on damages and costs resulting from environmental contamination emanating from the property. In addition, future laws or more stringent interpretations or enforcement policies with respect to existing laws may increase our exposure to environmental liability. Although we have policies and procedures to perform an environmental review before initiating any foreclosure on nonresidential real property, these reviews may not be sufficient to detect all potential environmental hazards. If we become subject to significant environmental liabilities, our business, financial condition, results of operations and prospects could be materially and adversely affected.

Risks Related to Local and International Economic Conditions

Inflation can have an adverse impact on our business and on our customers. Inflation risk is the risk that the value of assets or income from investments will be worth less in the future as inflation decreases the value of money. In response to market indicators of a pronounced rise in inflation, the Federal Reserve raised certain benchmark interest rates to combat inflation. As discussed below under “—Risks Related to Market Interest Rates— Our earnings are affected by changing interest rates,” as inflation increases and market interest rates rise the value of our investment securities, particularly those with longer

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maturities decrease, although this effect can be less pronounced for floating rate instruments. In addition, inflation generally increases the cost of goods and services we use in our business operations, such as electricity and other utilities, which increases our non-interest expenses. Furthermore, our customers are also affected by inflation and the rising costs of goods and services used in their households and businesses, which could have a negative impact on their ability to repay their loans with us. Sustained higher interest rates by the Federal Reserve to tame persistent inflationary price pressures could also push down asset prices and weaken economic activity. A deterioration in economic conditions in the United States and our markets could result in an increase in loan delinquencies and non-performing assets, decreases in loan collateral values and a decrease in demand for our products and services, all of which, in turn, would adversely affect our business, financial condition and results of operations.

Deteriorating business and economic conditions can adversely affect our industry and business. Our financial performance generally, and the ability of borrowers to make payments on outstanding loans and the value of the collateral securing those loans, is highly dependent upon the business and economic conditions in the markets in which we operate and in the United States as a whole. A return of recessionary conditions and/or negative developments in the domestic and international credit markets may significantly affect the markets in which we do business, the value of our loans, investments, and collateral securing our loans and classified assets, reduce the demand for our products and services, and/or adversely affect our ongoing operations, costs and profitability. In addition, rising geopolitical risks nationally and abroad may adversely impact the economy and financial markets in the United States. These economic pressures may adversely affect our business, financial condition, results of operations, and stock price. In particular, we may face the following risks in connection with deterioration in economic conditions:

•Problem assets and foreclosures may increase;

•Our allowance for credit losses may increase;

•Demand for our products and services may decline;

•Low cost or non-interest-bearing deposits may decrease;

•Inflation may accelerate, which may increase our operating costs and also may increase real estate costs and lower customer buying power, thereby reducing loan demand;

•The value of our securities portfolio may decrease; and

•Collateral for loans made by us, especially real estate, may decline in value.

Our banking operations are concentrated primarily in California, Illinois, Texas, Georgia, and New York. Adverse economic conditions in these states in particular could impair borrowers’ ability to repay their loans, decrease the level and duration of deposits by customers, and erode the value of loan collateral. Adverse economic conditions can potentially cause a decline in real estate sales and prices, the recurrence of an economic recession, and higher rates of unemployment. These conditions could increase the amount of our non-performing assets and have an adverse effect on our ability to collect on our non-performing loans or otherwise liquidate our non-performing assets (including other real estate owned) on terms favorable to us, if at all, any of which may cause us to incur losses, adversely affect our capital, and hurt our business.

Our Southern California concentration means economic conditions in Southern California could adversely affect our operations. Though the Bank’s operations have expanded outside of our original Southern California focus, the majority of our loan and deposit concentration is still primarily in Los Angeles County and Orange County in Southern California. Because of this geographic concentration, our results depend largely upon economic conditions in these areas. A deterioration in the economic conditions or a significant natural disaster, pandemics or disease in these market areas, could have a material adverse effect on the quality of the Bank’s loan portfolio, the demand for our products and services, and on our overall financial condition and results of operations.

Changing conditions in South Korea could adversely affect our business. A substantial number of our customers have economic and cultural ties to South Korea and, as a result, we are likely to feel the effects of adverse economic and political conditions in South Korea. U.S. and global economic policies, political or political tension, and global economic conditions may adversely impact the South Korean economy.

Management closely monitors our exposure to the South Korean economy and, to date, we have not experienced any significant loss attributable to our exposure to South Korea. Nevertheless, our efforts to minimize exposure to downturns in the South Korean economy may not be successful in the future, and a significant downturn in the South Korean economy could have a material adverse effect on our financial condition and results of operations. If economic conditions in South Korea

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change, we could experience an outflow of deposits from our customers with connections to South Korea, which could have a material adverse effect on our financial condition and results of operations.

Risk Related to Laws and Regulation and Their Enforcement

Changes in laws and regulations and the associated cost of regulatory compliance may adversely affect our operations and/or increase our costs of operations. We are subject to extensive regulation, supervision and examination by our banking regulators. Such regulation and supervision govern the activities in which a financial institution and its holding company may engage and are intended primarily for the protection of insurance funds and the depositors and borrowers of Hanmi Bank rather than for the protection of our stockholders. Regulatory authorities have extensive discretion in their supervisory and enforcement activities, including the ability to impose restrictions on our operations, comment on the classification of our assets, and determine the level of our allowance for credit losses. These regulations, along with the currently existing tax, accounting, securities, deposit insurance and monetary laws, rules, standards, policies, and interpretations, control the ways financial institutions conduct business, implement strategic initiatives, and prepare financial reporting and disclosures. Changes in such regulation and oversight, whether in the form of regulatory policy, new regulations, legislation or supervisory action, may have a material impact on our operations. Further, compliance with such regulation may increase our costs and limit our ability to pursue business opportunities.

Monetary policies and regulations of the Federal Reserve Board could adversely affect our business, financial condition, and results of operations. Our earnings and growth are affected by the policies of the Federal Reserve Board. An important function of the Federal Reserve Board is to regulate the money supply and credit conditions. Among the instruments used by the Federal Reserve Board to implement these objectives are open market purchases and sales of U.S. government securities, adjustments of the discount rate and changes in banks’ reserve requirements against certain transaction account deposits. These instruments are used in varying combinations to influence overall economic growth and the distribution of credit, bank loans, investments and deposits. Their use also affects interest rates charged on loans or paid on deposits. The monetary policies and regulations of the Federal Reserve Board have a significant effect on the overall economy and the operating results of financial institutions.

Additional requirements imposed by Dodd-Frank and other regulations, including additional requirements imposed by the CFPB, could adversely affect us. Dodd-Frank and related regulations subject us and other financial institutions to more restrictions, oversight, reporting obligations and costs. In addition, this increased regulation of the financial services industry places restrictions on compensation practices and interest rates for customers. Federal and state regulatory agencies also frequently adopt changes to their regulations or change the manner in which existing regulations are applied.

Dodd-Frank created the CFPB, which is tasked with establishing and implementing rules and regulations under certain federal consumer protection laws with respect to the conduct of providers of certain consumer financial products and services. The CFPB has rulemaking authority over many of the statutes governing products and services offered to bank consumers.

Current and future legal and regulatory requirements, restrictions and regulations, including those imposed under Dodd-Frank, may adversely impact our business, financial condition, and results of operations, may require us to invest significant management attention and resources to evaluate and make any changes required by the legislation and accompanying rules. If we fail to comply with applicable consumer rules and regulations, we may be subject to adverse enforcement actions, fines or penalties.

We face a risk of non-compliance and enforcement action with the Bank Secrecy Act and other anti-money laundering statutes and regulations. The Bank Secrecy Act, the USA PATRIOT Act of 2001, and other laws and regulations require financial institutions, to institute and maintain an effective anti-money laundering program and file suspicious activity and currency transaction reports as appropriate. The federal Financial Crimes Enforcement Network is authorized to impose significant civil money penalties for violations of those requirements and has engaged in coordinated enforcement efforts with the individual federal banking regulators, as well as the U.S. Department of Justice, Drug Enforcement Administration, and Internal Revenue Service. We are also subject to increased scrutiny of our compliance with the rules enforced by the Office of Foreign Assets Control and compliance with the Foreign Corrupt Practices Act. If our policies, procedures and systems are deemed deficient, we could be subject to liability, including fines and regulatory actions, which may include restrictions on our ability to pay dividends and to obtain regulatory approvals to proceed with certain transactions, including conducting acquisitions or establishing new branches. Failure to maintain and implement adequate programs to combat money laundering and terrorist financing could also have serious reputational consequences for us.

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Future changes to the FDIC assessment rate could adversely affect our earnings. The amount of premiums that we are required to pay for FDIC insurance is generally beyond our control. If there are additional bank or financial institution failures, if our risk classification changes, or the method for calculating premiums change, this may impact assessment rates, which may have a material and adverse effect on our earnings.

Risks Related to Our Operations

Liquidity risk could impair our ability to fund operations and jeopardize our financial condition. Liquidity is essential to our business. An inability to raise funds through deposits, including brokered deposits, borrowings, the sale of securities and loans, and other sources, could have a material adverse effect on our liquidity. Our access to funding sources in amounts adequate to finance our activities could be impaired by factors that affect us specifically or the financial services industry in general. Factors that could detrimentally impact our access to liquidity sources include a decrease in the level of our business activity due to a market downturn or adverse regulatory action against us. Furthermore, if certain funding sources become unavailable, we may need to seek alternatives at higher costs, which would negatively impact our results of operations.

Our ability to acquire deposits or borrow could also be impaired by factors that are not specific to us, such as a severe disruption of the financial markets or negative views and expectations about the prospects for the financial services industry as a whole.

The soundness of other financial institutions could adversely affect us. Financial services institutions are interrelated as a result of trading, clearing, counterparty or other relationships. We have exposure to many different industries and counterparties, and we routinely execute transactions with counterparties in the financial industry, including brokers and dealers, commercial banks, investment banks, mutual and hedge funds, and other institutional clients. Many of these transactions expose us to credit risk in the event of default of our counterparty or client. In addition, our credit risk may be exacerbated when the collateral held by us cannot be obtained or is liquidated at prices not sufficient to recover the full amount of the financial instrument exposure due us. Any such losses could have a material adverse effect on our financial condition and results of operations.

A failure in or breach of our operational or security systems or infrastructure, including as a result of cyber-attacks or data breaches, could disrupt our businesses, result in the disclosure or misuse of confidential or proprietary information, damage our reputation, increase our costs and/or cause losses. As a financial institution, we depend on our ability to process, record and monitor a large number of customer transactions. As our customer base and locations have expanded throughout the U.S., and as customer, public, legislative and regulatory expectations regarding operational and information security have increased, our operational systems and infrastructure must continue to be safeguarded and monitored for potential failures, disruptions and breakdowns.

Our business, financial, accounting, data processing and other operating systems and facilities may stop operating properly or become disabled or damaged as a result of a number of factors, including events that are wholly or partially beyond our control. For example, there could be: sudden increases in customer transaction volume; electrical or telecommunications outages; degradation or loss of public internet domain; climate change-related impacts and natural disasters such as earthquakes, tornados, and hurricanes; pandemics; events arising from local or larger scale political or social matters, including terrorist acts; building emergencies such as water leakage, fires and structural issues; and cyber-attacks. Although we have business continuity plans and other safeguards in place, our business operations may be adversely affected by significant and widespread disruption to our physical infrastructure or operating systems that support our businesses and customers.

As a financial institution, we are susceptible to information security breaches and cybersecurity-related incidents that may be committed against us, our clients or our vendors, which may result in financial losses or increased costs to us, our clients or our vendors, disclosure or misuse of our information or our client or vendor information, misappropriation of assets, privacy breaches against our clients or our vendors, litigation or damage to our reputation. Information security breaches and cybersecurity-related incidents may include fraudulent or unauthorized access to systems used by us, our clients or our vendors, attacks resulting in denial or degradation of service, and malware or other cyber-attacks. We also may become subject to governmental enforcement actions or litigation in the event we do not comply with data privacy requirements or experience a data breach.

Our business relies on the use of our digital technologies, computer and email systems, software, and networks. In addition, to access our products and services, our customers may use personal smart-phones, tablet PCs, and other mobile devices that are beyond our control systems. Although we believe we have strong information security procedures and controls, our technologies, systems, networks, and our customers’ devices may become the target of cyber-attacks or information security

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breaches that could result in the unauthorized release, gathering, monitoring, misuse, loss or destruction of our customers’ confidential, proprietary and other information, or otherwise disrupt our customers’ or other third parties’ business operations.

Our risk and exposure to cyber-attacks or other information security breaches remains heightened because of, among other things, the evolving nature of these threats, our plans to continue to enhance our internet banking and mobile banking channel strategies, our expanded geographic footprint and that a portion of our employee base works remotely. There continues to be a rise in security breaches and cyber-attacks within the financial services industry, especially in the commercial banking sector. As cyber threats continue to evolve, we may be required to expend significant additional resources to continue to modify or enhance our protective measures or to investigate and remediate any information security vulnerabilities.

Disruptions or failures in the physical infrastructure or operating systems that support our businesses, customers or third parties, or cyber-attacks or security breaches of the networks, systems or devices that our customers or third parties use to access our products and services could result in customer attrition, financial losses, the inability of our customers or vendors to transact business with us, violations of applicable privacy and other laws, regulatory fines, penalties or intervention, reputational damage, reimbursement or other compensation costs, and/or additional compliance costs, any of which could materially adversely affect our results of operations or financial condition.

We rely on management and outside consultants in overseeing cybersecurity risk management. We have a standing Risk, Compliance and Planning Committee, consisting of outside directors. Members of the committee receive regular reports from the Chief Risk Officer related to information technology and information security to fulfill its role of assisting management in identifying, assessing, measuring and managing certain risks facing the Company. The Bank’s Information Security Officer meets at least quarterly with the committee to provide updates on cybersecurity and information security risk, and the Board annually reviews and approves our Information Security Program and Information Security Policy. We also engage outside consultants to support its cybersecurity efforts. All of our directors do not have significant experience in cybersecurity risk management in other business entities comparable to ours and rely on management and other consultants for cybersecurity guidance.

We may not be able to successfully implement future information technology system enhancements, which could adversely affect our business operations and profitability. We invest significant resources in information technology system enhancements to improve functionality and security. We may not be able to successfully implement and integrate future system enhancements, which could adversely impact our ability to provide timely and accurate financial information in compliance with legal and regulatory requirements, which could result in enforcement actions from regulatory authorities. In addition, future system enhancements could have higher than expected costs and/or result in operating inefficiencies.

Failure to properly utilize future system enhancements could result in impairment charges that adversely impact our financial condition and results of operations and could result in significant costs to remediate or replace the defective components. In addition, we may incur significant training, licensing, maintenance, consulting and amortization expenses during and after systems implementations, and any such costs may continue for an extended period of time.

We rely on third-party vendors and other service providers, which could expose us to additional risk. We face additional risk of failure in or breach of operational or security systems or infrastructure related to our reliance on third-party vendors and other service providers. Third parties with which we do business or that facilitate our business activities or vendors that provide services or security solutions for our operations, particularly those that are cloud-based, could be sources of operational and information security risk to us, including from breakdowns or failures of their own systems or capacity constraints. We are subject to operational risks relating to such third parties’ technology and information systems. The continued efficacy of our technology and information systems, related operational infrastructure and relationships with third-party vendors in our ongoing operations is integral to our performance. Failure of any of these resources, including operational or systems failures, interruptions of client service operations and ineffectiveness of or interruption in third-party data processing or other vendor support, may cause material disruptions in our business, impairment of customer relations and exposure to liability for our customers, as well as action by bank regulatory authorities. In addition, a number of our vendors are large national entities, and their services could prove difficult to replace in a timely manner if a failure or other service interruption were to occur. Failures of certain vendors to provide contracted services could adversely affect our ability to deliver products and services to our customers and cause us to incur significant expense.

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Fraudulent activity could damage our reputation, disrupt our businesses, increase our costs and cause losses. We are susceptible to fraudulent activity that may be committed against us, our clients or our vendors, which may result in damage to our reputation, financial losses or increased costs to us or our clients or vendors, disclosure or misuse of our information or our client or vendor information, misappropriation of assets, privacy breaches against our clients or vendors, litigation or reputational harm. Such fraudulent activity may take many forms, including check fraud (counterfeit, forgery, etc.), electronic fraud, wire fraud, phishing, social engineering and other dishonest acts. The occurrence of fraudulent activity could have a material adverse effect on our business, financial condition and results of operations.

We are dependent on key personnel and the loss of one or more of those key personnel may materially and adversely affect our prospects. Our success depends in large part on our ability to attract key people who are qualified and have knowledge and experience in the banking industry in our markets and to retain those people to successfully implement our business objectives. Competition for qualified employees and personnel in the banking industry is intense, particularly for qualified persons with knowledge of, and experience in, our banking space. The process of recruiting personnel with the combination of skills and attributes required to carry out our strategies is often lengthy. Our success depends to a significant degree upon our ability to attract and retain qualified management, loan origination, finance, administrative, compliance, marketing and technical personnel and upon the continued contributions of our management and employees. The unexpected loss of services of one or more of our key personnel or failure to attract or retain such employees could have a material adverse effect on our financial condition and results of operations.

If we fail to maintain an effective system of internal controls and disclosure controls and procedures, we may not be able to accurately report our financial results or prevent fraud. Effective internal controls and disclosure controls and procedures are necessary for us to provide reliable financial reports and disclosures to stockholders, to prevent fraud and to operate successfully as a public company. If we cannot provide reliable financial reports and disclosures or prevent fraud, our business may be adversely affected and our reputation and operating results would be harmed. Any failure to develop or maintain effective internal controls and disclosure controls and procedures or difficulties encountered in their implementation may also result in regulatory enforcement action against us, adversely affect our operating results or cause us to fail to meet our reporting obligations.

Risks Related to Accounting Matters

Our allowance for credit losses may not be adequate to cover actual losses. Current U.S. generally accepted accounting principles (“GAAP”) requires credit loss recognition using a methodology that estimates current expected credit losses for the life of the loan and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates.

A significant source of risk arises from the possibility that we could sustain losses because borrowers, guarantors and related parties may fail to perform in accordance with the terms of their loans. The underwriting and credit monitoring policies and procedures that we have adopted to address these risks may not prevent unexpected losses that could have a material adverse effect on our business, financial condition, results of operations and cash flows. We maintain an allowance for credit losses to provide for losses resulting from loan defaults and non-performance. The allowance is increased for new loan growth. We also make various assumptions and judgments about the collectability of loans in our portfolio, including the creditworthiness of borrowers, the strength of the economy and the value of the real estate and other assets serving as collateral for the repayment of loans. In determining the adequacy of the allowance for credit losses, we rely on our historic loss experience and our evaluation of economic conditions. If our assumptions prove to be incorrect, our allowance for credit losses may not be sufficient to cover losses in our loan portfolio, and adjustments may be necessary to address different economic conditions or adverse developments in the loan portfolio. Consequently, a problem with one or more loans could require us to significantly increase our provision for credit losses. In addition, the DFPI and the FDIC review our allowance for credit losses and as a result of such reviews, they may require us to adjust our allowance for credit losses, loan classifications or recognize loan charge-offs. Material additions to the allowance would materially decrease our net income.

Changes in accounting standards may affect how we record and report our financial condition and results of operations. Our accounting policies and methods are fundamental to how we record and report our financial condition and results of operations. From time to time, the Financial Accounting Standards Board (“FASB”) and SEC change the financial accounting and reporting standards that govern the preparation of our financial statements. Further, changes in accounting standards can be both difficult to predict and may involve judgment and discretion in their interpretation and implementation by us and our independent accounting firm. These changes could materially impact, potentially retroactively, how we report our financial condition and results of operations.

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Risks Related to Market Interest Rates

Our earnings are affected by changing interest rates. Our profitability is dependent to a large extent on our net interest income. Like most financial institutions, we are affected by changes in general interest rate levels and by other economic factors beyond our control. Although we believe we have implemented strategies to reduce the potential effects of changes in interest rates on our results of operations, any substantial and prolonged change in market interest rates could adversely affect our operating results.

Net interest income may decline in a particular period if:

•in a declining interest rate environment, more interest-earning assets than interest-bearing liabilities re-price or mature, or

•in a rising interest rate environment, more interest-bearing liabilities than interest-earning assets re-price or mature, which would be expected to compress our interest rate spread and have a negative effect on our profitability.

Our net interest income may decline based on our exposure to a difference in short-term and long-term interest rates. If the difference between the short-term and long-term interest rates shrinks or disappears, the difference between rates paid on deposits and received on loans could narrow significantly resulting in a decrease in net interest income. In addition to these factors, if market interest rates rise rapidly, interest rate adjustment caps may limit increases in the interest rates on adjustable-rate loans, thus reducing our net interest income. Also, certain adjustable-rate loans re-price based on lagging interest rate indices. This lagging effect may also negatively impact our net interest income when general interest rates continue to rise periodically. Increasing interest rates may also reduce the fair value of our fixed-rate available for sale investment securities negatively impacting shareholders’ equity.

Any substantial, unexpected or prolonged change in market interest rates could have a material adverse effect on our financial condition, liquidity and results of operations. While we pursue an asset/liability strategy designed to mitigate our risk from changes in interest rates, changes in interest rates can still have a material adverse effect on our financial condition and results of operations. Changes in interest rates also may negatively affect our ability to originate real estate loans, the value of our assets and our ability to realize gains from the sale of our assets, all of which affects our earnings. Also, our interest rate risk modeling techniques and assumptions cannot fully predict or capture the impact of actual interest rate changes on our balance sheet or projected operating results.

Changes in the estimated fair value of debt securities may reduce stockholders’ equity and net income. At December 31, 2023, we maintained an available for sale debt securities portfolio of $865.7 million. The estimated fair value of the available for sale debt securities portfolio may change depending on the credit quality of the underlying issuer, market liquidity, changes in interest rates and other factors. Stockholders’ equity increases or decreases by the amount of the change in the unrealized gain or loss (difference between the estimated fair value and the amortized cost) of the available for sale debt securities portfolio, net of the related tax expense or benefit, under the category of accumulated other comprehensive income (loss). At December 31, 2023, accumulated other comprehensive losses were $71.9 million, net of tax, primarily related to unrealized holding losses in the available for sale investment securities portfolio, which negatively impacted stockholders’ equity, as well as book value per common share.

We conduct a periodic review of the debt securities portfolio to determine if any decline in the estimated fair value of any security below its cost basis is considered impaired. Factors that are considered include the extent to which the fair value is less than the amortized cost basis, the financial condition, credit rating and future prospects of the issuer, whether the debtor is current on contractually obligated interest and principal payments and our intent and ability to retain the security for a period of time sufficient to allow for any anticipated recovery in fair value and the likelihood of any near-term fair value recovery. If such decline is deemed to be uncollectible, the security is written down to a new cost basis and the resulting loss will be recognized as a securities credit loss expense through an allowance for securities credit losses.

Risks Related to Competitive Matters

Competition may adversely affect our performance. The banking and financial services businesses in our market areas are highly competitive. We face competition in attracting deposits, making loans, and attracting and retaining employees, particularly in the Korean-American community. Price competition for loans and deposits sometimes requires us to charge lower interest rates on our loans and pay higher interest rates on our deposits, which may reduce our net interest income. Many of our competitors have substantially greater resources and lending limits than we have and may offer services that we do not provide. The greater resources and broader offering of deposit and loan products of some of our competitors may also limit our ability to increase our interest-earning assets. The increasingly competitive environment is a result of changes in regulation,

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changes in technology and product delivery systems, new competitors in the market, and the pace of consolidation among financial services providers. Our results in the future may be materially and adversely impacted depending upon the nature and level of competition.

Risks Related to the COVID-19 Pandemic

The economic impact of the COVID-19 pandemic could adversely affect our financial condition and results of operations. The economic impact of the COVID-19 pandemic may adversely affect our financial condition and results of operations. Given its ongoing and dynamic nature, it is difficult to predict the full impact of the COVID-19 pandemic on our business. The extent of such impact will depend on future developments, which are highly uncertain, including the arrival of new variants and when the coronavirus can be controlled and abated. As the result of the COVID-19 pandemic, any governmental actions taken in response thereto and any potential related adverse local and national economic consequences, we could be subject to a number of risks that could have a material adverse effect on our business, financial condition, liquidity, and results of operations.

Risks Related to Tax Matters

If our deferred tax assets are determined not to be recoverable, it would negatively impact our earnings. Deferred tax assets are evaluated on a quarterly basis to determine if they are expected to be recoverable in the future. Our evaluation considers positive and negative evidence to assess whether it is more likely than not that a portion of the asset will not be realized. Future negative operating performance or other negative evidence may result in a valuation allowance being recorded against some or the entire amount.

Changes to tax regulations could negatively impact our earnings. Our future earnings could be negatively impacted by changes in tax laws, including changing tax rates and limiting, phasing-out or eliminating deductions or tax credits, taxing certain excess income from intellectual property and changing other tax laws in the U.S.

Other Risks Related to Our Business

We are exposed to the risks of natural disasters and global market disruptions. A significant portion of our operations is concentrated in Southern California, which is in an earthquake-prone region. A major earthquake may result in material loss to us. A significant percentage of our loans are secured by real estate. Many of our borrowers may suffer property damage, experience interruption of their businesses or lose their jobs after an earthquake. Those borrowers might not be able to repay their loans, and the collateral for such loans may decline significantly in value. We are vulnerable to losses if an earthquake, fire, flood or other natural catastrophe occurs in Southern California.

Additionally, global markets may be adversely affected by natural disasters, the emergence of widespread health emergencies or pandemics, cyber-attacks or campaigns, military conflict, terrorism or other geopolitical events. Also, any sudden or prolonged market downturn in the U.S. or abroad, as a result of the above factors or otherwise could result in a decline in revenue and adversely affect our results of operations and financial condition, including capital and liquidity levels.

Risks Relating to Ownership of Our Common Stock

The Bank could be restricted from paying dividends to us, its sole shareholder, and, thus, we would be restricted from paying dividends to our stockholders in the future. The primary source of our income from which we pay our obligations and distribute dividends to our stockholders is from the receipt of dividends from the Bank. The availability of dividends from the Bank is limited by various statutes and regulations. As of January 1, 2024, after giving effect to the 2024 first quarter dividend declared by the Company, the Bank had the ability to pay $174.5 million of dividends without the prior approval of the Commissioner of the DFPI.

The price of our common stock may be volatile or may decline. The trading price of our common stock may fluctuate significantly due to a number of factors, many of which are outside our control. In addition, the stock market is subject to fluctuations. These broad market fluctuations could adversely affect the market price of our common stock. Among the factors that could affect our stock price are:

•actual or anticipated fluctuations in our operating results and financial condition;

•changes in revenue or earnings estimates or publication of research reports and recommendations by financial analysts;

•failure to meet analysts’ revenue or earnings estimates;

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•speculation in the press or investment community;

•strategic actions by us or our competitors, such as acquisitions or restructurings;

•general market conditions and, in particular, developments related to market conditions for the financial services industry;

•inflation and changes in interest rates;

•proposed or adopted legislative, regulatory or accounting changes or developments;

•anticipated or pending investigations, proceedings or litigation that involve or affect us; or

•domestic and international economic factors unrelated to our performance.

The stock market and, in particular, the market for financial institution stocks, has experienced significant volatility. The trading price of the shares of our common stock will depend on many factors, which may change from time to time, including, without limitation, our financial condition, performance, creditworthiness and prospects, future sales of our equity securities, and other factors identified above in the section captioned “Cautionary Note Regarding Forward-Looking Statements.” A significant decline in our stock price could result in substantial losses for individual stockholders.

Your share ownership may be diluted by the issuance of additional shares of our common stock in the future. Your share ownership may be diluted by the issuance of additional shares of our common stock in the future. We may decide to raise additional funds for many reasons, including in response to regulatory or other requirements, to meet our liquidity and capital needs, to finance our operations and business strategy or for other reasons. If we raise funds, by issuing equity securities or instruments that are convertible into equity securities, the percentage ownership of our existing stockholders will be reduced. Further, the new equity securities may have rights, preferences and privileges superior to those of our common stock.

Anti-takeover provisions and state and federal law may limit the ability of another party to acquire us, which could cause our stock price to decline. Various provisions of our Amended and Restated Certificate of Incorporation and By-laws could delay or prevent a third party from acquiring us, even if doing so might be beneficial to our stockholders. These provisions provide for, among other things, supermajority approval for certain actions, limitation on large stockholders taking certain actions and authorization to issue “blank check” preferred stock by action of the Board of Directors without stockholder approval. In addition, the BHCA, and the Change in Bank Control Act of 1978, as amended, together with applicable federal regulations, require that, depending on the particular circumstances, either Federal Reserve approval must be obtained or notice must be furnished to Federal Reserve and not disapproved prior to any person or entity acquiring “control” of a state nonmember bank, such as the Bank. Additional prior approvals from other federal or state bank regulators may also be necessary depending upon the particular circumstances. These provisions may prevent a merger or acquisition that would be attractive to stockholders and could limit the price investors would be willing to pay in the future for our common stock.

Item 1B. Unresolved Staff Comments

None.

Item 1C. Cybersecurity

Cybersecurity Risk, Management, and Strategy

Cybersecurity is a significant and integrated component of the Company’s risk management strategy, designed to protect the confidentiality, integrity, and availability of sensitive information contained within the Company’s information systems. The Information Security Officer is primarily responsible for administering, updating and enforcing the cybersecurity components of the risk management strategy and reports to the Chief Risk Officer. The Information Security Officer periodically collaborates with third-party service providers and industry groups to discuss cybersecurity trends and best practices. The Information Security Officer is supported by the Chief Technology Officer, who reports directly to the Chief Financial Officer. The Chief Technology Officer oversees our Information Technology department, comprising our first line of defense.

As a financial services company, cyber threats are present and growing, and the potential exists for a cybersecurity incident disrupting business operations and compromising sensitive data. To manage cybersecurity risk, the Company has implemented a multi-layered “defense-in-depth” cybersecurity strategy, integrating people, technology, and processes. The cybersecurity strategy is memorialized within the Company’s information security program. The program incorporates regulatory guidance and industry standards while leveraging industry associations, third-party benchmarking, audits, threat

25

intelligence and peer industry groups. The information security program is reviewed by the Chief Risk Officer and presented to the Risk, Compliance and Planning Committee to periodically account for the changes in the cyber threat landscape. It is also periodically assessed by the Internal Audit department.

The Company has deployed an in-depth cybersecurity strategy to protect its assets, which includes a diverse preventive and detective tool set to stop, monitor, and alert management of suspicious activities and potential advanced persistent threats. We have implemented other preventive technologies and mitigating processes to include on-going education and training for employees, periodic tabletop exercises and recovery tests, and regular infrastructure penetration tests conducted by cybersecurity professionals and third-party specialists. Our internal and external auditors, along with independent external partners, periodically assess our processes, systems and controls for design and operating effectiveness, and provide recommendations to bolster our cybersecurity program. In addition, employees are subjected to regular simulated phishing assessments designed to sharpen threat detection and reporting capabilities. We also monitor our email gateways for malicious phishing emails and monitor remote connections through a secure virtual private network. Like many companies, we rely on third-party vendor solutions to support our operations. Notable services include 24/7 security monitoring and response, continuous vulnerability scanning, third-party monitoring, and threat intelligence. We have a vendor management program in place to assess and manage risks associated with third-party service providers.

To prepare to respond to incidents, the Enterprise Risk Management Committee periodically reviews and updates our cyber Incident Response Plan (“IRP”). The IRP provides a framework to address potential and actual cybersecurity incidents to include assessment to recovery by our Incident Response Team and notification to the appropriate management and board committees and regulatory agencies. The Incident Response Team is comprised of representatives from various departments including Information Security, Risk Management, Legal, Operations, Marketing and Accounting. Our Information Security Officer manages the Incident Response Plan and coordinates with senior level management and multiple areas of the company in execution of the plan. While we have experienced cybersecurity incidents, we have not, to our knowledge, experienced an incident materially affecting, or reasonably likely to materially affect the Company, including its business strategy, results of operations, or financial condition.

Cybersecurity Governance

Our Information Security Officer is accountable for managing the information security department and executing the information security program. The information security department is responsible for cybersecurity risk assessments, alert monitoring, incident response, vulnerability assessment, threat intelligence, identity access governance, and third-party information security risk management. The department consists of information security professionals with varying levels of education, experience and certifications. Our information security department is further supported by our first line of defense, the Information Technology department and a third-party managed service security provider.

The Risk, Compliance and Planning Committee of our Board of Directors provides oversight of the information security program including cybersecurity and is chaired by an independent director. Cybersecurity metrics are reported to the committee quarterly. Additionally, management has established an Information Technology Executive Steering Committee focused on, technology impact, and an Enterprise Risk Management Committee focused on business and risk impact, both consisting of executives and department leaders across multiple domains. These committees generally meet quarterly and more frequently when warranted. The information security department holds a monthly security meeting with the managers from the information technology department to discuss significant security incidents and status of the threat landscape. The Information Security Officer reports significant cybersecurity or privacy incidents and the state of the information security program to the Risk, Compliance and Planning Committee of the board on a quarterly basis. The Risk, Compliance and Planning Committee of the Board of Directors provide a report of activities to the full board at each quarterly board meeting.

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Item 2. Properties

Hanmi Financial’s principal office is located at 900 Wilshire Boulevard, Suite 1250, Los Angeles, California. As of December 31, 2023, we had 43 properties consisting of 35 branch offices and eight loan production offices. We own eight locations and the remaining properties are leased.

As of December 31, 2023, our consolidated investment in premises and equipment, net of accumulated depreciation and amortization, was $22.0 million. Our lease expense was $8.8 million, net of lease income of $0.1 million, for the year ended December 31, 2023. We consider our present facilities to be sufficient for our current operations.

Item 3. Legal Proceedings

Hanmi Financial and its subsidiaries are subject to lawsuits and claims that arise in the ordinary course of their businesses. Neither Hanmi Financial nor any of its subsidiaries is currently involved in any legal proceedings, the outcome of which we believe would have a material adverse effect on the business, financial condition or results of operations of Hanmi Financial or its subsidiaries.

Item 4. Mine Safety Disclosures

Not applicable.

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Part II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Market Information

Hanmi Financial’s common stock is traded on the Nasdaq Global Select Market (“Nasdaq”) under the symbol “HAFC”. As of February 21, 2024, there were approximately 635 record holders of our common stock.

Performance Graph

The following graph shows a comparison of cumulative total stockholder return on Hanmi Financial’s common stock with the cumulative total returns for: (i) the Nasdaq Composite Index; (ii) the Standard and Poor’s 500 Financials Index (“S&P 500 Financials”); and (iii) the S&P U.S. Small Cap Banks Index (which replaced the SNL U.S. Bank $1B-$5B Index and the SNL U.S. Bank $5B-$10B Index, no longer compiled by S&P Global, New York, New York as of August 7, 2021). The graph assumes an initial investment of $100 and reinvestment of dividends. The graph is historical only and may not be indicative of possible future performance. The performance graph shall not be deemed incorporated by reference to any general statement incorporating by reference to this Annual Report on Form 10-K into any filing under the Securities Act, or under the Exchange Act, except to the extent that we specifically incorporate this information by reference, and shall not otherwise be deemed filed under either the Securities Act or the Exchange Act.

 

	December 31,
	2019		2020		2021		2022		2023
Hanmi Financial Corporation	$	100.00	$	56.70	$	118.40	$	123.75	$	97.00
Nasdaq Composite	$	100.00	$	143.64	$	174.36	$	116.65	$	167.30
S&P 500 Financials	$	100.00	$	95.90	$	127.11	$	111.41	$	122.48
S&P U.S. Small Cap Banks	$	100.00	$	87.74	$	119.31	$	102.54	$	99.58

Source: S&P Global, New York, NY

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Recent Unregistered Sales of Equity Securities

There were no unregistered sales of Hanmi Financial’s equity securities during the year ended December 31, 2023.

Purchases of Equity Securities by the Issuer and Affiliated Purchasers

The following table presents stock purchases made under the stock repurchase program announced on January 24, 2019 that authorized repurchases of up to 5.0%, or 1,500,000, of our shares outstanding. The table below provides information on purchases made during the three months ended December 31, 2023:

Purchase Date:	Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Program		Maximum Shares That May Yet Be Purchased Under the Program
October 1, 2023 - October 31, 2023	$	14.22		10,000		449,972
November 1, 2023 - November 30, 2023	$	14.90		40,000		409,972
December 1, 2023 - December 31, 2023	$	—		—		409,972
Total	$	14.76		50,000		409,972

During 2023, the Company acquired 76,767 shares from employees in connection with the cashless exercise of stock options and satisfaction of income tax withholding obligations incurred through vesting of Company stock awards. Such shares were not purchased as a part of the Company’s repurchase program.

Item 6. [RESERVED]

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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

This discussion presents management’s analysis of the financial condition and results of operations as of and for the years ended December 31, 2023, 2022 and 2021. This discussion should be read in conjunction with our Consolidated Financial Statements and the Notes related thereto presented elsewhere in this Report. See also “Cautionary Note Regarding Forward-Looking Statements.”

Critical Accounting Policies

We have established various accounting policies that govern the application of GAAP in the preparation of our Consolidated Financial Statements. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions to arrive at the carrying value of assets and liabilities and amounts reported as revenues and expenses. Our financial position and results of operations can be materially affected by these estimates and assumptions. Critical accounting policies are those policies that are most important to the determination of our financial condition and results of operations and that require management to make assumptions and estimates that are subjective or complex. Our significant accounting policies are discussed in the “Notes to Consolidated Financial Statements, Note 1 — Summary of Significant Accounting Policies.” Management believes that the following policy is critical.

Allowance for credit losses and Allowance for credit losses related to off-balance sheet items

Our allowance for credit losses methodologies incorporate a variety of risk considerations, both quantitative and qualitative, in establishing an allowance for credit losses that management believes is appropriate at each reporting date. Quantitative factors include our historical loss experiences on loan pools segmented by type, and considers risk rating, delinquency and charge-off trends, collateral values, changes in nonperforming loans, and other factors.

We use qualitative factors to adjust the allowance calculation for risks not considered by the quantitative calculations. Qualitative factors considered in our methodologies include the general economic forecast in our markets, concentrations of credit, changes in lending management and staff, quality of the loan review system, and changes in interest rates.

The Company reviews baseline and alternative economic scenarios from Moody’s and quarterly projections of federal funds target rates from the Federal Open Market Committee (“FOMC”) for consideration as qualitative factors. Moody’s publishes a baseline forecast that represents the estimate of the most likely path for the United States economy through the current business cycle (50% probability that economic conditions will be worse and 50% probability that economic conditions will be better) as well as alternative scenarios to examine how different types of shocks will affect the future performance of the United States economy.

Certain quantitative and qualitative factors used to estimate credit losses and establish an allowance for credit losses are subject to uncertainty. The adequacy of our allowance for credit losses is sensitive to changes in current and forecasted economic conditions that may affect the ability of borrowers to make contractual payments as well as the value of the collateral securing such payments.

Although management believes it uses the best information necessary to establish the allowance for credit losses, future adjustments to the allowance for credit losses may be necessary and the Company’s results of operations could be adversely affected if circumstances differ substantially from the assumptions used in making the determinations.

In addition, because future events affecting borrowers and collateral cannot be predicted without uncertainty, the existing allowance for credit losses may not be adequate or increases may be necessary should the quality of any loans deteriorate as a result of the factors discussed. Any material increase in the allowance for credit losses would adversely impact the Company's financial condition and results of operations.

See “— Allowance for Credit Losses”, “Financial Condition — Allowance for credit losses and Allowance for credit losses related to off-balance sheet items”, “Results of Operations — Credit Loss Expense” and “Notes to Consolidated Financial Statements, Note 1 — Summary of Significant Accounting Policies” for additional information on methodologies used to determine the allowance for credit losses and the allowance for credit losses related to off-balance sheet items.

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Allowance Attribution Analysis

	Allowance for credit losses
	(in thousands)
December 31, 2022	$	71,523
Charge-offs		(16,090	)
Recoveries		9,047
Provision (recovery) attributed to qualitative considerations		(2,525	)
Provision attributed to quantitative considerations		371
Provision attributed to individually evaluated loans		7,136
December 31, 2023	$	69,462

The following are the key assumptions employed in the determination of the allowance for credit losses at December 31, 2023 and 2022:

Economic Factors

	12/31/2023			12/31/2022			Description of Economic Factors
Prepayment rates		14.44	%		14.52	%	Average total portfolio rate
Curtailment rates		83.72	%		85.80	%	Average total portfolio rate
Unemployment rate		3.96	%		4.00	%	Average of 4 quarter forecast period; Baseline (1)
Gross domestic product (“GDP”) growth rate year over year %		(0.91	)%		(1.29	)%	Average of 4 quarter forecast period; Alternative Scenario 3 (2)
Consumer sentiment		71.78			70.10		Average of 4 quarter forecast period; Alternative Scenario 3 (2)
Federal funds target rate		4.6	%		5.1	%	1 year forecast of median target rate; FOMC December 2023 projection

(1)The Moody's Baseline scenario was used for the unemployment rate forecast for periods ended December 31, 2023 and 2022. The unemployment rate forecast remained with the Baseline Scenario due to job market volatility and deterioration below expectations, with less impact to the lending environment compared to GDP growth and consumer sentiment forecasts.

(2)The Moody's Alternative Scenario 3 was used for the GDP growth rate and consumer sentiment forecast for the periods ended December 31, 2023 and 2022. Effective Q2 2022, the Company elected to use Alternative Scenario 3 (mid-level downside/pessimistic scenario) for the GDP growth rate and consumer sentiment forecasts, given the elevation in inflation and rising rate environment.

The potential effect from changes in key assumptions could affect the estimated allowance for credit losses at December 31, 2023. The following table illustrates the possible individual effects to the allowance for credit losses from changes in such assumptions:

Sensitivity Analysis

Assumptions	Increase		Decrease
	(in thousands)
Forecast period (from 12 months to 6 or 24 months)	$	494	$	(1,267	)
Estimated unemployment rate (from Baseline to S2 or S1) (1)	$	10,658	$	(2,643	)
Estimated prepayment and curtailment rates (+/-10%)	$	538	$	(539	)
Estimated GDP growth rate (from S3 to S4 or S2) (1)	$	33	$	(57	)
Consumer sentiment (from S3 to S4 or S2) (1)	$	654	$	(2,091	)
Federal funds target rate (+/- 25 bps)	$	100	$	(100	)

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(1)The following table provides additional details to the Baseline and Alternative Scenarios referred to above:

	Unemployment Rate			GDP Year over Year % Change			Consumer Sentiment
Baseline scenario		3.96	%		—	%		—
Alternative Scenario S1		3.14	%		—	%		—
Alternative Scenario S2		5.70	%		0.35	%		79.99
Alternative Scenario S3		—	%		-0.91	%		71.78
Alternative Scenario S4		—	%		-1.65	%		69.23

Executive Overview

For the years ended December 31, 2023, 2022 and 2021, net income was $80.0 million, $101.4 million and $98.7 million, respectively. The decrease of $21.4 million, or 21.1%, in net income for the year ended December 31, 2023 as compared with the year ended December 31, 2022, reflects a $16.4 million decrease in net interest income, a $6.2 million increase in noninterest expense and a $3.5 million increase in credit loss expense, offset by a $4.8 million decrease in income tax expense.

The increase of $2.7 million, or 2.8%, in net income for the year ended December 31, 2022 as compared with the year ended December 31, 2021, was primarily attributable to an increase in net interest income of $42.6 million. Offsetting this increase were an increase in noninterest expense of $5.8 million, a decrease in noninterest income of $6.3 million, as well as a $25.2 million reduction in the benefit from the year-ago credit loss recovery.

For the years ended December 31, 2023, 2022 and 2021, our earnings per diluted share were $2.62, $3.32 and $3.22, respectively.

Additional significant financial highlights include:

•Loans receivable increased by $215.3 million, or 3.6%, to $6.18 billion as of December 31, 2023, compared with $5.97 billion as of December 31, 2022. The net increase was due to production of $1.29 billion, offset by payoffs and prepayments of $1.07 billion.

•Securities increased $11.9 million to $865.7 million at December 31, 2023 from $853.8 million at December 31, 2022, primarily attributable to a decrease in unrealized losses during 2023.

•Deposits were $6.28 billion at December 31, 2023 compared with $6.17 billion at December 31, 2022 as time deposits and money market and savings deposits increased $498.7 million and $178.0 million, respectively, while non-interest bearing demand deposits decreased $536.0 million.

•Borrowings decreased $25.0 million to $325.0 million at December 31, 2023 compared with $350.0 million at December 31, 2022.

•Cash dividends were $1.00 per share of common stock for the year ended December 31, 2023 compared with $0.94 and $0.54 per share of common stock for the years ended December 31, 2022 and 2021, respectively.

•Return on average assets and return on average stockholders’ equity for the year ended December 31, 2023 were 1.08% and 10.70%, respectively, as compared with 1.44% and 14.83%, respectively, for the year ended December 31, 2022.

Results of Operations

Net Interest Income

Our primary source of revenue is net interest income, which is the difference between interest and fees derived from earning assets, and interest paid on liabilities obtained to fund those assets. Our net interest income is affected by changes in the level and mix of interest-earning assets and interest-bearing liabilities, referred to as volume changes. Net interest income is also affected by changes in the yields earned on assets and rates paid on liabilities, referred to as rate changes. Interest rates charged on loans are affected principally by changes to market interest rates, the demand for such loans, the supply of money available for lending purposes, and other competitive factors. Those factors are, in turn, affected by general economic conditions and other factors beyond our control, such as federal economic policies, the general supply of money in the economy, legislative tax policies, governmental budgetary matters, and the actions of the Federal Reserve.

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The following table shows the average balances of assets, liabilities and stockholders’ equity; the amount of interest income, on a tax equivalent basis and interest expense; the average yield or rate for each category of interest-earning assets and interest-bearing liabilities; and the net interest spread and the net interest margin for the periods indicated. All average balances are daily average balances.

	For the Year Ended
	December 31, 2023								December 31, 2022								December 31, 2021
				Interest		Average						Interest		Average						Interest		Average
	Average			Income /		Yield /			Average			Income /		Yield /			Average			Income /		Yield /
	Balance			Expense		Rate			Balance			Expense		Rate			Balance			Expense		Rate
Assets	(dollars in thousands)
Interest-earning assets:
Loans receivable (1)	$	5,968,339		$	339,811		5.69	%	$	5,596,564		$	257,878		4.61	%	$	4,794,505		$	208,601		4.35	%
Securities (2)		967,231			16,938		1.78	%		949,889			12,351		1.33	%		845,437			6,230		0.75	%
FHLB stock		16,385			1,229		7.50	%		16,385			1,024		6.25	%		16,385			941		5.74	%
Interest-bearing deposits in other banks		230,835			11,350		4.92	%		236,678			2,560		1.08	%		684,442			903		0.13	%
Total interest-earning assets		7,182,790			369,328		5.15	%		6,799,516			273,813		4.03	%		6,340,769			216,675		3.42	%
Noninterest-earning assets:
Cash and due from banks		62,049								66,993								62,401
Allowance for credit losses		(70,501	)							(73,094	)							(84,735	)
Other assets		240,779								247,838								225,750
Total assets	$	7,415,117							$	7,041,253							$	6,544,185
Liabilities and stockholders' equity
Interest-bearing liabilities:
Deposits:
Demand: interest-bearing	$	97,388		$	117		0.12	%	$	121,992		$	100		0.08	%	$	113,326		$	61		0.05	%
Money market and savings		1,547,911			44,066		2.85	%		2,025,961			12,753		0.63	%		2,028,235			5,199		0.26	%
Time deposits		2,371,520			90,525		3.82	%		1,136,073			13,085		1.15	%		1,111,857			6,395		0.58	%
Total interest-bearing deposits		4,016,819			134,708		3.35	%		3,284,026			25,938		0.79	%		3,253,418			11,655		0.36	%
Borrowings		197,409			6,867		3.48	%		148,047			2,382		1.61	%		145,297			1,697		1.17	%
Subordinated debentures		129,708			6,482		5.00	%		149,891			7,846		5.23	%		154,400			8,273		5.35	%
Total interest-bearing liabilities		4,343,936			148,057		3.41	%		3,581,964			36,166		1.01	%		3,553,115			21,625		0.61	%
Noninterest-bearing liabilities and equity:
Demand deposits: noninterest-bearing		2,173,813								2,665,646								2,307,052
Other liabilities		149,460								109,847								77,637
Stockholders' equity		747,908								683,796								606,381
Total liabilities and stockholders' equity	$	7,415,117							$	7,041,253							$	6,544,185
Net interest income (taxable equivalent basis)				$	221,271							$	237,647							$	195,050
Cost of deposits (3)							2.18	%							0.44	%							0.21	%
Net interest spread (taxable equivalent basis) (4)							1.74	%							3.02	%							2.81	%
Net interest margin (taxable equivalent basis)(5)							3.08	%							3.50	%							3.08	%

(1)Loans receivable include loans held for sale and exclude the allowance for credit losses. Nonaccrual loans receivable are included in the average loans receivable balance.

(2)Amounts calculated on a fully taxable equivalent basis using the current statutory federal tax rate of 21%.

(3)Represents interest expense on deposits as a percentage of all interest-bearing and noninterest-bearing deposits.

(4)Represents the average yield earned on interest-earning assets less the average rate paid on interest-bearing liabilities.

(5)Represents net interest income as a percentage of average interest-earning assets.

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The table below shows changes in interest income and interest expense and the amounts attributable to variations in interest rates and volumes for the periods indicated. The variances are primarily attributable to simultaneous volume and rate changes that have been allocated to the change due to volume and the change due to rate categories in proportion to the relationship of the absolute dollar amount attributable solely to the change in volume and to the change in rate.

	Year Ended December 31,
	2023 vs 2022									2022 vs 2021
	Increases (Decreases) Due to Change In									Increases (Decreases) Due to Change In
	Volume			Rate			Total			Volume			Rate			Total
	(in thousands)
Interest and dividend income:
Loans receivable (1)	$	17,046		$	64,887		$	81,933		$	34,743		$	14,534		$	49,277
Securities (2)		225			4,362			4,587			770			5,351			6,121
FHLB stock		—			205			205			—			83			83
Interest-bearing deposits in other banks		(63	)		8,853			8,790			(591	)		2,248			1,657
Total interest and dividend income (taxable equivalent) (2)	$	17,208		$	78,307		$	95,515		$	34,922		$	22,216		$	57,138
Interest expense:
Demand: interest-bearing	$	(20	)	$	37		$	17		$	5		$	34		$	39
Money market and savings		(2,467	)		33,780			31,313			(5	)		7,559			7,554
Time deposits		14,230			63,210			77,440			139			6,551			6,690
Borrowings		617			3,868			4,485			32			653			685
Subordinated debentures		(1,056	)		(308	)		(1,364	)		(248	)		(179	)		(427	)
Total interest expense	$	11,304		$	100,587		$	111,891		$	(77	)	$	14,618		$	14,541
Change in net interest income (taxable equivalent) (2)	$	5,904		$	(22,280	)	$	(16,376	)	$	34,999		$	7,598		$	42,597

(1)Loans receivable include loans held for sale and exclude the allowance for credit losses. Nonaccrual loans receivable are included in the average loans receivable balance.

(2)Amounts calculated on a fully equivalent basis using the current statutory federal tax rate of 21%.

2023 Compared to 2022

Interest income, on a taxable equivalent basis, increased $95.5 million, or 34.9%, to $369.3 million for the year ended December 31, 2023 from $273.8 million for the year ended December 31, 2022. Interest expense increased $111.9 million, or 309.4%, to $148.1 million for 2023, from $36.2 million in 2022. Net interest income, on a taxable equivalent basis, decreased by $16.4 million, or 6.9%, to $221.3 million in 2023, from $237.6 million in 2022. The decrease in net interest income was due to higher rates paid on deposits and borrowings and higher average time deposit balances, offset partially by increases in higher average interest-earning asset yields and higher average loan balances. Average loans were 83.1% of average interest earning assets for 2023, an increase from 82.3% for 2022. The net interest spread and net interest margin, on a taxable equivalent basis, for the year ended December 31, 2023 were 1.74% and 3.08%, respectively, compared with 3.02% and 3.50%, respectively, for 2022.

The average balance of interest earning assets increased $383.3 million, or 5.6%, to $7.18 billion for the year ended December 31, 2023 from $6.80 billion for 2022. The increase in the average balance of interest-earning assets was due mainly to a $371.8 million increase in average loans, from $5.60 billion in 2022, to $5.97 billion in 2023. The average balance of securities increased $17.3 million, or 1.8%, to $967.2 million in 2023 from $949.9 million for 2022. The average balance of interest-bearing liabilities increased $762.0 million, or 21.3%, to $4.34 billion for 2023 compared to $3.58 billion in 2022. The average balance of time deposits and borrowings increased $1.24 billion and $49.4 million, respectively, offset by decreases in the average balance of money market and savings accounts, subordinated debentures, and interest-bearing demand deposits of $478.1 million, $20.2 million, and $24.6 million, respectively.

The average yield on interest-earning assets, on a taxable equivalent basis, increased 112 basis points to 5.15% in 2023 from 4.03% in 2022, due mainly to the increase in the yields on loans and interest-bearing deposits in other banks. The average yield on loans increased to 5.69% for the year ended December 31, 2023 from 4.61% for 2022, primarily due to the continued increase in market interest rates in 2023. The average yield on securities, on a taxable equivalent basis, increased to 1.78% for 2023 from 1.33% for 2022. The average rate paid on interest-bearing liabilities increased by 240 basis points to 3.41% for 2023 from 1.01% for 2022. The increase reflected the higher cost of interest-bearing deposits, the greater percentage of time deposits in the deposit portfolio, and the increase in the average rate on borrowings due to increases in market rates in 2023. The average rate on interest-bearing deposits increased from 0.79% in 2022, to 3.35% in 2023. The average rate on borrowings increased from 1.61% in 2022, to 3.48% in 2023.

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2022 Compared to 2021

Interest income, on a taxable equivalent basis, increased $57.1 million, or 26.4%, to $273.8 million for the year ended December 31, 2022 from $216.7 million for the year ended December 31, 2021. Interest expense increased $14.5 million, or 67.2%, to $36.2 million for 2022, from $21.6 million in 2021. Net interest income, on a taxable equivalent basis, increased by $42.6 million, or 21.8%, to $237.6 million in 2022, from $195.1 million in 2021. The increase in net interest income was due to an increase in the average yield and average balance on average interest-earning assets, offset partially by increases in the rates paid on interest-bearing liabilities and borrowings. Average loans were 82.3% of average interest earning assets for 2022, an increase from 75.6% for 2021. The net interest spread and net interest margin, on a taxable equivalent basis, for the year ended December 31, 2022 were 3.02% and 3.50%, respectively, compared with 2.81% and 3.08%, respectively, for 2021.

The average balance of interest earning assets increased $458.7 million, or 7.2%, to $6.80 billion for the year ended December 31, 2022 from $6.34 billion for 2021. The increase in the average balance of interest-earning assets was due mainly to an $802.0 million increase in average loans, from $4.79 billion in 2021, to $5.60 billion in 2022. The average balance of securities increased $104.5 million, or 12.4%, to $949.9 million in 2022 from $845.4 million for 2021. The average balance of interest-bearing liabilities increased $28.8 million, or 0.8%, to $3.58 billion for 2022 compared to $3.55 billion in 2021. The increase in average interest-bearing liabilities resulted primarily from an increase in average time deposits in 2022.

The average yield on interest-earning assets, on a taxable equivalent basis, increased 61 basis points to 4.03% in 2022 from 3.42% in 2021, due mainly to the increase in the yields on loans and securities. The average yield on loans increased to 4.61% for the year ended December 31, 2022 from 4.35% for 2021, primarily due to the continued increase in market interest rates in 2022. The average yield on securities, on a taxable equivalent basis, increased to 1.33% for 2022 from 0.75% for 2021. The average rate paid on interest-bearing liabilities increased by 40 basis points to 1.01% for 2022 from 0.61% for 2021. The increase reflected the higher cost of interest-bearing deposits, and an increase in the average rate on borrowings due to increases in market rates in 2022. The average rate paid on interest-bearing deposits increased from 0.36% in 2021, to 0.79% in 2022. The average rate on borrowings increased from 1.17% in 2021, to 1.61% in 2022. The average balance of subordinated debentures decreased from $154.4 million in 2021, to $149.9 million in 2022, and the average rate decreased by 12 basis points, resulting in a $0.4 million decrease in corporate interest expense.

Credit Loss Expense

As a result of credit risks inherent in our lending business, we recognize an allowance for credit losses through charges to credit loss expense. These charges pertain not only to our outstanding loan portfolio, but also to off-balance sheet items, such as commitments to extend credit. Credit loss expense for our outstanding loan portfolio is recorded to the allowance for credit losses. The allowance for off-balance sheet items is included in accrued expenses and other liabilities and the allowance for uncollectible accrued interest receivable is included in accrued interest receivable.

2023 Compared to 2022

Credit loss expense for 2023 was $4.3 million, compared with a credit loss expense of $0.8 million for 2022. The 2023 credit loss expense was comprised of a $4.9 million provision for credit losses and a $0.6 million recovery for off-balance sheet items. The credit loss expense for 2022 was comprised of a $0.3 million provision for loan losses and a $0.5 million provision for off-balance sheet items. The increase in credit loss expense for 2023 compared to 2022 was mainly attributable to a $5.2 million increase in specific allowances arising from a charge-off on a $10.0 million nonperforming commercial and industrial loan in the health-care industry.

2022 Compared to 2021

The credit loss expense for 2022 was $0.8 million, compared with a credit loss recovery of $24.4 million for 2021. The credit loss expense for 2022 was comprised of a $0.3 million provision for credit losses and a $0.5 million provision for off-balance sheet items. For the year ended December 31, 2021, the credit loss expense recovery was $24.4 million and was comprised of a $24.1 million negative provision for credit losses, and a $0.2 million negative provision for off-balance sheet items. Additionally, the credit loss expense recovery included a $1.7 million negative provision for accrued interest receivable for loans currently or previously modified under the CARES Act, offset by a $1.6 million SBA guarantee repair loss allowance.

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Noninterest Income

The following table sets forth the various components of noninterest income for the years indicated:

	Year Ended December 31,
	2023			2022		2021
	(in thousands)
Service charges on deposit accounts	$	10,147		$	11,488	$	11,043
Trade finance and other service charges and fees		4,832			4,805		4,628
Servicing income		3,177			2,757		2,820
Bank-owned life insurance income		792			832		1,011
All other operating income		5,458			4,840		3,857
Service charges, fees and other		24,406			24,722		23,359
Gain on sale of SBA loans		5,701			9,478		17,266
Net gain (loss) on sales of securities		(1,871	)		—		(499	)
Gain on sale of bank premises		4,000			—		45
Legal settlement		1,943			—		325
Total noninterest income	$	34,179		$	34,200	$	40,496

2023 Compared to 2022

For the year ended December 31, 2023, noninterest income was $34.2 million, essentially unchanged from 2022. Service charges on deposit accounts decreased by $1.3 million primarily due to lower business deposit account transaction income and non-sufficient funds fees of $0.9 million and $0.4 million, respectively. The $0.7 million increase in all other operating income was primarily due to a $0.6 million increase in swap fee income. Gain on sale of SBA loans decreased $3.8 million due to lower sales volumes of $100.5 million compared with $156.1 million for 2022 and lower net premium of 7.12% compared with 7.44% for 2022. During the third quarter of 2023, a $4.0 million gain was recognized on a branch building sale-leaseback transaction. During the second quarter of 2023, there was a $1.9 million net loss on sales of $8.1 million of securities as part of a portfolio realignment as well as $1.9 million of income from a legal settlement.

2022 Compared to 2021

For the year ended December 31, 2022, noninterest income was $34.2 million, a decrease of $6.3 million, or 15.5%, compared with $40.5 million in 2021. The decrease was primarily due to a $7.8 million decrease in the gain on sale of SBA loans. The volume of SBA loans sold for the full year 2022 declined to $156.1 million from $261.8 million for the full year 2021. 2021 SBA loan sales included $132.7 million of second-draw PPP loans sold for gains of $3.0 million.

Noninterest Expense

The following table sets forth various components of noninterest expense for the years indicated:

	Year Ended December 31,
	2023			2022			2021
	(in thousands)
Salaries and employee benefits	$	81,398		$	76,140		$	72,561
Occupancy and equipment		18,340			17,648			19,075
Data processing		13,695			13,134			12,003
Professional fees		6,255			5,692			5,566
Supplies and communications		2,479			2,638			3,026
Advertising and promotion		3,105			3,637			2,649
All other operating expenses		11,306			11,386			9,870
Subtotal		136,578			130,275			124,750
Other real estate owned expense (income)		(166	)		(6	)		197
Repossessed personal property expense (income)		115			15			(492	)
Total noninterest expense	$	136,527		$	130,284		$	124,455

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2023 Compared to 2022

For the year ended December 31, 2023, noninterest expense was $136.5 million, an increase of $6.2 million, or 4.8%, compared with $130.3 million for 2022. The increase in noninterest expense was due to a $5.3 million, or 6.9%, increase in salaries and benefits, a $0.7 million increase in occupancy and equipment expense, a $0.6 million increase in professional fees and a $0.6 million increase in data processing expenses, offset partially by a $0.5 million decrease in advertising and promotion. The increase in salaries and benefits was due to annual merit increases, higher benefit costs, and a decrease in capitalized loan origination costs resulting from lower loan originations.

2022 Compared to 2021

For the year ended December 31, 2022, noninterest expense was $130.3 million, an increase of $5.8 million, or 4.7%, compared with $124.5 million for 2021. The increase in noninterest expense was mainly due to a $3.6 million, or 4.9% increase in salaries and benefits, a $1.8 million increase in other operating expenses, a $1.1 million increase in data processing expenses and a $1.0 million increase in advertising and promotion, offset partially by a $1.4 million decrease in occupancy and equipment. The increase in salaries and benefits was due to salary increases and increases in employees, as a result of increased staffing added to support the growth in loans and deposits. The number of full-time equivalent employees increased to 624 as of December 31, 2022, from 590 as of December 31, 2021. The increase in other operating expenses was due mainly to an increase in loan related expenses as a result of increased loan volume and a $0.4 million servicing asset valuation adjustment. The increase in data processing was due to increased processing costs related to higher volumes. The increase in advertising and promotion was due to services added during 2022. The decrease in occupancy and equipment was due primarily to a $1.5 million reversal of estimated property taxes in 2022.

Income Tax Expense

For the years ended December 31, 2023, 2022 and 2021, income tax expense was $34.5 million, $39.3 million and $36.8 million, respectively. The effective tax rate for the years ended December 31, 2023, 2022 and 2021 was 30.1%, 27.9% and 27.2%, respectively. The higher effective tax rate for 2023 compared with 2022 was due mainly to the increases in the permanent difference addback and valuation allowance for state net operating loss carryforwards. The higher effective tax rate for 2022 compared with 2021 was due mainly to a lower reduction in the deferred tax asset valuation allowance required for state net operating loss carryforwards and state tax credits.

Income taxes are discussed in more detail in “Notes to Consolidated Financial Statements, Note 1 — Summary of Significant Accounting Policies” and “Note 11 — Income Taxes” presented elsewhere herein.

Financial Condition

Securities Portfolio

As of December 31, 2023, our securities portfolio was composed of mortgage-backed securities, collateralized mortgage obligations, debt securities issued by U.S. government agencies and sponsored agencies and tax-exempt municipal bonds. Most of the securities carried fixed interest rates. Other than holdings of U.S. government and agency securities, there were no securities of any one issuer exceeding 10% of stockholders’ equity as of December 31, 2023, 2022 and 2021.

As of December 31, 2023, securities available for sale increased $11.9 million, or 1.4%, to $865.7 million from $853.8 million as of December 31, 2022. The increase was primarily attributable to the decrease in unrealized losses at year-end 2023 when compared with year-end 2022.

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The following table summarizes the contractual maturity schedule for securities, at amortized cost, and their cost-weighted average yield, which is calculated using amortized cost as the weight, as of December 31, 2023:

						After One Year But					After Five Years But
	Within One Year					Within Five Years					Within Ten Years					After Ten Years					Total
	Amount		Yield			Amount		Yield			Amount		Yield			Amount		Yield			Amount		Yield
	(dollars in thousands)
Securities available for sale:
U.S. Treasury securities	$	37,650		3.81	%	$	48,705		4.04	%	$	—		—	%	$	—		—	%	$	86,355		3.94	%
U.S. government agency and sponsored agency obligations:
Mortgage-backed securities - residential		9		2.86			41		3.05			24,149		3.52			480,345		1.67			504,544		1.76
Mortgage-backed securities - commercial		4,131		3.73			4,407		0.84			—		—			51,435		1.56			59,973		1.66
Collateralized mortgage obligations		—		—			189		1.28			421		2.37			106,213		2.99			106,823		2.98
Debt securities		20,731		2.49			111,484		1.15			—		—			—		—			132,215		1.36
Total U.S. government agency and sponsored agency obligations		24,871		2.70			116,121		1.14			24,570		3.50			637,993		1.88			803,555		1.85
Municipal bonds-tax exempt		—		—			—		—			23,060		1.38			54,061		1.32			77,121		1.33
Total securities available for sale	$	62,521		3.36	%	$	164,826		2.00	%	$	47,630		2.47	%	$	692,054		1.84	%	$	967,031		2.00	%

Loan Portfolio

As of December 31, 2023, 2022 and 2021, loans receivable (excluding loans held for sale), net of deferred loan costs, discounts and allowance for credit losses, were $6.11 billion, $5.90 billion and $5.08 billion, respectively, representing an increase of $217.4 million or 3.7% for 2023 and an increase of $816.6 million, or 16.1% for 2022. The $217.4 million net increase in loans for 2023 was due to production of $1.29 billion, offset by payoffs and prepayments of $1.07 billion. Loan originations in 2023 consisted of $400.8 million of commercial real estate loans, $183.4 million of commercial and industrial loans, $305.9 million of residential/consumer loans, $248.6 million of equipment financing agreements, and $149.9 million of SBA loans.

The table below shows the maturity distribution of outstanding loans (before the allowance for credit losses) as of December 31, 2023. In addition, the table shows the distribution of such loans between those with floating or variable interest rates and those with fixed or predetermined interest rates.

	Within One Year		After One Year but Within Three Years		After Three Years but Within Five Years		After Five Years but Within Fifteen Years		After Fifteen Years		Total
	(in thousands)
Real estate loans:
Commercial property
Retail	$	143,282	$	302,488	$	337,496	$	273,366	$	50,728	$	1,107,360
Hospitality		223,201		144,700		195,646		160,426		16,546		740,519
Office		44,642		304,724		187,473		31,255		6,887		574,981
Other		161,349		449,605		464,594		240,056		50,930		1,366,534
Total commercial property loans		572,474		1,201,517		1,185,209		705,103		125,091		3,789,394
Construction		90,314		7,992		2,039		—		—		100,345
Residential		4,389		79		51		4,596		953,546		962,661
Total real estate loans		667,177		1,209,588		1,187,299		709,699		1,078,637		4,852,400
Commercial and industrial loans		300,604		211,592		117,201		118,422		—		747,819
Equipment financing agreements		32,505		199,095		330,200		20,415		—		582,215
Loans receivable	$	1,000,286	$	1,620,275	$	1,634,700	$	848,536	$	1,078,637	$	6,182,434
Loans with predetermined interest rates	$	457,273	$	1,166,448	$	1,140,292	$	96,975	$	266,551	$	3,127,539
Loans with variable interest rates		543,013		453,827		494,408		751,561		812,086		3,054,895

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The table below shows the maturity distribution of outstanding loans with fixed or predetermined interest rates due after one year, as of December 31, 2023.

	After One Year but Within Three Years		After Three Years but Within Five Years		After Five Years but Within Fifteen Years		After Fifteen Years		Total
	(in thousands)
Real estate loans:
Commercial property
Retail	$	271,788	$	207,650	$	26,063	$	241	$	505,742
Hospitality		78,569		162,169		1,046		—		241,784
Office		240,043		127,410		—		—		367,453
Other		372,383		299,167		38,983		5,263		715,796
Total commercial property loans		962,783		796,396		66,092		5,504		1,830,775
Construction		—		—		—		—		—
Residential		78		—		2,574		261,047		263,699
Total real estate loans		962,861		796,396		68,666		266,551		2,094,474
Commercial and industrial loans		4,492		13,695		7,894		—		26,081
Equipment financing agreements		199,095		330,201		20,415		—		549,711
Loans receivable	$	1,166,448	$	1,140,292	$	96,975	$	266,551	$	2,670,266

The table below shows the maturity distribution of outstanding loans with floating or variable interest rates (including hybrids) due after one year, as of December 31, 2023.

	After One Year but Within Three Years		After Three Years but Within Five Years		After Five Years but Within Fifteen Years		After Fifteen Years		Total
	(in thousands)
Real estate loans:
Commercial property
Retail	$	30,700	$	129,845	$	247,302	$	50,487	$	458,334
Hospitality		66,132		33,477		159,380		16,546		275,535
Office		64,682		60,063		31,255		6,887		162,887
Other		77,222		165,427		201,073		45,668		489,390
Total commercial property loans		238,736		388,812		639,010		119,588		1,386,146
Construction		7,992		2,039		—		—		10,031
Residential		—		51		2,022		692,498		694,571
Total real estate loans		246,728		390,902		641,032		812,086		2,090,748
Commercial and industrial loans		207,099		103,506		110,529		—		421,134
Equipment financing agreements		—		—		—		—		—
Loans receivable	$	453,827	$	494,408	$	751,561	$	812,086	$	2,511,882

As of December 31, 2023, the loan portfolio included the following concentrations of loans to one type of industry that were greater than 10% of loans receivable:

	Balance as of December 31, 2023		Percentage of Loans Receivable Outstanding
	(dollars in thousands)
Lessor of nonresidential buildings	$	1,743,709		28.2	%
Hospitality	$	744,571		12.0	%

Loan Quality Indicators

Loans 30 to 89 days past due and still accruing were $10.3 million, $7.5 million and $5.9 million as of December 31, 2023, 2022 and 2021, respectively, representing an increase of $2.8 million, or 37.0%, for 2023 and an increase of $1.6 million

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or 27.4%, for 2022. The increase for 2023 was primarily attributable to a $7.6 million increase in past due and still accruing equipment financing agreements, offset by $1.4 million in reductions from equipment financing agreements brought current as well as payoffs and charge-offs of $3.9 million. At December 31, 2023, equipment financing agreements comprised 9.4% of the total loan portfolio, compared with 10.0% at December 31, 2022. Of these, 1.37% were 30 to 89 days delinquent and still accruing at December 31, 2023, compared with 1.04% at December 31, 2022.

At December 31, 2023, 2022 and 2021, there were no loans 90 days or more past due and still accruing interest.

Activity in criticized loans was as follows for the periods indicated:

	Special Mention			Classified
	(in thousands)
December 31, 2023
Balance at beginning of period	$	79,013		$	46,192
Additions		58,235			16,013
Reductions		(71,933	)		(30,838	)
Balance at end of period	$	65,315		$	31,367
December 31, 2022
Balance at beginning of period	$	95,294		$	60,633
Additions		133,134			15,808
Reductions		(149,415	)		(30,249	)
Balance at end of period	$	79,013		$	46,192

Special mention loans decreased $13.7 million, or 17.3%, to $65.3 million at December 31, 2023 from $79.0 million at December 31, 2022. The decrease in special mention loans included upgrades to pass loans of $60.0 million, downgrades to classified loans of $10.0 million and pay downs and payoffs of $1.7 million. The upgrades to pass loans were primarily attributable to a $23.5 million loan relationship in the automobile manufacturing industry and an $8.5 million commercial real estate and commercial and industrial relationship in the consumer electronics industry. The downgrades to classified loans was primarily due to a $4.8 million commercial and industrial health-care industry loan, net of a $5.2 million charge-off. The decrease in special mention loans was partially offset by downgrades from pass loans. Downgrades from pass loans included an assisted living facility construction loan of $28.0 million, a commercial and industrial digital communications industry loan of $13.9 million, and $11.5 million in other loan downgrades.

Classified loans decreased $14.8 million, or 32.1%, to $31.4 million at December 31, 2023, from $46.2 million at December 31, 2022. The decrease was primarily attributable to loan upgrades of $20.1 million, pay downs and payoffs of $5.5 million, charge-offs of $2.8 million, and loan sales of $2.4 million. Loan upgrades during 2023 consisted primarily of two commercial real estate hospitality loans of $17.2 million. The decreases were partially offset by the downgrade of a nonperforming commercial and industrial health-care industry loan totaling $4.8 million, downgrades of $6.6 million in equipment financing agreements and $4.6 million in other loan downgrades.

Nonperforming Assets

Nonperforming loans consist of loans on nonaccrual status and loans 90 days or more past due and still accruing interest. Nonperforming assets consist of nonperforming loans and OREO. Loans are placed on nonaccrual status when, in the opinion of management, the full timely collection of principal or interest is in doubt. Generally, the accrual of interest is discontinued when principal or interest payments become more than 90 days past due, unless management believes the loan is adequately collateralized and in the process of collection. However, in certain instances, we may place a particular loan on nonaccrual status earlier, depending upon the individual circumstances surrounding the delinquency of the loan. When a loan is placed on nonaccrual status, previously accrued but unpaid interest is reversed against current income. Subsequent collections of cash are applied as principal reductions when received, except when the ultimate collectability of principal is probable, in which case interest payments are credited to income. Nonaccrual loans may be restored to accrual status when principal and interest become current and full repayment is expected, which generally occurs after sustained payment of six months. Interest income is recognized on the accrual basis for loans not meeting the criteria for nonaccrual. OREO consists of properties acquired by foreclosure or similar means.

Except for nonperforming loans discussed below, management is not aware of any loans as of December 31, 2023 for which known credit problems of the borrower would cause serious doubts as to the ability of such borrowers to comply with

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their present loan repayment terms, or any known events that would result in the loan being designated as nonperforming at some future date.

Nonaccrual loans were $15.5 million and $9.8 million as of December 31, 2023 and 2022, respectively, representing an increase of $5.7 million, or 58.2%, for 2023. The increase in nonaccrual loans for 2023 resulted from additions to nonperforming loans of $12.7 million, offset by payoffs, paydowns, note sales, or upgrades of $7.0 million. At December 31, 2023, 1.25% of equipment financing agreements were on nonaccrual status compared with 0.96% at December 31, 2022. As of December 31, 2023 and 2022, all loans 90 days or more past due were classified as nonaccrual.

The $15.5 million of nonperforming loans as of December 31, 2023 had individually evaluated allowances of $3.4 million, compared with $9.8 million of nonperforming loans with individually evaluated allowances of $3.3 million as of December 31, 2022.

Nonperforming assets were $15.6 million at December 31, 2023, or 0.21% of total assets, compared with $10.0 million, or 0.14%, at December 31, 2022. Additionally, not included in nonperforming assets were repossessed personal property assets associated with equipment finance agreements of $1.3 million and $0.5 million at December 31, 2023 and 2022, respectively.

As of December 31, 2023 and 2022, OREO consisted of one property with a carrying value of $0.1 million.

Individually Evaluated Loans

The Company reviews all loans on an individual basis when they do not share similar risk characteristics with loan pools. Individually evaluated loans are measured for expected credit losses based on the present value of expected cash flows discounted at the effective interest rate, the observable market price, or the fair value of collateral.

Individually evaluated loans were $15.4 million, $9.8 million and $13.4 million as of December 31, 2023, 2022 and 2021, respectively, representing an increase of $5.6 million, or 56.8%, for 2023, and a decrease of $3.5 million, or 26.3%, for 2022. The increase primarily reflected the addition of a $10.0 million nonperforming commercial and industrial loan in the health-care industry, of which $5.2 million was charged off in 2023. Specific allowance allocations associated with individually evaluated loans increased $0.1 million to $3.4 million as of December 31, 2023, compared with $3.3 million as of December 31, 2022.

No loans were modified to borrowers with financial difficulties for which a concession was made during the years ended December 31, 2023, 2022 and 2021. A borrower is experiencing financial difficulties when there is a probability that the borrower will be in payment default on any of its debt in the foreseeable future without the modification. The Company has granted a concession by providing principal forgiveness, a term extension, an other-than-insignificant payment delay, or an interest rate reduction.

Allowance for Credit Losses and Allowance for Credit Losses Related to Off-Balance Sheet Items

The Company’s estimate of the allowance for credit losses at December 31, 2023 and 2022 reflected losses expected over the remaining contractual life of the assets based on historical, current, and forward-looking information. The contractual term does not consider extensions, renewals or modifications.

Management selected three loss methodologies for the collective allowance estimation. At December 31, 2023, the Company used the discounted cash flow (“DCF”) method to estimate allowances for credit losses for the commercial and industrial loan portfolio, the Probability of Default/Loss Given Default (“PD/LGD”) method for the commercial property, construction and residential property portfolios, and the Weighted Average Remaining Maturity (“WARM”) method to estimate expected credit losses for equipment financing agreements. Loans that do not share similar risk characteristics are individually evaluated for allowances.

For all loan pools utilizing the DCF method, the Company determined that four quarters represented a reasonable and supportable forecast period and reverted to a historical loss rate over twelve quarters on a straight-line basis. For each of these loan segments, the Company applied an annualized historical PD/LGD using all available historical periods. Since reasonable and supportable forecasts of economic conditions are embedded directly into the DCF model, qualitative adjustments are considered but were minimal.

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For loan pools utilizing the PD/LGD method, the Company used historical periods that included an economic downturn to derive historical losses for better alignment in the estimation of expected losses under the PD/LGD method. The Company relied on Frye-Jacobs modeled LGD rates for loan segments with insufficient historical loss data. The Frye-Jacobs model provides a means of applying an LGD rate in the event that limited to no loss data is available. The PD/LGD method incorporates a forecast into loss estimates using a qualitative adjustment.

The Company used the WARM method to estimate expected credit losses for the equipment financing agreements portfolio. The Company applied an expected loss ratio based on internal historical losses adjusted as appropriate for qualitative factors.

For the years ended December 31, 2023 and 2022, the Company relied on the economic projections from Moody’s to inform its loss driver forecasts over the four-quarter forecast period. For all loan pools, the Company utilizes and forecasts the national unemployment rate as the primary loss driver.

The methodology for calculating the allowance for credit losses is discussed in more detail in “Notes to Consolidated Financial Statements, Note 1 — Summary of Significant Accounting Policies.”

To adjust the historical and forecast periods to current conditions, the Company applies various qualitative factors derived from market, industry or business specific data, changes in the underlying portfolio composition, trends relating to credit quality, delinquent and nonperforming loans and adversely-rated equipment financing agreements, and reasonable and supportable forecasts of economic conditions.

The table below presents the allowance for credit losses by portfolio segment as a percentage of the total allowance for credit losses and loans by portfolio segment as a percentage of the aggregate investment of loans receivable for the periods presented:

	As of December 31,
	2023										2022
	Allowance Amount		Percentage of Total Allowance			Total Loans		Percentage of Total Loans			Allowance Amount		Percentage of Total Allowance			Total Loans		Percentage of Total Loans
	(dollars in thousands)
Real estate loans:
Commercial property
Retail	$	10,264		14.8	%	$	1,107,360		17.9	%	$	7,872		11.0	%	$	1,023,608		17.2	%
Hospitality		15,534		22.4			740,519		12.0			13,407		18.7			646,893		10.8
Office		3,024		4.4			574,981		9.3			2,293		3.2			499,946		8.4
Other		8,663		12.4			1,366,534		22.1			13,056		18.3			1,553,729		26.0
Total commercial property loans		37,485		54.0			3,789,394		61.3			36,628		51.2			3,724,176		62.4
Construction		2,756		4.0			100,345		1.6			4,022		5.7			109,205		1.8
Residential		5,258		7.5			962,661		15.6			3,376		4.7			734,472		12.4
Total real estate loans		45,499		65.5			4,852,400		78.5			44,026		61.6			4,567,853		76.6
Commercial and industrial loans		10,257		14.8			747,819		12.1			15,267		21.3			804,492		13.4
Equipment financing agreements		13,706		19.7			582,215		9.4			12,230		17.1			594,788		10.0
Total	$	69,462		100.0	%	$	6,182,434		100.0	%	$	71,523		100.0	%	$	5,967,133		100.0	%

The following table sets forth certain information regarding certain ratios related to our allowance for credit losses for the periods presented:

	As of and for the Year Ended December 31,
	2023			2022			2021
	(dollars in thousands)
Ratios:
Allowance for credit losses to loans		1.12	%		1.20	%		1.41	%
Nonaccrual loans to loans		0.25	%		0.17	%		0.26	%
Allowance for credit losses to nonaccrual loans		448.89	%		726.42	%		543.09	%
Balance:
Nonaccrual loans at end of period	$	15,474		$	9,846		$	13,360
Nonperforming loans at end of period	$	15,474		$	9,846		$	13,360

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The allowance for credit losses was $69.5 million at December 31, 2023 compared with $71.5 million at December 31, 2022. The allowance for credit losses as a percentage of loans decreased to 1.12% as of December 31, 2023 from 1.20% as of December 31, 2022. The allowance attributed to loans individually evaluated was $3.4 million at December 31, 2023 compared with $3.3 million at December 31, 2022. The allowance attributed to loans collectively evaluated was $66.1 million at December 31, 2023, compared with $68.2 million at December 31, 2022. The decrease principally reflected the reduction of required reserves due to upgrades during the year ended December 31, 2023 of loans previously adversely affected by the pandemic.

The following table presents a summary of net charge-offs (recoveries) for the loan portfolio:

	For the year ended December 31,
	2023								2022								2021
	Average Loans		Net (Charge-offs) Recoveries			Net (Charge-offs) Recoveries to Average Loans			Average Loans		Net (Charge-offs) Recoveries			Net (Charge-offs) Recoveries to Average Loans			Average Loans		Net (Charge-offs) Recoveries			Net (Charge-offs) Recoveries to Average Loans
	(dollars in thousands)
Commercial real estate loans	$	3,769,283	$	(322	)		(0.01	)%	$	3,833,043	$	(1,041	)		(0.03	)%	$	3,364,940	$	420			0.01	%
Construction loans		—		—			—			—		—			—			68,851		8,954			13.00
Residential loans		873,904		7			0.00			541,975		3			—			344,698		6			—
Commercial and industrial loans		729,382		432			0.06			686,042		654			0.10			580,220		351			0.06
Equipment financing agreements		595,770		(7,160	)		(1.20	)		535,504		(990	)		(0.18	)		435,797		(3,454	)		(0.79	)
Total	$	5,968,339	$	(7,043	)		(0.12	)%	$	5,596,564	$	(1,374	)		(0.02	)%	$	4,794,506	$	6,277			0.13	%

For the year ended December 31, 2023, gross charge-offs were $16.1 million, an increase of $11.4 million, or 240.7%, from $4.7 million for 2022, and gross recoveries were $9.0 million, an increase of $5.7 million, or 170.2%, from $3.3 million for 2022. Net loan charge-offs were $7.0 million, or 0.12% of average loans, compared with net loan charge-offs of $1.4 million, or 0.02% of average loans and net loan charge-offs of $6.3 million or 0.13% of average loans, respectively, for the years ended December 31, 2023, 2022 and 2021. Gross charge-offs for the year ended December 31, 2023 consisted of the $5.2 million charge-off on a nonperforming commercial and industrial loan in the health-care industry, the $1.0 million charge-off on a nonperforming commercial and industrial loan, and $8.8 million of charge-offs of equipment financing arrangements. Gross recoveries for the year ended December 31, 2023 primarily consisted of a $6.8 million recovery from a troubled loan relationship in 2019.

The allowance for off-balance sheet exposure, as of December 31, 2023, 2022 and 2021 was $2.5 million, $3.1 million and $2.6 million, respectively, representing a decrease of $0.6 million, or 20.6%, in 2023, and an increase of $0.5 million, or 20.4%, in 2022. The Bank closely monitors the borrower’s repayment capabilities, while funding existing commitments to ensure losses are minimized. Based on management’s evaluation and analysis of portfolio credit quality and prevailing economic conditions, we believe these allowances were adequate for losses inherent in the loan portfolio and off-balance sheet exposure as of December 31, 2023.

Deposits

The following table shows the composition of deposits by type as of the dates indicated:

	As of December 31,
	2023					2022					2021
	Balance		Percent			Balance		Percent			Balance		Percent
	(dollars in thousands)
Demand – noninterest-bearing	$	2,003,596		31.9	%	$	2,539,602		41.3	%	$	2,574,517		44.5	%
Interest-bearing:
Demand		87,452		1.4			115,573		1.9			125,183		2.2
Money market and savings		1,734,659		27.6			1,556,690		25.2			2,099,381		36.2
Uninsured amount of time deposits more than $250,000:
Three months or less		186,321		3.0			44,828		0.7			69,464		1.2
Over three months through six months		201,085		3.2			123,471		2.0			73,808		1.3
Over six months through twelve months		222,683		3.5			191,248		3.1			29,706		0.5
Over twelve months		70,932		1.1			138,451		2.2			549		—
All other insured time deposits		1,773,846		28.2			1,458,209		23.6			813,661		14.1
Total deposits	$	6,280,574		100.0	%	$	6,168,072		100.0	%	$	5,786,269		100.0	%

Total deposits were $6.28 billion, $6.17 billion and $5.79 billion as of December 31, 2023, 2022 and 2021, respectively, representing an increase of $112.5 million, or 1.8%, for 2023, and an increase of $381.8 million, or 6.6%, for 2022. The increase

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in total deposits for 2023 was primarily attributable to an increase of $498.7 million in time deposits and an increase of $178.0 million in money market and savings accounts, offset by a decrease of $536.0 million in non-interest bearing demand deposits. The changes in the deposit composition from 2022 to 2023 were primarily due to the increase in deposit rates. At December 31, 2023, the loan-to-deposit ratio was 98.4% compared with 96.7% at December 31, 2022.

The average balance of deposits for the years ended December 31, 2023, 2022 and 2021 were $6.19 billion, $5.95 billion and $5.56 billion, respectively. The average balance of deposits increased 4.0%, 7.0% and 12.4% in 2023, 2022 and 2021, respectively.

As of December 31, 2023, the aggregate amount of uninsured deposits (deposits in amounts greater than $250,000, which is the maximum amount for federal deposit insurance) was $2.52 billion. The aggregate amount of our uninsured time deposits was $681.0 million. Other uninsured deposits, such as demand deposits and money market and savings deposits were $1.84 billion. In addition, $1.09 billion of total uninsured deposits were in accounts with balances of $5.0 million or more at December 31, 2023.

The Bank’s wholesale funds historically consisted of FHLB advances, brokered deposits, as well as State of California time deposits. As of December 31, 2023 and 2022, the Bank had $325.0 million and $350.0 million of FHLB advances, $58.3 million and $83.3 million of brokered deposits, and $120.0 million and $120.0 million of State of California time deposits, respectively.

Borrowings and Subordinated Debentures

Borrowings mostly take the form of FHLB advances. At December 31, 2023, FHLB advances were $325.0 million, a decrease of $25.0 million from $350.0 million at December 31, 2022. Funds from deposit growth not used to fund loan production were used to pay off borrowings. At December 31, 2023, the Bank had $112.5 million in term advances and $212.5 million in FHLB open advances. FHLB term advances and open advances were $100.0 million and $250.0 million, respectively, at December 31, 2022.

The following is a summary of contractual maturities of FHLB advances greater than twelve months:

	December 31, 2023					December 31, 2022
FHLB of San Francisco	Outstanding Balance		Weighted Average Rate			Outstanding Balance		Weighted Average Rate
	(dollars in thousands)
Advances due over 12 months through 24 months	$	12,500		1.90	%	$	37,500		0.40	%
Advances due over 24 months through 36 months		62,500		4.37			12,500		1.90
Outstanding advances over 12 months	$	75,000		3.96	%	$	50,000		0.78	%

The following is financial data pertaining to FHLB advances:

	As of December 31,
	2023			2022			2021
	(dollars in thousands)
Weighted-average interest rate at end of year		4.69	%		3.57	%		1.05	%
Weighted-average interest rate during the year		3.48	%		1.52	%		1.17	%
Average balance of FHLB advances	$	197,390		$	148,027		$	145,277
Maximum amount outstanding at any month-end	$	450,000		$	350,000		$	162,500

Subordinated debentures were $130.0 million as of December 31, 2023 and $129.4 million as of December 31, 2022. Subordinated debentures were comprised of fixed-to-floating subordinated notes of $108.3 million and $108.2 million as of December 31, 2023 and 2022, respectively, and junior subordinated deferrable interest debentures of $21.7 million and $21.2 million as of December 31, 2023 and 2022, respectively. See “Note 10 - Subordinated Debentures” to the consolidated financial statements for more details.

Stockholder's Equity

Stockholders’ equity at December 31, 2023 was $701.9 million, an increase of $64.4 million from $637.5 million at December 31, 2022. The increase during 2023 includes a $16.8 million increase in unrealized after-tax gain on securities available for sale due to changes in intermediate-term interest rates. 2023 net income, net of $30.5 million of dividends paid,

44

added $49.5 million to stockholders' equity for the period. In addition, Hanmi repurchased 250,000 shares during 2023 at an average share price of $16.34 for a total cost of $4.1 million. At December 31, 2023, 409,972 shares remain under the Company’s share repurchase program.

Interest Rate Risk Management

The financial performance of the Company is impacted by changes in interest rates because the Company's primary source of income is derived from earning a spread between the interest income it receives on its interest-earning assets and the interest expense it pays on its interest-bearing liabilities, its net interest income. We emphasize capital protection through stable earnings rather than maximizing yield. In order to achieve stable earnings, we prudently manage our assets and liabilities and closely monitor the percentage changes in net interest income and equity value in relation to limits established within our guidelines.

The Company performs simulation modeling to measure sensitivity of its interest-earning assets and interest-bearing liabilities to changes in interest rates. It consists of forecasting the net interest income and measuring the economic value of equity in scenarios of instantaneous parallel shifts in the yield curve, and measuring changes from the current rate scenario. The following table summarizes the results as of December 31, 2023. The results are compared to policy limits, which for net interest income, specify the maximum tolerance level over a 1- to 12-month and a 13- to 24-month horizon.

	Net Interest Income Simulation
Change in	1- to 12-Month Horizon						13- to 24-Month Horizon
Interest	Dollar			Percentage			Dollar			Percentage
Rate	Change			Change			Change			Change
	(dollars in thousands)
300%	$	(1,869	)		(0.84	%)	$	4,454			1.75	%
200%	$	(2,029	)		(0.92	%)	$	843			0.33	%
100%	$	(56	)		(0.03	%)	$	2,528			0.99	%
(100%)	$	(1,703	)		(0.77	%)	$	(6,482	)		(2.55	%)
(200%)	$	(5,147	)		(2.32	%)	$	(16,981	)		(6.68	%)
(300%)	$	(10,084	)		(4.55	%)	$	(31,131	)		(12.24	%)

	Economic Value of Equity (EVE)
Change in
Interest	Dollar			Percentage
Rate	Change			Change
	(dollars in thousands)
300%	$	(56,333	)		(8.51	%)
200%	$	(39,880	)		(6.02	%)
100%	$	(10,210	)		(1.54	%)
(100%)	$	(8,396	)		(1.27	%)
(200%)	$	(38,669	)		(5.84	%)
(300%)	$	(92,019	)		(13.90	%)

The estimated sensitivity does not necessarily represent our forecast, and the results may not be indicative of actual changes to our net interest income. These estimates are based upon a number of assumptions, including the timing and magnitude of interest rate changes, prepayments on loans receivable and securities, pricing strategies on loans receivable and deposits, and replacement of asset and liability cash flows.

The key assumptions, based upon loans receivable, securities and deposits, are as follows:

Conditional prepayment rates*:
Loans receivable	15	%
Securities	6	%
Deposit rate betas*:
NOW, savings, money market demand	48	%
Time deposits, retail and wholesale	76	%
* Balance-weighted average

45

While the assumptions used are based on current economic and local market conditions, there is no assurance as to the predictive nature of these conditions, including how customer preferences or competitor influences might change.

Capital Resources and Liquidity

Capital Resources

Historically, our primary source of capital has been the retention of operating earnings. In order to ensure adequate levels of capital, management periodically assesses projected sources and uses of capital in conjunction with projected increases in assets and levels of risk. Management considers, among other things, earnings generated from operations, and access to capital from financial markets through the issuance of additional securities, including common stock or notes, to meet our capital needs.

The Company’s ability to pay dividends to shareholders depends in part upon dividends it receives from the Bank. California law restricts the amount available for cash dividends to the lesser of a bank’s retained earnings or net income for its last three fiscal years (less any distributions to shareholders made during such period). Where the above test is not met, cash dividends may still be paid, with the prior approval of the DFPI, in an amount not exceeding the greatest of: (1) retained earnings of the Bank; (2) net income of the Bank for its last fiscal year; or (3) the net income of the Bank for its current fiscal year. The Company paid $30.5 million ($1.00 per share), $28.6 million ($0.94 per share), and $16.5 million ($0.54 per share) in dividends in 2023, 2022, and 2021, respectively. As of January 1, 2024, after giving effect to the 2024 first quarter dividend declared by the Company, the Bank has the ability to pay $174.5 million of dividends without the prior approval of the Commissioner of the DFPI.

At December 31, 2023, the Bank’s total risk-based capital ratio was 14.27%, Tier 1 risk-based capital ratio was 13.26%, common equity Tier 1 capital ratio was 13.26%, and Tier 1 leverage capital ratio was 11.32%, placing the Bank in the “well capitalized” category, which is defined as institutions with total risk-based capital ratio equal to or greater than 10.00%, Tier 1 risk-based capital ratio equal to or greater than 8.00%, common equity Tier 1 capital ratio of 6.50%, and Tier 1 leverage capital ratio equal to or greater than 5.00%.

At December 31, 2023, the Company’s total risk-based capital ratio, Tier 1 risk-based capital ratio, common equity Tier 1 capital ratio and Tier 1 leverage capital ratio were 14.95%, 12.20%, 11.86%, and 10.37%, respectively, all of which exceeded the Company’s regulatory capital ratio requirements.

For a discussion of recently implemented changes to the capital adequacy framework prompted by Basel III and the Dodd-Frank Act, see “Note 13 — Regulatory Matters” of Notes to Consolidated Financial Statements in this Report.

Liquidity

The Bank has Contingency Funding Plan (“CFP”) designed to ensure that liquidity sources are sufficient to meet its ongoing obligations and commitments, particularly in the event of a liquidity contraction. The CFP provides a framework for management and other critical personnel to follow in the event of a liquidity contraction or in anticipation of such an event. Management believes that Hanmi Financial, on a stand-alone basis, had adequate liquid assets to meet its current debt obligations.

For a discussion of our liquidity position, see “Note 22 - Liquidity” of Notes to Consolidated Financial Statements in this Report.

Off-Balance Sheet Arrangements

For a discussion of off-balance sheet arrangements, see “Note 19 — Off-Balance Sheet Commitments” of Notes to Consolidated Financial Statements and “Item 1. Business — Off-Balance Sheet Commitments” in this Report.

Item 7A. Quantitative and Qualitative Disclosures about Market Risk

For quantitative and qualitative disclosures regarding market risks in the Bank’s portfolio, see “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations — Interest Rate Risk Management” and “— Capital Resources and Liquidity.”

46

Item 8. Financial Statements and Supplementary Data

The financial statements required to be filed as a part of this Report are set forth on pages 51 through 104.

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

None.

Item 9A. Controls and Procedures

Disclosure Controls and Procedures

As of December 31, 2023, Hanmi Financial carried out an evaluation of the effectiveness of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, under the supervision and with the participation of our senior management, including our Chief Executive Officer (principal executive officer) and our Chief Financial Officer (principal financial officer). The purpose of the disclosure controls and procedures is to ensure that information required to be disclosed in the reports that are filed or submitted under the Exchange Act, is recorded, processed, summarized and reported, within the time periods specified in the SEC rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.

Based upon that evaluation, the Company’s principal executive officer and principal financial officer concluded that as of December 31, 2023, the Company’s disclosure controls and procedures were effective in ensuring that the information required to be disclosed by the Company in the reports it files or submits under the Exchange Act is (i) accumulated and communicated to the Company’s management (including the Principal Executive Officer and Principal Financial Officer) to allow timely decisions regarding required disclosure, and (ii) recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.

Management’s Annual Report on Internal Control Over Financial Reporting

The management of Hanmi Financial is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Hanmi Financial’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the financial statements for external purposes in accordance with GAAP. Internal control over financial reporting includes those policies and procedures that:

•pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the Company’s assets;

•provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. GAAP;

•provide reasonable assurance that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and

•provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Management assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2023. Management based this assessment on criteria for effective internal control over financial reporting described in Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). Management’s assessment included an evaluation of the design of Hanmi Financial’s internal control over financial reporting and testing of the operational effectiveness of its internal control over financial reporting. Management reviewed the results of its assessment with the Audit Committee of our Board of Directors. Based on this assessment, management concluded that Hanmi Financial maintained effective internal control over financial reporting as of December 31, 2023.

47

Changes in Internal Control Over Financial Reporting

There have been no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) or 15d-15(f) of the Exchange Act) that occurred during the fourth quarter of fiscal 2023 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

Attestation Report of the Company’s Independent Registered Public Accounting Firm

Crowe LLP, the independent registered public accounting firm that audited and reported on the Consolidated Financial Statements of Hanmi Financial and its subsidiaries, has issued an audit report on the effectiveness of Hanmi Financial’s internal control over financial reporting as of December 31, 2023 in accordance with the standards of Public Company Accounting Oversight Board (United States).

Item 9B. Other Information

Not applicable.

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

Not applicable.

48

Part III

Item 10. Directors, Executive Officers and Corporate Governance

The information required by this Item is incorporated herein by reference to the sections of Hanmi Financial Corporation’s Definitive Proxy Statement to be filed with the SEC in connection with its 2024 Annual Meeting of Stockholders (the “2024 Proxy Statement”) entitled “Election of Directors,” “Corporate Governance Principles and Board Matters,” “Executive Compensation — Officers” and “Beneficial Ownership of Principal Stockholders and Management — Delinquent Section 16(a) Reports.”

The Company maintains in effect a Code of Business Conduct and Ethics for all employees, executive officers and directors. The codes of conduct are available on the Company’s website www.hanmi.com on the “Investors Relations” page and is also available to any person without charge by sending a request to the Corporate Secretary at 900 Wilshire Boulevard, Suite 1250, Los Angeles, California 90017.

Item 11. Executive Compensation

The information required by this Item is incorporated herein by reference to the sections of the 2024 Proxy Statement entitled “Corporate Governance and Board Matters — Director Compensation,” “— CHR Committee Interlocks and Insider Participation” and “Executive Compensation.”

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Information concerning security ownership of certain beneficial owners and management not otherwise included herein is incorporated by reference to the 2024 Proxy Statement under the heading “Beneficial Ownership of Principal Stockholders and Management.”

Securities Authorized for Issuance under Equity Compensation Plans

The following table sets forth the total number of shares available for issuance under the Company’s equity compensation plans as of December 31, 2023:

Plan category	Number of securities to be issued upon exercise of outstanding options, warrants and rights (a)		Weighted-average exercise price of outstanding options, warrants and rights		Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))
Equity compensation plans approved by security holders		61,000	$	22.73		1,116,555
Equity compensation plans not approved by security holders		—		—		—
Total equity compensation plans		61,000	$	22.73		1,116,555

Item 13. Certain Relationships and Related Transactions, and Director Independence

The information required by this Item is incorporated herein by reference to the sections of the 2024 Proxy Statement entitled “Corporate Governance and Board Matters — Director Independence” and “Certain Relationships and Related Transactions.”

Item 14. Principal Accounting Fees and Services

The information required by this Item is incorporated herein by reference to the section of the 2024 Proxy Statement entitled “Ratification of the Appointment of the Independent Registered Public Accounting Firm” and “Audit and Non-Audit Fees.”

49

Part IV

Item 15. Exhibits and Financial Statement Schedules

(1)The financial statements are listed in the Index to consolidated financial statements of this Report.

(2)All financial statement schedules have been omitted, as the required information is not applicable, not material or has been included in the notes to consolidated financial statements.

(3)The exhibits required to be filed with this Report are listed in the exhibit index included herein.

Item 16. Form 10-K Summary

None.

50

Hanmi Financial Corporation and Subsidiaries

Index to Consolidated Financial Statements

	Page
Report of Independent Registered Public Accounting Firm (PCAOB ID Number 173)	52
Consolidated Balance Sheets as of December 31, 2023 and 2022	55
Consolidated Statements of Income for the Years Ended December 31, 2023, 2022 and 2021	56
Consolidated Statements of Comprehensive Income for the Years Ended December 31, 2023, 2022 and 2021	57
Consolidated Statements of Changes in Stockholders’ Equity for the Years Ended December 31, 2023, 2022 and 2021	58
Consolidated Statements of Cash Flows for the Years Ended December 31, 2023, 2022 and 2021	59
Notes to Consolidated Financial Statements	60

51

Report of Independent Registered Public Accounting Firm

Shareholders and the Board of Directors of Hanmi Financial Corporation and Subsidiaries

Los Angeles, California

Opinions on the Financial Statements and Internal Control over Financial Reporting

We have audited the accompanying consolidated balance sheets of Hanmi Financial Corporation and Subsidiaries (the “Company”) as of December 31, 2023 and 2022, the related consolidated statements of income, comprehensive income, changes in stockholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2023, and the related notes (collectively referred to as the “financial statements”). We also have audited the Company’s internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control – Integrated Framework: (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2023 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control – Integrated Framework: (2013) issued by COSO.

Basis for Opinions

The Company’s management is responsible for these financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Annual Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s financial statements and an opinion on the Company’s internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.

Our audits of the financial statements included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

52

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Allowance for Credit Losses on Loans - Probability of Default / Loss Given Default Model

The allowance for credit losses on loans (as described in Note 1) is an estimate of expected credit losses, measured over the contractual life of the loans based on historical, current, and forward-looking information. The Company reported a gross loan portfolio of $6.1 billion and a related allowance for credit losses (ACL) on loans of $69.5 million at December 31, 2023. The Company employed a Probability of Default / Loss Given Default (PD/LGD) method for the commercial property, construction, and residential real estate property portfolios. At December 31, 2023, the PD/LGD model was applied to 79% of the loan portfolio.

The PD and LGD assumptions are largely based on internal default and loss history but may employ the use of third-party proxy loan information when insufficient loss history exists internally. The use of proxy loan information requires significant judgment to assess expected performance of the credit portfolio.

We consider the Company’s allowance for credit losses on loans for the portion of the portfolio using the PD/LGD model a critical audit matter, particularly as it pertains to management’s judgments employed in the application of the regression model. Auditing management’s PD/LGD model involved especially subjective auditor judgment in applying and evaluating audit procedures and required significant effort, including the need to involve firm valuation specialists.

The primary procedures we performed to address this critical audit matter included:

•Testing the design and operating effectiveness of controls over the application of the assumptions used to support the PD/LGD model including controls addressing:

oThe completeness and accuracy of internal data

oRelevance and reliability of peer data used in the Frye-Jacobs estimation technique that impacts the regression model supporting the PD/LGD forecast

oThird-party model validation

oReasonableness of management’s judgments and significant assumptions over significant inputs

•Substantively testing management's process, including evaluating management’s judgments and assumptions, for developing the estimate of the allowance for credit losses derived with the PD/LGD model, which included:

oTesting management’s methodology and conceptual soundness of the PD/LGD model, for which we used Crowe LLP valuation specialists to assist with evaluating the third-party regression models used in forecasting and loss-driver analysis, and validation of inputs to the model;

oEvaluating the reasonableness of management’s judgments over the selection of proxy loan information when applicable, including evaluating whether judgments were applied as described within the model;

oEvaluating the reasonableness of management’s judgments over the application of reasonable and supportable forecasts, determination of the forecast period and reversion periods, and evaluating the relevance and reliability of external data used to inform management’s judgments;

53

oEvaluating the procedures and results of the Company’s third-party model validation, as well as management’s responses to results.

/s/ Crowe LLP

We have served as the Company's auditor since 2019.

Los Angeles, California

February 29, 2024

54

Hanmi Financial Corporation and Subsidiaries

Consolidated Balance Sheets

(in thousands except share data)

	December 31,
	2023			2022
Assets
Cash and due from banks	$	302,324		$	352,421
Securities available for sale, at fair value (amortized cost of $967,031 and $978,796 as of December 31, 2023 and 2022, respectively)		865,739			853,838
Loans held for sale, at the lower of cost or fair value		12,013			8,043
Loans receivable, net of allowance for credit losses of $69,462 and $71,523 as of December 31, 2023 and 2022, respectively		6,112,972			5,895,610
Accrued interest receivable		23,371			18,537
Premises and equipment, net		21,959			22,850
Customers' liability on acceptances		625			328
Servicing assets		7,070			7,176
Goodwill and other intangible assets, net		11,099			11,225
Federal Home Loan Bank ("FHLB") stock, at cost		16,385			16,385
Income tax assets		35,226			51,924
Bank-owned life insurance		56,335			55,544
Prepaid expenses and other assets		105,223			84,381
Total assets	$	7,570,341		$	7,378,262
Liabilities and Stockholders’ Equity
Liabilities:
Deposits:
Noninterest-bearing	$	2,003,596		$	2,539,602
Interest-bearing		4,276,978			3,628,470
Total deposits		6,280,574			6,168,072
Accrued interest payable		39,306			7,792
Bank's liability on acceptances		625			328
Borrowings		325,000			350,000
Subordinated debentures ($136,800 and $136,800 face amount less unamortized discount and debt issuance costs of $6,788 and $7,391 as of December 31, 2023 and 2022, respectively)		130,012			129,409
Accrued expenses and other liabilities		92,933			85,146
Total liabilities		6,868,450			6,740,747
Stockholders’ equity:
Preferred Stock, $0.001 par value; authorized 10,000,000 shares; no shares issued as of December 31, 2023 and December 31, 2022		—			—
Common stock, $0.001 par value; authorized 62,500,000 shares; issued 33,918,035 shares (30,368,655 shares outstanding) and 33,708,234 shares (30,485,621 shares outstanding) as of December 31, 2023 and 2022, respectively		34			33
Additional paid-in capital		586,912			583,410
Accumulated other comprehensive loss, net of tax benefit of $29,058 and $35,973 as of December 31, 2023 and 2022, respectively		(71,928	)		(88,985	)
Retained earnings		319,048			269,542
Less: treasury stock; 3,549,380 shares and 3,222,613 shares as of December 31, 2023 and 2022, respectively		(132,175	)		(126,485	)
Total stockholders’ equity		701,891			637,515
Total liabilities and stockholders’ equity	$	7,570,341		$	7,378,262

See Accompanying Notes to Consolidated Financial Statements.

55

Hanmi Financial Corporation and Subsidiaries

Consolidated Statements of Income

(in thousands, except share and per share data)

	Year Ended December 31,
	2023			2022		2021
Interest and dividend income:
Interest and fees on loans receivable	$	339,811		$	257,878	$	208,602
Interest on securities		16,938			12,351		6,230
Dividends on FHLB stock		1,229			1,024		941
Interest on deposits in other banks		11,350			2,560		902
Total interest and dividend income		369,328			273,813		216,675
Interest expense:
Interest on deposits		134,708			25,938		11,655
Interest on borrowings		6,867			2,249		1,697
Interest on subordinated debentures		6,482			7,979		8,273
Total interest expense		148,057			36,166		21,625
Net interest income before credit loss expense		221,271			237,647		195,050
Credit loss expense (recovery)		4,342			836		(24,403	)
Net interest income after credit loss expense (recovery)		216,929			236,811		219,453
Noninterest income:
Service charges on deposit accounts		10,147			11,488		11,043
Trade finance and other service charges and fees		4,832			4,805		4,628
Gain on sale of SBA loans		5,701			9,478		17,266
Net gain (loss) on sales of securities		(1,871	)		—		(499	)
Other operating income		15,370			8,429		8,058
Total noninterest income		34,179			34,200		40,496
Noninterest expense:
Salaries and employee benefits		81,398			76,140		72,561
Occupancy and equipment		18,340			17,648		19,075
Data processing		13,695			13,134		12,003
Professional fees		6,255			5,692		5,566
Supplies and communications		2,479			2,638		3,026
Advertising and promotion		3,105			3,637		2,649
Other operating expenses		11,255			11,395		9,575
Total noninterest expense		136,527			130,284		124,455
Income before tax		114,581			140,727		135,494
Income tax expense		34,540			39,333		36,817
Net income	$	80,041		$	101,394	$	98,677
Basic earnings per share	$	2.63		$	3.33	$	3.22
Diluted earnings per share	$	2.62		$	3.32	$	3.22
Weighted-average shares outstanding:
Basic		30,269,740			30,299,148		30,393,559
Diluted		30,330,258			30,392,057		30,471,747

See Accompanying Notes to Consolidated Financial Statements.

56

Hanmi Financial Corporation and Subsidiaries

Consolidated Statements of Comprehensive Income

(in thousands)

	Year Ended December 31,
	2023			2022			2021
Net income	$	80,041		$	101,394		$	98,677
Other comprehensive income (loss), net of tax:
Unrealized gain (loss):
Unrealized holding gain (loss) arising during period		21,795			(113,094	)		(17,185	)
Unrealized gain on cash flow hedge		306			—			—
Unrealized gain (loss)		22,101			(113,094	)		(17,185	)
Income tax benefit (expense) related to items of other comprehensive income		(6,351	)		32,552			5,303
Other comprehensive income (loss), net of tax		15,750			(80,542	)		(11,882	)
Reclassification adjustment for losses included in net earnings		1,871			—			499
Income tax benefit related to reclassification adjustment		(564	)		—			(136	)
Reclassification adjustment for losses included in net earnings, net of tax		1,307			—			363
Other comprehensive income (loss), net of tax		17,057			(80,542	)		(11,519	)
Total comprehensive income	$	97,098		$	20,852		$	87,158

See Accompanying Notes to Consolidated Financial Statements.

57

Hanmi Financial Corporation and Subsidiaries

Consolidated Statements of Changes in Stockholders’ Equity

(in thousands, except share data)

	Common Stock - Number of Shares								Stockholders' Equity
													Accumulated
											Additional		Other						Treasury			Total
	Shares		Treasury			Shares			Common		Paid-in		Comprehensive			Retained			Stock,			Stockholders’
	Issued		Shares			Outstanding			Stock		Capital		Income (Loss)			Earnings			at Cost			Equity
Balance at December 31, 2020		33,560,801		(2,842,966	)		30,717,835		$	33	$	578,360	$	3,076		$	114,621		$	(119,046	)	$	577,044
Issuance of awards pursuant to equity incentive plans, net of forfeitures		43,038		—			43,038			—		—		—			—			—			—
Share-based compensation expense		—		—			—			—		2,436		—			—			—			2,436
Shares surrendered to satisfy tax liability upon vesting of equity awards		—		(24,953	)		(24,953	)		—		—		—			—			(572	)		(572	)
Repurchase of common stock		—		(328,659	)		(328,659	)		—		—		—			—			(6,135	)		(6,135	)
Cash dividends paid (common stock, $0.54/share)		—		—			—			—		—		—			(16,514	)		—			(16,514	)
Net income		—		—			—			—		—		—			98,677			—			98,677
Change in unrealized gain (loss) on securities available for sale, net of income taxes		—		—			—			—		—		(11,519	)		—			—			(11,519	)
Balance at December 31, 2021		33,603,839		(3,196,578	)		30,407,261		$	33	$	580,796	$	(8,443	)	$	196,784		$	(125,753	)	$	643,417
Stock options exercised		—		1,500			1,500			—		19		—			—			—			19
Issuance of awards pursuant to equity incentive plans, net of forfeitures		104,395		—			104,395			—		—		—			—			—			—
Share-based compensation expense		—		—			—			—		2,595		—			—			—			2,595
Shares surrendered to satisfy tax liability upon vesting of equity awards		—		(27,535	)		(27,535	)		—		—		—			—			(732	)		(732	)
Cash dividends paid (common stock, $0.94/share)		—		—			—			—		—		—			(28,636	)		—			(28,636	)
Net income		—		—			—			—		—		—			101,394			—			101,394
Change in unrealized gain (loss) on securities available for sale, net of income taxes		—		—			—			—		—		(80,542	)		—			—			(80,542	)
Balance at December 31, 2022		33,708,234		(3,222,613	)		30,485,621		$	33	$	583,410	$	(88,985	)	$	269,542		$	(126,485	)	$	637,515
Stock options exercised		50,000		(35,273	)		14,727			—		821		—			—			(821	)		—
Issuance of awards pursuant to equity incentive plans, net of forfeitures		159,801		—			159,801			1		—		—			—			—			1
Share-based compensation expense		—		—			—			—		2,681		—			—			—			2,681
Shares surrendered to satisfy tax liability upon vesting of equity awards		—		(41,494	)		(41,494	)		—		—		—			—			(785	)		(785	)
Repurchase of common stock		—		(250,000	)		(250,000	)		—		—		—			—			(4,084	)		(4,084	)
Cash dividends paid (common stock, $1.00/share)		—		—			—			—		—		—			(30,535	)		—			(30,535	)
Net income		—		—			—			—		—		—			80,041			—			80,041
Change in unrealized gain (loss) on securities available for sale, net of income taxes		—		—			—			—		—		16,839			—			—			16,839
Change in unrealized gain (loss) on cash flow hedge, net of income taxes		—		—			—			—		—		218			—			—			218
Balance at December 31, 2023		33,918,035		(3,549,380	)		30,368,655		$	34	$	586,912	$	(71,928	)	$	319,048		$	(132,175	)	$	701,891

See Accompanying Notes to Consolidated Financial Statements

58

Hanmi Financial Corporation and Subsidiaries

Consolidated Statements of Cash Flows

(in thousands)

	Year Ended December 31,
	2023			2022			2021
Cash flows from operating activities:
Net income	$	80,041		$	101,394		$	98,677
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		6,793			12,384			13,797
Amortization of servicing assets - net		2,456			2,672			2,292
Share-based compensation expense		2,681			2,595			2,436
Credit loss expense (recovery)		4,342			836			(24,403	)
Loss on sales of securities		1,871			—			499
Gain on sales of SBA loans		(5,701	)		(9,478	)		(17,266	)
Origination of SBA loans held for sale		(104,998	)		(150,825	)		(265,743	)
Proceeds from sales of SBA loans		104,250			165,587			274,132
Change in bank-owned life insurance		(791	)		(639	)		(1,011	)
Gain on sale of fixed assets		(3,957	)		—			(45	)
Change in prepaid expenses and other assets		(28,938	)		(24,612	)		2,657
Change in income tax assets		9,783			24,688			3,312
Valuation adjustment on servicing assets		(385	)		385			—
Change in accrued interest payable and other liabilities		40,352			22,321			4,395
Net cash provided by operating activities		107,799			147,308			93,729
Cash flows from investing activities:
Purchases of securities available for sale		(106,971	)		(166,564	)		(513,243	)
Proceeds from matured, called and repayment of securities		105,848			105,979			275,624
Proceeds from sales of securities available for sale		8,149			—			55,884
Purchases of loans receivable		(9,657	)		(11,200	)		(28,862	)
Purchases of premises and equipment		(2,419	)		(1,926	)		(2,724	)
Proceeds from disposition of premises and equipment		7,229			—			45
Proceeds from sales of other real estate owned ("OREO")		—			809			1,479
Change in loans receivable, excluding purchases		(212,173	)		(808,604	)		(235,242	)
Net cash used in investing activities		(209,994	)		(881,506	)		(447,039	)
Cash flows from financing activities:
Change in deposits		112,502			381,803			511,261
Change in borrowings		(25,000	)		212,500			(12,500	)
Issuance of subordinated debentures		—			—			107,929
Redemption of subordinated debentures, net of treasury debentures		—			(87,300	)		(13,043	)
Proceeds from exercise of stock options		—			19			—
Cash paid for employee vested shares surrendered due to employee tax liability		(785	)		(732	)		(572	)
Repurchase of common stock		(4,084	)		—			(6,135	)
Cash dividends paid		(30,535	)		(28,636	)		(16,514	)
Net cash provided by financing activities		52,098			477,654			570,426
Net increase (decrease) in cash and due from banks		(50,097	)		(256,544	)		217,116
Cash and due from banks at beginning of year		352,421			608,965			391,849
Cash and due from banks at end of period	$	302,324		$	352,421		$	608,965
Supplemental disclosures of cash flow information:
Interest expense paid	$	116,543		$	29,535		$	25,028
Income taxes paid	$	16,536		$	12,728		$	31,400
Non-cash activities:
Transfer of loans receivable to other real estate owned	$	—		$	117		$	—
Income tax (expense) benefit related to items of other comprehensive income	$	(6,915	)	$	32,552		$	4,668
Change in right-of-use asset obtained in exchange for lease liability	$	8,109		$	408		$	2,805
Cashless exercise of stock options	$	821		$	—		$	—

See Accompanying Notes to Consolidated Financial Statements

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Note 1 — Summary of Significant Accounting Policies

Summary of Operations

Hanmi Financial Corporation (“Hanmi Financial,” the “Company,” “we,” “us” or “our”) is the holding company of Hanmi Bank (the “Bank”).

The Bank is a California state-chartered financial institution, the deposits of which are insured by the FDIC, up to applicable limits. The Bank is a state nonmember bank and the FDIC is its primary federal bank regulator. The California Department of Financial Protection and Innovation is the Bank's primary state bank regulator.

The Bank’s primary operations are related to traditional banking activities, including the acceptance of deposits and originating loans and investing in securities. The Bank is a community bank conducting general business banking, with its primary market encompassing the Korean-American and other ethnic communities. The Bank’s full-service offices are located in markets where many of the businesses are owned by immigrants and other minority groups. The Bank’s client base reflects the multi-ethnic composition of these communities. As of December 31, 2023, the Bank maintained a network of 35 full-service branch offices and eight loan production offices in California, Texas, Illinois, Virginia, New Jersey, New York, Colorado, Georgia and Washington.

Basis of Presentation

The accounting and reporting policies of Hanmi Financial and subsidiaries conform, in all material respects, to U.S. generally accepted accounting principles (“GAAP”) and general practices within the banking industry. The information set forth in the following notes is presented on a continuing operations basis. The following is a summary of the significant accounting policies consistently applied in the preparation of the accompanying Consolidated Financial Statements.

Principles of Consolidation

The Consolidated Financial Statements include the accounts of Hanmi Financial and its wholly-owned subsidiaries, the Bank, and Hanmi Financial Corporation Statutory Trust I. All intercompany transactions and balances have been eliminated in consolidation.

Use of Estimates in the Preparation of Financial Statements

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Reclassifications

Certain amounts in the prior years' financial statements and related disclosures were reclassified to conform to the current year presentation with no effect on previously reported net income, stockholders’ equity or cash flows.

Segment Reporting

Through our branch network and lending units, we provide a broad range of financial products and services to individuals and companies. These products include demand, time and savings deposits; and commercial and industrial, real estate and consumer lending. While our chief decision makers monitor the revenue streams of our various products and services, operations are managed and financial performance is evaluated on a company-wide basis. Accordingly, we consider all of our operations to be aggregated in one reportable operating segment.

Cash and Due from Banks

Cash and due from banks include cash, deposits with other financial institutions, and federal funds sold. Net cash flows are reported for customer loan and deposit transactions, interest bearing deposits in other financial institutions, and federal funds purchased and repurchase agreements.

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Securities

Securities are classified into three categories and accounted for as follows:

(i)Securities that we have the positive intent and ability to hold to maturity are classified as “held to maturity” and reported at amortized cost;

(ii)Securities that are bought and held principally for the purpose of selling them in the near future are classified as “trading securities” and reported at fair value. Unrealized gains and losses are recognized in earnings;

(iii)Securities not classified as held to maturity or trading securities are classified as “available for sale” and reported at fair value. Unrealized gains and losses are reported either in earnings or as a separate component of stockholders’ equity as accumulated other comprehensive income, net of income taxes.

All of the securities held by the Company are available for sale debt securities. For available for sale debt securities in an unrealized loss position, the Company first assesses whether it intends to sell, or it is more likely than not that it will be required to sell, the security before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the security’s amortized cost basis is written down to fair value through income. For available for sale debt securities that do not meet the aforementioned criteria, the Company evaluates whether the decline in fair value has resulted from credit losses or other factors. In making this assessment, management considers the extent to which fair value is less than amortized cost, any changes to the rating of the security by a rating agency, and adverse conditions specifically related to the security, among other factors. If this assessment indicates that a credit loss exists, the present value of cash flows expected to be collected from the security are compared to the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis, a credit loss is recorded and an allowance for credit losses is established, limited by the amount that the fair value is less than the amortized cost basis. Any impairment that has not been recorded through an allowance for credit losses is recognized in other comprehensive income.

Changes in the allowance for credit losses are recorded as a provision for or recovery of credit loss expense. Losses are charged against the allowance when management believes the risk of default of an available for sale security is confirmed or when either of the criteria regarding intent or requirement to sell is met.

Accrued interest receivable on available for sale debt securities totaled $3.3 million and $2.4 million at December 31, 2023 and 2022, respectively, and was excluded from the estimate of credit losses.

Loans receivable

Originated loans: Loans (other than SBA loans) are primarily originated by the Company with the intent to hold them for investment and are stated at the principal amount outstanding, net of deferred fees and costs. Net deferred fees and costs include nonrefundable loan fees, direct loan origination costs and initial direct costs. Net deferred fees or costs are recognized as an adjustment to interest income over the contractual life of the loans using the effective interest method or taken into income when the related loans are paid off or sold. The amortization of loan fees or costs is discontinued when a loan is placed on nonaccrual status. Interest income is recorded on an accrual basis in accordance with the terms of the respective loan and includes prepayment penalties. Equipment financing agreements are similar to commercial business loans in that the financing agreements are typically made on the basis of the borrower’s ability to make repayment from the cash flows of the borrower’s business.

Nonaccrual loans and nonperforming assets: Loans are placed on nonaccrual status when, in the opinion of management, the full timely collection of principal or interest is in doubt. Generally, the accrual of interest is discontinued when principal or interest payments become 90 or more days past due, unless management believes the loan is adequately collateralized and is in the process of collection. However, in certain instances, we may place a loan on nonaccrual status earlier, depending upon the individual circumstances surrounding the loan’s status. When an asset is placed on nonaccrual, previously accrued but unpaid interest is reversed against current interest income. Subsequent collections of cash are applied as principal reductions when received, except when the ultimate collectability of principal is probable, in which case interest payments are credited to income. Nonaccrual loans may be restored to accrual status when principal and interest become current and full repayment is expected, which generally occurs after payments of six months.

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Nonperforming assets consist of loans on nonaccrual status, loans 90 days or more past due and still accruing interest, and OREO.

Loans held for sale

Loans originated, or transferred from loans receivable, and intended for sale in the secondary market are carried at the lower of aggregate cost or fair market value. Fair market value, if lower than cost, is determined based on valuations obtained from market participants or the value of underlying collateral, calculated individually. A valuation allowance is established if the market value of such loans is lower than their cost and net unrealized losses, if any, are recognized through a valuation allowance by charges to income. Origination fees on loans held for sale, net of certain costs of processing and closing the loans, are deferred until the time of sale and are included in the computation of the gain or loss from the sale of the related loans.

Allowance for credit losses

The Company calculates its allowance for credit losses by estimating expected credit losses on a collective basis for loans that share similar risk characteristics. Loans that do not share similar risk characteristics with other loans are evaluated for credit losses on an individual basis. The Company segments loans primarily by loan types, including the collateral type, loan purpose, contract term, amortization and payment structure, considering that the same type of loans share considerable similar risk characteristics. Depending on the type of the pool of financial assets with similar risk characteristics, the Company uses a DCF method, a PD/LGD method, or a WARM method to estimate expected credit losses.

The Company’s methodologies for estimating the allowance for credit losses consider available relevant information about the collectability of cash flows, including information about past events, current conditions, and reasonable and supportable forecasts. The methodologies apply historical loss information, adjusted for asset-specific characteristics, economic conditions at the measurement date, and forecasts about future economic conditions expected to exist through the contractual lives of the financial assets that were reasonable and supportable, to the identified pools of financial assets with similar risk characteristics. For all methodologies, the Company determined that four quarters represented a reasonable and supportable forecast period and revert to a historical loss rate over twelve quarters on a straight-line basis. The Company leverages quarterly economic projections from the Federal Open Market Committee and Moody’s Analytics to inform its loss driver forecasts over the four-quarter forecast period, utilizing the national unemployment rate forecast as the primary loss driver. The Company applies an expected loss ratio based on internal historical losses adjusted as appropriate for qualitative factors. The Company's evaluation of market, industry or business specific data, changes in the underlying portfolio composition, trends relating to credit quality, delinquencies, and reasonable and supportable forecasts of economic conditions informed the estimate of qualitative factors.

The Company estimated the allowance for credit losses on loans based on the underlying assets’ amortized cost basis. In the event that collection of principal becomes uncertain, the Company has policies in place to reverse accrued interest in a timely manner. Therefore, the Company has a policy to exclude accrued interest from the measurement of allowance for credit losses.

Expected credit losses are reflected in the allowance for credit losses through a charge to credit loss expense. When the Company deems all or a portion of a financial asset to be uncollectible, the appropriate amount is written off and the allowance for credit losses is reduced by the same amount. Subsequent recoveries, if any, are credited to the allowance for credit losses when received.

Credit Losses on Off-Balance Sheet Credit Exposures

The Company has credit loss exposure for off-balance sheet lending commitments. The Company estimates expected credit losses for off-balance sheet exposures over the contractual period in which it is exposed to credit risk via a contractual obligation to extend credit, unless that obligation is unconditionally cancellable by the Company. The estimate includes consideration of the likelihood that funding will occur and an estimate of expected credit losses on commitments expected to be funded over its estimated life. Adjustments to the allowance for credit losses on off-balance sheet credit exposures is recognized as a provision for credit loss expense.

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Individually Evaluated Loans

Individually evaluated loans are measured for expected credit losses based on the present value of expected cash flows discounted at the effective interest rate, the observable market price, or the fair value of collateral. The allowance for collateral dependent loans is calculated as the difference between the outstanding loan balance and the value of the collateral as determined by recent appraisals, less estimated costs to sell. The allowance for collateral dependent loans varies based on the collateral coverage of the loan at the time of the designation as nonperforming. We continue to monitor the collateral coverage on these loans on a quarterly basis, based on recent appraisals, and adjust the allowance accordingly.

Premises and Equipment

Premises and equipment are stated at cost, less accumulated depreciation and amortization. Depreciation and amortization are computed on the straight-line method over the estimated useful lives of the various classes of assets. The ranges of useful lives for the principal classes of assets are as follows:

Buildings and improvements	10 to 30 years
Furniture and equipment	3 to 10 years
Leasehold improvements	Term of lease or useful life, whichever is shorter
Software	3 to 7 years

Impairment of Long-Lived Assets

We review long-lived assets and certain identifiable intangibles for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future net undiscounted cash flows expected to be generated by the asset. If such assets are considered to be nonperforming, the individual amount to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell.

Other Real Estate Owned and Repossessed Personal Property

Other real estate owned includes real estate acquired through foreclosure and other real estate holdings that are not used in the operation of the Company’s business. Repossessed personal property consists of equipment repossessed on defaulted equipment financing agreements. Other real estate owned and repossessed personal property are recorded at the lower of cost or fair value less estimated costs to sell. Subsequent declines in fair value are recorded through expense.

Servicing Assets

Servicing assets are initially recorded at fair value, which represents the price paid, and amortized in proportion to, and over the period of, estimated net servicing income.

Servicing assets are recorded based on the present value of the contractually specified servicing fee, net of adequate compensation cost, for the estimated life of the loan, using a discount rate and a constant prepayment rate. Management periodically evaluates the servicing assets for impairment. Impairment, if it occurs, is recognized in a valuation allowance in the period of impairment.

Goodwill and Other Intangible Assets

Goodwill and other intangible assets consist of acquired intangible assets arising from acquisitions, including core deposit and third-party originator intangibles. The acquired intangible assets are initially measured at fair value and then are amortized on the straight-line method over their estimated useful lives while goodwill is not amortized.

Goodwill and other intangible assets are assessed for impairment annually or whenever events or changes in circumstances indicate the carrying amount may not be recoverable. The Company performed its annual impairment test and determined no impairment existed as of December 31, 2023.

Federal Home Loan Bank Stock

The Bank is a member of the FHLB of San Francisco and is required to own common stock in the FHLB based upon the Bank’s balance of outstanding FHLB advances. FHLB stock is carried at cost and may be sold back to the FHLB at its carrying

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value. FHLB stock is periodically evaluated for impairment based on ultimate recovery of par value. Both cash and stock dividends received are reported as dividend income.

Bank-Owned Life Insurance

We have purchased single premium life insurance policies (“bank-owned life insurance”) on certain current and former officers. The Bank and named beneficiaries of various current and former covered officers are the beneficiaries under each policy. In the event of the death of a covered officer, the Bank and named beneficiaries of the covered officer will receive the specified insurance benefit from the insurance carrier. Bank-owned life insurance is recorded at the amount that can be realized under the insurance contract at the balance sheet date, which is the cash surrender value adjusted for other charges or other amounts due, if any, that are probable at settlement. Under the Split Dollar Death Benefit Agreements, upon death of an active or former employee, the designated beneficiary(ies) are eligible to receive benefits, which in the aggregate, totaled $2.5 million at December 31, 2023.

Revenue Recognition

ASU 2014-09, Revenue from Contracts with Customers (Topic 606), established a principles-based approach to recognizing revenue that applies to all contracts other than those covered by other authoritative U.S. GAAP guidance. Quantitative and qualitative disclosures regarding the nature, amount, timing and uncertainty of revenue and cash flows are also required. The standard’s core principle is that a company shall recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. In doing so, companies generally are required to use more judgment and make more estimates than under prior guidance. These may include identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation.

Since the guidance does not apply to revenue associated with financial instruments, including loans and securities that are accounted for under GAAP, the new guidance did not have an impact on revenue most closely associated with our financial instruments, including interest income and expense. The Company completed its overall assessment of revenue streams and review of related contracts potentially affected by the ASU, including revenue streams associated with our noninterest income. Based on this assessment, the Company concluded that ASU 2014-09 did not change the method in which the Company currently recognizes revenue for these revenue streams.

The Company's noninterest income primarily includes service charges on deposit accounts, trade finance and other service charges and fees, servicing income, bank-owned life insurance income and gains or losses on sale of SBA loans and securities. Based on our assessment of revenue streams related to the Company's noninterest income, we concluded that the Company's performance obligations for such revenue streams are typically satisfied as services are rendered. If applicable, the Company records contract liabilities, or deferred revenue, when payments from customers are received or due in advance of providing services to customers, and records contract assets when services are provided to customers before payment is received or before payment is due. The Company’s noninterest revenue streams are largely based on transactional activities and since the Company generally receives payments for its services during the period or at the time services are provided, there are no contract asset or receivable balances as of December 31, 2023 and 2022. Consideration is often received immediately or shortly after the Company satisfies its performance obligations and revenue is recognized.

The Company also completed its evaluation of certain costs related to these revenue streams to determine whether such costs should be presented as expenses or contra-revenue (i.e., gross versus net) and concluded that our Consolidated Statements of Income do not include any revenue streams that are impacted by such gross versus net provisions of the standard.

Income Tax

We provide for income taxes using the asset and liability method. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is provided when it is more likely than not that some portion or all of the deferred tax assets will not be realized.

The Company has invested in limited partnerships formed to develop and operate affordable housing units for lower income tenants throughout California. The partnership interests are accounted for utilizing the proportional amortization method with amortization expense and tax benefits recognized through the income tax provision.

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Share-Based Compensation

The Company may provide awards of options, stock appreciation rights, restricted stock awards, restricted stock unit awards, shares granted as a bonus or in lieu of another award, dividend equivalents, other stock-based awards, or performance awards, together with any other right or interest to a participant. Plan participants may include executives and other employees, officers, directors, consultants and other persons who provide services to the Company or its related entities. All stock options granted under its stock-based benefit plans have an exercise price equal to the fair market value of the underlying common stock on the date of grant. Stock options granted generally vest based on three to five years of continuous service and expire 10 years from the date of grant. Restricted stock awards become fully vested after a certain number of years or after certain performance criteria are met. Performance stock units vest upon achievement of certain criteria and may have dividend equivalent rights associated with them. Hanmi Financial becomes entitled to an income tax deduction in an amount equal to the taxable income reported by the holders of the restricted shares when the restrictions are released and the shares are issued. Restricted shares are forfeited if officers and employees terminate employment prior to the lapsing of restrictions or if certain market condition criteria are not met. Forfeitures of restricted stock are treated as canceled shares.

Excess tax benefits from the exercise or vesting of share-based awards are included as a reduction in the provision for income tax expense in the period in which the exercise or vesting occurs.

Earnings per Share

Earnings per share (“EPS”) is calculated on both a basic and a diluted basis. Basic EPS excludes dilution and is computed by dividing income available to common stockholders by the weighted-average number of common shares outstanding for the period. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted from the issuance of common stock that then shared in earnings. For diluted EPS, the weighted-average number of common shares included the impact of unvested restricted stock under the treasury method.

Unvested restricted stock containing rights to non-forfeitable dividends are considered participating securities prior to vesting and have been included in the earnings allocation in computing basic and diluted EPS under the two-class method.

Treasury Stock

In January 2019, the Company's board of directors adopted a stock repurchase program, under which the Company may repurchase up to 5.0% of its then outstanding shares, or approximately 1.5 million shares of its common stock. The program permits shares to be repurchased in open market or private transactions, through block trades, and pursuant to any trading plan that may be adopted in accordance with Rule 10b5-1 of the Securities and Exchange Commission. The repurchase program may be suspended, terminated or modified at any time for any reason, including market conditions, the cost of repurchasing shares, the availability of alternative investment opportunities, liquidity, and other factors deemed appropriate. These factors may also affect the timing and amount of share repurchases. The repurchase program does not obligate the Company to purchase any particular number of shares. During the year ended December 31, 2023, there were 250,000 shares repurchased, for a total cost of $4.1 million.

We use the cost method of accounting for treasury stock. The cost method requires us to record the reacquisition cost of treasury stock as a deduction from stockholders’ equity on the Consolidated Balance Sheets.

Fair Value of Financial Instruments

Fair values of financial instruments are estimated using relevant market information and other assumptions, as more fully disclosed in a separate note. Fair value estimates involve uncertainties and matters of significant judgment regarding interest rates, credit risk, prepayments, and other factors, especially in the absence of broad markets for particular items. Changes in assumptions or in market conditions could significantly affect these estimates.

Derivative Instruments and Hedging Activities

FASB ASC 815, Derivatives and Hedging (“ASC 815”), provides the disclosure requirements for derivatives and hedging activities with the intent to provide users of financial statements with an enhanced understanding of: (a) how and why an entity uses derivative instruments, (b) how the entity accounts for derivative instruments and related hedged items, and (c) how derivative instruments and related hedged items affect an entity’s financial position, financial performance, and cash flows. Further, qualitative disclosures are required that explain the Company’s objectives and strategies for using derivatives, as well as quantitative disclosures about the fair value of and gains and losses on derivative instruments, and disclosures about credit-risk-related contingent features in derivative instruments.

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As required by ASC 815, the Company records all derivatives on the balance sheet at fair value. The accounting for changes in the fair value of derivatives depends on the intended use of the derivative, whether the Company has elected to designate a derivative in a hedging relationship and apply hedge accounting and whether the hedging relationship has satisfied the criteria necessary to apply hedge accounting. Derivatives designated and qualifying as a hedge of the exposure to changes in the fair value of an asset, liability, or firm commitment attributable to a particular risk, such as interest rate risk, are considered fair value hedges. Derivatives designated and qualifying as a hedge of the exposure to variability in expected future cash flows, or other types of forecasted transactions, are considered cash flow hedges. Derivatives may also be designated as hedges of the foreign currency exposure of a net investment in a foreign operation. Hedge accounting generally provides for the matching of the timing of gain or loss recognition on the hedging instrument with the recognition of the changes in the fair value of the hedged asset or liability that are attributable to the hedged risk in a fair value hedge or the earnings effect of the hedged forecasted transactions in a cash flow hedge. The Company may enter into derivative contracts that are intended to economically hedge a certain level of its risk, even though hedge accounting does not apply or the Company elects not to apply hedge accounting.

In accordance with the FASB’s fair value measurement guidance in ASU 2011-04, Fair Value Measurement (Topic 820), the Company made an accounting policy election to measure the credit risk of its derivative financial instruments that are subject to master netting agreements on a net basis by counterparty portfolio.

Accounting Standards Adopted in 2023

ASU 2022-02, Troubled Debt Restructurings and Vintage Disclosures (Topic 326): The FASB amended the accounting and disclosure requirements for expected credit losses by removing the recognition and measurement guidance on TDRs and enhancing disclosures pertaining to certain loan refinancings and restructurings by creditors made to borrowers experiencing financial difficulty. Additionally, this standard requires disclosure of current-period gross write-offs by year of origination for financing receivables.

The standard became effective for the Company for the interim and annual periods beginning on January 1, 2023. The adoption of ASU 2022-02 did not have a material effect on the Company’s operating results or financial condition.

ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting: In March 2020, the FASB issued ASU 2020-04 to ease the potential burden in accounting for reference rate reform. The amendments in ASU 2020-04 are elective and apply to all entities that have contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued due to reference rate reform.

ASU 2022-06, Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848: In March 2021, it was announced LIBOR would cease on June 30, 2023. Because the current relief in Topic 848 may not cover a period of time during which a significant number of modifications may take place, the amendments in this ASU will be deferred to December 31, 2024.

The new guidance on Topic 848 provided several optional expedients that reduce costs and complexity of accounting for reference rate reform, including measures to simplify or modify accounting issues resulting from reference rate reform for contract modifications, hedges, and debt securities.

The adoption of ASU 2020-04 did not have a material effect on the Company’s operating results or financial condition.

Recently Issued Accounting Standards Not Yet Effective

ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures: In December 2023, the FASB issued ASU 2023-09 to enhance the transparency and decision usefulness of income tax disclosures primarily related to income tax rate reconciliation and income taxes information. The amendments in ASU 2023-09 are effective for fiscal years beginning after December 15, 2024. The adoption of ASU 2023-09 is not expected to have material effect on the Company’s operating results or financial condition.

ASU 2023-07, Segment Reporting (Topic 280): Segment Reporting: In November 2023, the FASB issued ASU 2023-07 to provide updates that improve reportable segment disclosure requirements, primarily through enhanced disclosures on significant segment expenses. The amendments in ASU 2023-07 are effective for fiscal years beginning after December 15, 2024. The adoption of ASU 2023-07 is not expected to have material effect on the Company’s operating results or financial condition.

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Note 2 — Securities

The following is a summary of securities available for sale as of December 31, 2023 and 2022:

			Gross		Gross			Estimated
	Amortized		Unrealized		Unrealized			Fair
	Cost		Gain		Loss			Value
	(in thousands)
December 31, 2023
U.S. Treasury securities	$	86,355	$	173	$	(1,040	)	$	85,488
U.S. government agency and sponsored agency obligations:
Mortgage-backed securities - residential		504,544		481		(62,697	)		442,328
Mortgage-backed securities - commercial		59,973		—		(11,982	)		47,991
Collateralized mortgage obligations		106,823		237		(9,649	)		97,411
Debt securities		132,215		—		(7,590	)		124,625
Total U.S. government agency and sponsored agency obligations		803,555		718		(91,918	)		712,355
Municipal bonds-tax exempt		77,121		—		(9,225	)		67,896
Total securities available for sale	$	967,031	$	891	$	(102,183	)	$	865,739
December 31, 2022
U.S. Treasury securities	$	49,690	$	—	$	(1,664	)	$	48,026
U.S. government agency and sponsored agency obligations:
Mortgage-backed securities - residential		540,590		63		(75,501	)		465,152
Mortgage-backed securities - commercial		61,799		—		(10,507	)		51,292
Collateralized mortgage obligations		98,236		—		(12,751	)		85,485
Debt securities		150,338		—		(11,839	)		138,499
Total U.S. government agency and sponsored agency obligations		850,963		63		(110,598	)		740,428
Municipal bonds-tax exempt		78,143		—		(12,759	)		65,384
Total securities available for sale	$	978,796	$	63	$	(125,021	)	$	853,838

The amortized cost and estimated fair value of securities as of December 31, 2023, by contractual or expected maturity, are shown below. Collateralized mortgage obligations are included in the table shown below based on their expected maturities. All other securities are included based on their contractual maturities. Mortgage-backed securities included in the table below may mature before their contractual maturities.

	Available for Sale
	Amortized		Estimated
	Cost		Fair Value
	(in thousands)
Within one year	$	62,521	$	61,828
Over one year through five years		169,176		160,983
Over five years through ten years		83,720		77,608
Over ten years		651,614		565,320
Total	$	967,031	$	865,739

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The following table summarizes debt securities available for sale in an unrealized loss position for which an allowance for credit losses has not been recorded at December 31, 2023 and 2022, aggregated by major security type and length of time in a continuous unrealized loss position:

	Holding Period
	Less than 12 Months							12 Months or More							Total
	Gross Unrealized Loss			Estimated Fair Value		Number of Securities		Gross Unrealized Loss			Estimated Fair Value		Number of Securities		Gross Unrealized Loss			Estimated Fair Value		Number of Securities
	(in thousands, except number of securities)
December 31, 2023
U.S. Treasury securities	$	(57	)	$	21,024		7	$	(983	)	$	32,449		11	$	(1,040	)	$	53,473		18
U.S. government agency and sponsored agency obligations:
Mortgage-backed securities - residential		(11	)		2,324		5		(62,686	)		411,417		118		(62,697	)		413,741		123
Mortgage-backed securities - commercial		—			—		—		(11,982	)		47,991		15		(11,982	)		47,991		15
Collateralized mortgage obligations		(38	)		7,074		2		(9,611	)		63,610		24		(9,649	)		70,684		26
Debt securities		—			—		—		(7,590	)		124,625		26		(7,590	)		124,625		26
Total U.S. government agency and sponsored agency obligations		(49	)		9,398		7		(91,869	)		647,643		183		(91,918	)		657,041		190
Municipal bonds-tax exempt		—			—		—		(9,225	)		67,896		19		(9,225	)		67,896		19
Total	$	(106	)	$	30,422		14	$	(102,077	)	$	747,988		213	$	(102,183	)	$	778,410		227
December 31, 2022
U.S. Treasury securities	$	(414	)	$	33,812		14	$	(1,250	)	$	14,215		4	$	(1,664	)	$	48,027		18
U.S. government agency and sponsored agency obligations:
Mortgage-backed securities - residential		(1,712	)		36,009		18		(73,789	)		424,302		105		(75,501	)		460,311		123
Mortgage-backed securities - commercial		(84	)		4,069		1		(10,423	)		47,221		14		(10,507	)		51,290		15
Collateralized mortgage obligations		(1,011	)		23,606		8		(11,740	)		61,879		20		(12,751	)		85,485		28
Debt securities		(1,103	)		31,714		8		(10,736	)		106,785		22		(11,839	)		138,499		30
Total U.S. government agency and sponsored agency obligations		(3,910	)		95,398		35		(106,688	)		640,187		161		(110,598	)		735,585		196
Municipal bonds-tax exempt		—			—		—		(12,759	)		65,385		19		(12,759	)		65,385		19
Total	$	(4,324	)	$	129,210		49	$	(120,697	)	$	719,787		184	$	(125,021	)	$	848,997		233

The Company evaluates its available for sale securities portfolio for impairment on a quarterly basis. The Company did not recognize unrealized losses in income because it has the ability and the intent to hold and does not expect to be required to sell these securities until the recovery of their cost basis. The quarterly impairment assessment takes into account the changes in the credit quality of these debt securities since acquisition and the likelihood of a credit loss occurring over the life of the securities. In the event that a credit loss is expected to occur in the future, an allowance is established and a corresponding credit loss is recognized. Based on this analysis, the Company determined that no credit losses are expected to be realized on the tax-exempt municipal bond portfolio. The remainder of the securities portfolio consists of U.S. Treasury obligations, U.S. government agency securities, and U.S. government sponsored agency securities, all of which have the backing of the U.S. government, and are therefore not expected to incur credit losses.

Realized gains and losses on sales of securities and proceeds from sales of securities were as follows for the periods indicated:

	Year Ended December 31,
	2023			2022		2021
	(in thousands)
Gross realized gains on sales of securities	$	—		$	—	$	99
Gross realized losses on sales of securities		(1,871	)		—		(598	)
Net realized gains (losses) on sales of securities	$	(1,871	)	$	—	$	(499	)
Proceeds from sales of securities	$	8,149			—		55,884

For the year ended December 31, 2023, the Company recorded $1.9 million in net realized loss from sale of securities that had previously been recognized as net unrealized losses of $1.7 million in comprehensive income.

There were no sales of securities for the year ended December 31, 2022. For the year ended December 31, 2021, the Company recorded $0.5 million in net realized loss from the sale of securities that had previously been recognized as net unrealized losses of $0.1 million in comprehensive income.

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Securities available for sale with market values of $24.8 million and $23.4 million as of December 31, 2023 and 2022, respectively, were pledged to secure advances from the Federal Reserve Bank (“FRB”) Discount Window and the Bank Term Funding Program (“BTFP”), and for other purposes as required or permitted by law.

At year-end 2023, there were no holdings of securities of any one issuer, other than the U.S. government and its agencies, in an amount greater than 10% of shareholders’ equity.

Note 3 — Loans Receivable

The Board of Directors and management review and approve the Bank’s loan policy and procedures on a regular basis to reflect matters such as regulatory and organizational structure changes, strategic planning revisions, concentrations of credit, loan delinquencies and nonperforming loans, and problem loans.

Real estate loans are loans secured by liens or interest in real estate, to provide for the purchase, construction or refinance of real estate properties. Commercial and industrial loans consist of commercial term loans, commercial lines of credit and can include SBA loans. Alternatively, SBA loans can be real estate secured. Equipment financing agreements are typically secured by the business assets being financed. We maintain management loan review and monitoring departments that review and monitor pass graded loans as well as problem loans to prevent further deterioration.

Concentrations of Credit: The majority of the Bank’s loan portfolio consists of commercial real estate loans.

Loans receivable, net

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

	December 31,
	2023			2022
	(in thousands)
Real estate loans:
Commercial property
Retail	$	1,107,360		$	1,023,608
Hospitality		740,519			646,893
Office		574,981			499,946
Other (1)		1,366,534			1,553,729
Total commercial property loans		3,789,394			3,724,176
Construction		100,345			109,205
Residential (2)		962,661			734,472
Total real estate loans		4,852,400			4,567,853
Commercial and industrial loans (3)		747,819			804,492
Equipment financing agreements		582,215			594,788
Loans receivable		6,182,434			5,967,133
Allowance for credit losses		(69,462	)		(71,523	)
Loans receivable, net	$	6,112,972		$	5,895,610

(1)Includes, among other property types, mixed-use, gas station, apartment, industrial, faith-based facilities and warehouse; the remaining real estate categories represent less than 1% of the Bank's total loans receivable.

(2)Includes $1.9 million and $2.4 million of home equity loans and lines, and $4.5 million and $4.6 million of personal loans at December 31, 2023 and 2022, respectively.

(3)At December 31, 2023 and 2022, PPP loans were $0.2 million and $0.9 million, respectively.

Accrued interest on loans was $19.8 million and $16.0 million at December 31, 2023 and 2022, respectively.

At December 31, 2023 and 2022, loans with carrying values of $2.36 billion and $2.40 billion, respectively, were pledged to secure advances from the FHLB.

69

Loans Held for Sale

The following table details the information on SBA loans held for sale by portfolio segment for the years ended December 31, 2023 and 2022:

	Real Estate			Commercial and Industrial			Total
	(in thousands)
December 31, 2023
Balance at beginning of period	$	3,775		$	4,268		$	8,043
Originations and transfers		65,705			39,293			104,998
Sales		(60,611	)		(39,903	)		(100,514	)
Principal paydowns and amortization		(77	)		(437	)		(514	)
Balance at end of period	$	8,792		$	3,221		$	12,013
December 31, 2022
Balance at beginning of period	$	6,954		$	6,388		$	13,342
Originations and transfers		99,547			51,278			150,825
Sales		(102,720	)		(53,389	)		(156,109	)
Principal paydowns and amortization		(6	)		(9	)		(15	)
Balance at end of period	$	3,775		$	4,268		$	8,043

Loans held for sale were comprised of $12.0 million and $8.0 million of the guaranteed portion of SBA 7(a) loans at December 31, 2023 and 2022, respectively.

The following table presents loans purchased by portfolio segment for the years ended December 31, 2023 and 2022:

	Commercial Real Estate		Commercial and Industrial		Residential Real Estate		Total
	(in thousands)
2023	$	—	$	9,657	$	—	$	9,657
2022	$	11,030	$	180	$	18,715	$	29,925

70

Allowance for credit losses

The following table details the information on the allowance for credit losses by portfolio segment for the years ended December 31, 2023, 2022 and 2021:

	Real Estate			Commercial and Industrial			Equipment Financing Agreements			Total
	(in thousands)
December 31, 2023
Allowance for credit losses:
Beginning balance	$	44,026		$	15,267		$	12,230		$	71,523
Charge-offs		(627	)		(6,657	)		(8,806	)		(16,090	)
Recoveries		312			7,089			1,646			9,047
Provision (recovery) for credit losses		1,788			(5,442	)		8,636			4,982
Ending balance	$	45,499		$	10,257		$	13,706		$	69,462
December 31, 2022
Allowance for credit losses:
Beginning balance	$	48,890		$	12,418		$	11,249		$	72,557
Charge-offs		(1,886	)		(524	)		(2,312	)		(4,722	)
Recoveries		848			1,178			1,322			3,348
Provision (recovery) for credit losses		(3,826	)		2,195			1,971			340
Ending balance	$	44,026		$	15,267		$	12,230		$	71,523
December 31, 2021
Allowance for credit losses:
Beginning balance	$	51,876		$	21,410		$	17,140		$	90,426
Charge-offs		(1,427	)		(546	)		(4,400	)		(6,373	)
Recoveries		10,807			897			946			12,650
Provision (recovery) for credit losses		(12,366	)		(9,343	)		(2,437	)		(24,146	)
Ending balance	$	48,890		$	12,418		$	11,249		$	72,557

The table below presents the allowance for credit losses by portfolio segment as a percentage of the total allowance for credit losses and loans by portfolio segment as a percentage of the aggregate investment of loans receivable for the years ended December 31, 2023 and 2022:

	December 31, 2023										December 31, 2022
	Allowance Amount		Percentage of Total Allowance			Total Loans		Percentage of Total Loans			Allowance Amount		Percentage of Total Allowance			Total Loans		Percentage of Total Loans
	(dollars in thousands)
Real estate loans:
Commercial property
Retail	$	10,264		14.8	%	$	1,107,360		17.9	%	$	7,872		11.0	%	$	1,023,608		17.2	%
Hospitality		15,534		22.4			740,519		12.0			13,407		18.7			646,893		10.8
Office		3,024		4.4			574,981		9.3			2,293		3.2			499,946		8.4
Other		8,663		12.4			1,366,534		22.1			13,056		18.3			1,553,729		26.0
Total commercial property loans		37,485		54.0			3,789,394		61.3			36,628		51.2			3,724,176		62.4
Construction		2,756		4.0			100,345		1.6			4,022		5.7			109,205		1.8
Residential		5,258		7.5			962,661		15.6			3,376		4.7			734,472		12.4
Total real estate loans		45,499		65.5			4,852,400		78.5			44,026		61.6			4,567,853		76.6
Commercial and industrial loans		10,257		14.8			747,819		12.1			15,267		21.3			804,492		13.4
Equipment financing agreements		13,706		19.7			582,215		9.4			12,230		17.1			594,788		10.0
Total	$	69,462		100.0	%	$	6,182,434		100.0	%	$	71,523		100.0	%	$	5,967,133		100.0	%

71

The following table represents the amortized cost basis of collateral dependent loans by class of loans as of December 31, 2023 and 2022, for which repayment is expected to be obtained through the sale of the underlying collateral and any collateral dependent loans that are still accruing but are considered nonperforming.

	December 31,
	2023		2022
	(in thousands)
Real estate loans:
Commercial property
Retail	$	1,530	$	1,930
Hospitality		338		—
Other (1)		305		256
Total commercial property loans		2,173		2,186
Residential		1		508
Total real estate loans		2,174		2,694
Commercial and industrial loans		5,178		—
Total	$	7,352	$	2,694

(1)Includes, among other property types, mixed-use, gas station, apartment, industrial, faith-based facilities and warehouse; the remaining real estate categories represent less than one percent of the Bank's total loans receivable.

Loan Quality Indicators

As part of the on-going monitoring of the quality of our loan portfolio, we utilize an internal loan grading system to identify credit risk and assign an appropriate grade (from 1 to 8) for each loan in our portfolio. Third-party loan reviews are conducted annually on a sample basis. Additional adjustments are made when determined to be necessary. The loan grade definitions are as follows:

Pass and Pass-Watch: Pass and Pass-Watch loans, grades (1-4), are in compliance with the Bank’s credit policy and regulatory requirements, and do not exhibit any potential or defined weaknesses as defined under “Special Mention,” “Substandard” or “Doubtful.” This category is the strongest level of the Bank’s loan grading system. It consists of all performing loans with no identified credit weaknesses. It includes cash and stock/security secured loans or other investment grade loans.

Special Mention: A Special Mention loan, grade (5), has potential weaknesses that deserve management’s close attention. If not corrected, these potential weaknesses may result in deterioration of the repayment of the debt and result in a Substandard classification. Loans that have significant actual, not potential, weaknesses are considered more severely classified.

Substandard: A Substandard loan, grade (6), has a well-defined weakness that jeopardizes the liquidation of the debt. A loan graded Substandard is not protected by the sound worth and paying capacity of the borrower, or of the value and type of collateral pledged. With a Substandard loan, there is a distinct possibility that the Bank will sustain some loss if the weaknesses or deficiencies are not corrected.

Doubtful: A Doubtful loan, grade (7), is one that has critical weaknesses that would make the collection or liquidation of the full amount due improbable. However, there may be pending events which may work to strengthen the loan, and therefore the amount or timing of a possible loss cannot be determined at the current time.

Loss: A loan classified as Loss, grade (8), is considered uncollectible and of such little value that their continuance as active bank assets is not warranted. This classification does not mean that the loan has absolutely no recovery or salvage value, but rather it is not practical or desirable to defer writing off this asset even though partial recovery may be possible in the future. Loans classified as Loss will be charged off in a timely manner.

Under regulatory guidance, loans graded special mention or worse are considered criticized loans, and loans graded substandard or worse are considered classified loans.

72

Loans by Vintage Year and Risk Rating

	Term Loans
	Amortized Cost Basis by Origination Year (1)
	2023		2022		2021			2020		2019		Prior			Revolving Loans Amortized Cost Basis			Total
	(in thousands)
December 31, 2023
Real estate loans:
Commercial property
Risk Rating
Pass / Pass Watch	$	683,819	$	986,822	$	858,821		$	572,950	$	378,067	$	238,400		$	30,236		$	3,749,115
Special Mention		4,400		3,997		3,271			5,670		711		2,310			1,406			21,765
Classified		3,065		1,080		4,899			—		5,578		3,892			—			18,514
Total commercial property		691,284		991,899		866,991			578,620		384,356		244,602			31,642			3,789,394
YTD gross charge-offs		—		—		—			411		—		216			—			627
YTD net charge-offs (recoveries)		—		—		—			403		—		(81	)		—			322
Construction
Risk Rating
Pass / Pass Watch		72,039		—		—			—		—		—			—			72,039
Special Mention		—		—		28,306			—		—		—			—			28,306
Classified		—		—		—			—		—		—			—			—
Total construction		72,039		—		28,306			—		—		—			—			100,345
YTD gross charge-offs		—		—		—			—		—		—			—			—
YTD net charge-offs (recoveries)		—		—		—			—		—		—			—			—
Residential
Risk Rating
Pass / Pass Watch		290,196		375,712		158,618			12,656		217		119,736			5,025			962,160
Special Mention		—		—		—			—		—		—			500			500
Classified		—		—		—			—		—		1			—			1
Total residential		290,196		375,712		158,618			12,656		217		119,737			5,525			962,661
YTD gross charge-offs		—		—		—			—		—		—			—			—
YTD net charge-offs (recoveries)		—		—		—			—		—		(7	)		—			(7	)
Total real estate loans
Risk Rating
Pass / Pass Watch		1,046,054		1,362,534		1,017,439			585,606		378,284		358,136			35,261			4,783,314
Special Mention		4,400		3,997		31,577			5,670		711		2,310			1,906			50,571
Classified		3,065		1,080		4,899			—		5,578		3,893			—			18,515
Total real estate loans		1,053,519		1,367,611		1,053,915			591,276		384,573		364,339			37,167			4,852,400
YTD gross charge-offs		—		—		—			411		—		216			—			627
YTD net charge-offs (recoveries)		—		—		—			403		—		(88	)		—			315
Commercial and industrial loans:
Risk Rating
Pass / Pass Watch		177,864		169,209		84,198			31,348		9,971		12,920			242,044			727,554
Special Mention		—		14,578		—			102		—		65			(1	)		14,744
Classified		329		—		—			—		79		174			4,939			5,521
Total commercial and industrial loans		178,193		183,787		84,198			31,450		10,050		13,159			246,982			747,819
YTD gross charge-offs		—		17		—			—		110		410			6,120			6,657
YTD net charge-offs (recoveries)		—		5		(7	)		—		101		(6,621	)		6,090			(432	)
Equipment financing agreements:
Risk Rating
Pass / Pass Watch		215,670		211,228		101,622			24,340		18,832		3,192			—			574,884
Special Mention		—		—		—			—		—		—			—			—
Classified		392		4,171		1,945			365		401		57			—			7,331
Total equipment financing agreements		216,062		215,399		103,567			24,705		19,233		3,249			—			582,215
YTD gross charge-offs		178		3,944		3,267			386		799		232			—			8,806
YTD net charge-offs (recoveries)		178		3,744		2,858			244		250		(114	)		—			7,160
Total loans receivable:
Risk Rating
Pass / Pass Watch		1,439,588		1,742,971		1,203,259			641,294		407,087		374,248			277,305			6,085,752
Special Mention		4,400		18,575		31,577			5,772		711		2,375			1,905			65,315
Classified		3,786		5,251		6,844			365		6,058		4,124			4,939			31,367
Total loans receivable	$	1,447,774	$	1,766,797	$	1,241,680		$	647,431	$	413,856	$	380,747		$	284,149		$	6,182,434
YTD gross charge-offs		178		3,961		3,267			797		909		858			6,120			16,090
YTD net charge-offs (recoveries)		178		3,749		2,851			647		351		(6,823	)		6,090			7,043

(1)Includes extensions, renewals, or modifications of credit contracts, which consist of a new credit decision

73

	Term Loans
	Amortized Cost Basis by Origination Year (1)
	2022		2021		2020		2019		2018		Prior		Revolving Loans Amortized Cost Basis		Total
	(in thousands)
December 31, 2022
Real estate loans:
Commercial property
Risk Rating
Pass / Pass Watch	$	1,184,361	$	901,029	$	600,740	$	404,786	$	301,950	$	207,861	$	50,877	$	3,651,604
Special Mention		847		13,384		5,857		7,115		—		6,080		1,701		34,984
Classified		—		—		412		4,312		12,304		20,560		—		37,588
Total commercial property		1,185,208		914,413		607,009		416,213		314,254		234,501		52,578		3,724,176
Construction
Risk Rating
Pass / Pass Watch		41,662		67,543		—		—		—		—		—		109,205
Special Mention		—		—		—		—		—		—		—		—
Classified		—		—		—		—		—		—		—		—
Total construction		41,662		67,543		—		—		—		—		—		109,205
Residential
Risk Rating
Pass / Pass Watch		405,975		173,236		13,102		232		731		134,766		5,422		733,464
Special Mention		—		—		—		—		—		—		500		500
Classified		12		—		—		—		—		496		—		508
Total residential		405,987		173,236		13,102		232		731		135,262		5,922		734,472
Total real estate loans
Risk Rating
Pass / Pass Watch		1,631,998		1,141,808		613,842		405,018		302,681		342,627		56,299		4,494,273
Special Mention		847		13,384		5,857		7,115		—		6,080		2,201		35,484
Classified		12		—		412		4,312		12,304		21,056		—		38,096
Total real estate loans		1,632,857		1,155,192		620,111		416,445		314,985		369,763		58,500		4,567,853
Commercial and industrial loans:
Risk Rating
Pass / Pass Watch		368,778		100,537		39,577		24,117		7,342		12,282		205,951		758,584
Special Mention		—		9,285		—		—		29		102		34,113		43,529
Classified		—		—		171		1,097		81		391		639		2,379
Total commercial and industrial loans		368,778		109,822		39,748		25,214		7,452		12,775		240,703		804,492
Equipment financing agreements:
Risk Rating
Pass / Pass Watch		305,249		165,313		46,970		52,133		17,608		1,798		—		589,071
Special Mention		—		—		—		—		—		—		—		—
Classified		630		2,542		311		1,581		565		88		—		5,717
Total equipment financing agreements		305,879		167,855		47,281		53,714		18,173		1,886		—		594,788
Total loans receivable:
Risk Rating
Pass / Pass Watch		2,306,025		1,407,658		700,389		481,268		327,631		356,707		262,250		5,841,928
Special Mention		847		22,669		5,857		7,115		29		6,182		36,314		79,013
Classified		642		2,542		894		6,990		12,950		21,535		639		46,192
Total loans receivable	$	2,307,514	$	1,432,869	$	707,140	$	495,373	$	340,610	$	384,424	$	299,203	$	5,967,133

(1)Includes extensions, renewals, or modifications of credit contracts, which consist of a new credit decision

74

Loans by Vintage Year and Payment Performance

	Term Loans
	Amortized Cost Basis by Origination Year (1)
	2023		2022		2021			2020		2019		Prior			Revolving Loans Amortized Cost Basis		Total
	(in thousands)
December 31, 2023
Real estate loans:
Commercial property
Payment performance
Performing	$	689,449	$	991,899	$	866,841		$	578,620	$	384,275	$	243,819		$	31,642	$	3,786,545
Nonperforming		1,835		—		150			—		81		783			—		2,849
Total commercial property		691,284		991,899		866,991			578,620		384,356		244,602			31,642		3,789,394
YTD gross charge-offs		—		—		—			411		—		216			—		627
YTD net charge-offs (recoveries)		—		—		—			403		—		(81	)		—		322
Construction
Payment performance
Performing		72,039		—		28,306			—		—		—			—		100,345
Nonperforming		—		—		—			—		—		—			—		—
Total construction		72,039		—		28,306			—		—		—			—		100,345
YTD gross charge-offs		—		—		—			—		—		—			—		—
YTD net charge-offs (recoveries)		—		—		—			—		—		—			—		—
Residential
Payment performance
Performing		290,196		375,712		158,618			12,656		217		119,736			5,525		962,660
Nonperforming		—		—		—			—		—		1			—		1
Total residential		290,196		375,712		158,618			12,656		217		119,737			5,525		962,661
YTD gross charge-offs		—		—		—			—		—		—			—		—
YTD net charge-offs (recoveries)		—		—		—			—		—		(7	)		—		(7	)
Total real estate loans
Payment performance
Performing		1,051,684		1,367,611		1,053,765			591,276		384,492		363,555			37,167		4,849,550
Nonperforming		1,835		—		150			—		81		784			—		2,850
Total real estate loans		1,053,519		1,367,611		1,053,915			591,276		384,573		364,339			37,167		4,852,400
YTD gross charge-offs		—		—		—			411		—		216			—		627
YTD net charge-offs (recoveries)		—		—		—			403		—		(88	)		—		315
Commercial and industrial loans:
Payment performance
Performing		177,864		183,787		84,198			31,415		10,050		13,066			242,134		742,514
Nonperforming		329		—		—			35		—		93			4,848		5,305
Total commercial and industrial loans		178,193		183,787		84,198			31,450		10,050		13,159			246,982		747,819
YTD gross charge-offs		—		17		—			—		110		410			6,120		6,657
YTD net charge-offs (recoveries)		—		5		(7	)		—		101		(6,621	)		6,090		(432	)
Equipment financing agreements:
Payment performance
Performing		215,670		211,228		101,622			24,340		18,844		3,192			—		574,896
Nonperforming		392		4,171		1,945			365		389		57			—		7,319
Total equipment financing agreements		216,062		215,399		103,567			24,705		19,233		3,249			—		582,215
YTD gross charge-offs		178		3,944		3,267			386		799		232			—		8,806
YTD net charge-offs (recoveries)		178		3,744		2,858			244		250		(114	)		—		7,160
Total loans receivable:
Payment performance
Performing		1,445,218		1,762,626		1,239,585			647,031		413,386		379,813			279,301		6,166,960
Nonperforming		2,556		4,171		2,095			400		470		934			4,848		15,474
Total loans receivable	$	1,447,774	$	1,766,797	$	1,241,680		$	647,431	$	413,856	$	380,747		$	284,149	$	6,182,434
YTD gross charge-offs		178		3,961		3,267			797		909		858			6,120		16,090
YTD net charge-offs (recoveries)		178		3,749		2,851			647		351		(6,823	)		6,090		7,043

(1)Includes extensions, renewals, or modifications of credit contracts, which consist of a new credit decision

75

	Term Loans
	Amortized Cost Basis by Origination Year (1)
	2022		2021		2020		2019		2018		Prior		Revolving Loans Amortized Cost Basis		Total
	(in thousands)
December 31, 2022
Real estate loans:
Commercial property
Payment performance
Performing	$	1,185,208	$	914,413	$	606,597	$	416,213	$	312,324	$	233,643	$	52,578	$	3,720,976
Nonperforming		—		—		412		—		1,930		858				3,200
Total commercial property		1,185,208		914,413		607,009		416,213		314,254		234,501		52,578		3,724,176
Construction
Payment performance
Performing		41,662		67,543		—		—		—		—		—		109,205
Nonperforming		—		—		—		—		—		—		—		—
Total construction		41,662		67,543		—		—		—		—		—		109,205
Residential
Payment performance
Performing		405,975		173,236		13,102		232		731		134,766		5,922		733,964
Nonperforming		12		—		—		—		—		496		—		508
Total residential		405,987		173,236		13,102		232		731		135,262		5,922		734,472
Total real estate loans
Payment performance
Performing		1,632,845		1,155,192		619,699		416,445		313,055		368,409		58,500		4,564,145
Nonperforming		12		—		412		—		1,930		1,354		—		3,708
Total real estate loans		1,632,857		1,155,192		620,111		416,445		314,985		369,763		58,500		4,567,853
Commercial and industrial loans:
Payment performance
Performing		368,778		109,822		39,577		25,199		7,452		12,539		240,703		804,070
Nonperforming		—		—		171		15		—		236		—		422
Total commercial and industrial loans		368,778		109,822		39,748		25,214		7,452		12,775		240,703		804,492
Equipment financing agreements:
Payment performance
Performing		305,249		165,313		46,970		52,133		17,608		1,798		—		589,071
Nonperforming		630		2,542		311		1,581		565		88		—		5,717
Total equipment financing agreements		305,879		167,855		47,281		53,714		18,173		1,886		—		594,788
Total loans receivable:
Payment performance
Performing		2,306,872		1,430,327		706,246		493,777		338,115		382,746		299,203		5,957,286
Nonperforming		642		2,542		894		1,596		2,495		1,678		—		9,847
Total loans receivable	$	2,307,514	$	1,432,869	$	707,140	$	495,373	$	340,610	$	384,424	$	299,203	$	5,967,133

(1)Includes extensions, renewals, or modifications of credit contracts, which consist of a new credit decision

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Nonaccrual Loans and Nonperforming Assets

The following tables represent the amortized cost basis of loans on nonaccrual status and loans past due 90 days and still accruing as of December 31, 2023 and 2022.

	December 31, 2023
	Nonaccrual Loans With No Allowance for Credit Losses		Nonaccrual Loans With Allowance for Credit Losses		Loans Past Due 90 Days Still Accruing		Total Nonperforming Loans
	(in thousands)
Real estate loans:
Commercial property
Retail	$	1,717	$	321	$	—	$	2,038
Hospitality		338		150		—		488
Office		—		—		—		—
Other		305		18		—		323
Total commercial property loans		2,360		489		—		2,849
Residential		1		—		—		1
Total real estate loans		2,361		489		—		2,850
Commercial and industrial loans		5,213		92		—		5,305
Equipment financing agreements		570		6,749		—		7,319
Total	$	8,144	$	7,330	$	—	$	15,474
	December 31, 2022
	Nonaccrual Loans With No Allowance for Credit Losses		Nonaccrual Loans With Allowance for Credit Losses		Loans Past Due 90 Days Still Accruing		Total Nonperforming Loans
	(in thousands)
Real estate loans:
Commercial property
Retail	$	1,929	$	—	$	—	$	1,929
Other		540		731		—		1,271
Total commercial property loans		2,469		731		—		3,200
Residential		508		—		—		508
Total real estate loans		2,977		731		—		3,708
Commercial and industrial loans		—		422		—		422
Equipment financing agreements		215		5,501		—		5,716
Total	$	3,192	$	6,654	$	—	$	9,846

The Company recognized $0.2 million, $46,000 and $0.7 million of interest income on nonaccrual loans for the twelve months ended December 31, 2023, 2022 and 2021, respectively.

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The following is an aging analysis of loans, disaggregated by loan class, as of the dates indicated:

	30-59 Days Past Due		60-89 Days Past Due		90 Days or More Past Due		Total Past Due		Current		Total
	(in thousands)
December 31, 2023
Real estate loans:
Commercial property
Retail	$	632	$	—	$	—	$	632	$	1,106,728	$	1,107,360
Hospitality		—		150		22		172		740,347		740,519
Office		—		—		—		—		574,981		574,981
Other		592		—		—		592		1,365,942		1,366,534
Total commercial property loans		1,224		150		22		1,396		3,787,998		3,789,394
Construction		—		—		—		—		100,345		100,345
Residential		521		336		1		858		961,803		962,661
Total real estate loans		1,745		486		23		2,254		4,850,146		4,852,400
Commercial and industrial loans		76		120		5,178		5,374		742,445		747,819
Equipment financing agreements		7,138		2,134		4,551		13,823		568,392		582,215
Total loans receivable	$	8,959	$	2,740	$	9,752	$	21,451	$	6,160,983	$	6,182,434
December 31, 2022
Real estate loans:
Commercial property
Retail	$	—	$	—	$	—	$	—	$	1,023,608	$	1,023,608
Hospitality		—		—		—		—		646,893		646,893
Office		—		—		—		—		499,946		499,946
Other		—		494		—		494		1,553,235		1,553,729
Total commercial property loans		—		494		—		494		3,723,682		3,724,176
Construction		—		—		—		—		109,205		109,205
Residential		313		804		7		1,124		733,348		734,472
Total real estate loans		313		1,298		7		1,618		4,566,235		4,567,853
Commercial and industrial loans		77		79		—		156		804,336		804,492
Equipment financing agreements		5,825		1,271		2,949		10,045		584,743		594,788
Total loans receivable	$	6,215	$	2,648	$	2,956	$	11,819	$	5,955,314	$	5,967,133

The following table details nonperforming assets as of the dates indicated:

	As of December 31,
	2023		2022
	(in thousands)
Nonaccrual loans	$	15,474	$	9,846
Loans receivable 90 days or more past due and still accruing		—		—
Total nonperforming loans receivable		15,474		9,846
Other real estate owned ("OREO")		117		117
Total nonperforming assets	$	15,591	$	9,963

OREO consisted of one property with a carrying value of $0.1 million as of December 31, 2023 and 2022. OREO is included in prepaid expenses and other assets in the accompanying Consolidated Balance Sheets as of December 31, 2023 and 2022.

Loan Modifications

No loans were modified to borrowers experiencing financial difficulty during the twelve months ended December 31, 2023, 2022 or 2021.

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Note 4 — Servicing Assets

The changes in servicing assets for the years ended December 31, 2023 and 2022 were as follows:

	As of December 31,
	2023			2022
	(in thousands)
Balance at beginning of period	$	7,176		$	7,080
Additions related to sale of SBA loans		1,965			3,153
Amortization		(2,456	)		(2,672	)
Change in valuation allowance		385			(385	)
Balance at end of period	$	7,070		$	7,176

At December 31, 2023 and 2022, we serviced loans sold to unaffiliated parties in the amount of $539.6 million and $523.6 million, respectively. These loans are maintained off-balance sheet and are not included in the loans receivable balance. All of the loans being serviced were SBA loans.

The Company recorded servicing fee income of $5.2 million, $4.9 million and $4.6 million for the years ended December 31, 2023, 2022 and 2021, respectively. Servicing fee income, net of amortization of servicing assets and liabilities, is included in other operating income in the consolidated statements of income.

The fair value of servicing rights was $7.7 million at December 31, 2023. Fair value at December 31, 2023 was determined using discount rates ranging from 14.4% to 24.7% and prepayment speeds ranging from 12.2% to 19.7%, depending on the stratification of the specific servicing right. The fair value of servicing rights was $7.1 million at December 31, 2022. Fair value at December 31, 2022 was determined using discount rates ranging from 21.9% to 25.3% and prepayment speeds ranging from 10.8% to 16.7%, depending on the stratification of the specific servicing right.

Note 5 — Premises and Equipment

The following is a summary of the major components of premises and equipment:

	As of December 31,
	2023			2022
	(in thousands)
Land	$	5,319		$	6,850
Building and improvements		9,420			12,643
Furniture and equipment		31,014			30,341
Leasehold improvements		20,130			18,246
Fixed assets in process		1,059			32
		66,942			68,112
Accumulated depreciation and amortization		(44,983	)		(45,262	)
Total premises and equipment, net	$	21,959		$	22,850

Depreciation and amortization expense related to premises and equipment was $3.3 million, $3.9 million and $4.4 million for the years ended December 31, 2023, 2022 and 2021, respectively.

Note 6 — Leases

The Company enters into leases in the normal course of business primarily for financial centers, back-office operations locations, business development offices, information technology data centers and information technology equipment. At December 31, 2023, the Company’s leases have remaining terms ranging from four months to ten years and one month, some of which include renewal or termination options to extend the lease for up to five years.

The Company includes lease extension and termination options in the lease term if, after considering relevant economic factors, it is reasonably certain the Company will exercise the option. In addition, the Company has elected to account for any non-lease components in its real estate leases as part of the associated lease component. The Company has also elected not to recognize leases with original lease terms of 12 months or less (short-term leases) on the Company’s balance sheet.

Leases are classified as operating or finance leases at the lease commencement date. Lease expense for operating leases and short-term leases is recognized on a straight-line basis over the term of the lease. Right-of-use assets represent our right to

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use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Right-of-use assets and lease liabilities are recognized at the lease commencement date based on the estimated present value of the lease payments over the lease term.

In determining whether a contract contained a lease, we determined whether an arrangement was or included a lease at contract inception. Operating lease right-of-use asset and liability were recognized at commencement date and initially measured based on the present value of lease payments over the defined lease term. The right-of-use asset and lease liability were $42.4 million and $46.4 million, respectively, as of December 31, 2023. The outstanding balances of the right-of-use asset and lease liability were $40.4 million and $44.2 million, respectively, as of December 31, 2022.

In determining the discount rates, since most of our leases do not provide an implicit rate, we used our incremental borrowing rate provided by the FHLB of San Francisco based on the information available at commencement date to calculate the present value of lease payments.

The Company's right-of-use asset is included in prepaid expenses and other assets and our lease liability is included in accrued expenses and other liabilities in the accompanying consolidated balance sheet.

We lease our premises under non-cancelable operating leases. At December 31, 2023, future minimum annual rental commitments under these non-cancelable operating leases, with initial or remaining terms of one year or more, were as follows:

	Amount
	(in thousands)
2024	$	8,861
2025		8,052
2026		6,898
2027		6,576
2028		6,145
Thereafter		14,927
Remaining lease commitments		51,459
Interest		(5,057	)
Present value of lease liability	$	46,402

For the years ended December 31, 2023, 2022 and 2021, net rental expenses recorded under such leases amounted to $8.8 million, $8.3 million, and $8.5 million, respectively. This included operating lease costs of $8.7 million, $7.9 million and $8.1 million for the twelve months ended December 31, 2023, 2022 and 2021, respectively.

Weighted average remaining lease terms for the Company’s operating leases were 6.82 years and 7.12 years as of December 31, 2023 and 2022, respectively. Weighted average discount rates used for the Company’s operating leases were 2.98% and 2.42% as of December 31, 2023 and 2022, respectively.

Cash paid, and included in cash flows from operating activities, for amounts included in the measurement of the lease liability for the Company's operating leases for the twelve months ended December 31, 2023, 2022 and 2021 was $8.7 million, $8.0 million and $8.0 million, respectively.

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Note 7 — Goodwill and other intangibles

The third-party originators intangible of $483,000 and goodwill of $11.0 million were recorded as a result of the acquisition of an equipment financing agreements portfolio in 2016. The core deposit intangible of $2.2 million was recognized for the deposits acquired in a 2014 acquisition. The Company's intangible assets were as follows for the periods indicated:

		December 31, 2023							December 31, 2022
	Amortization Period	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
		(in thousands)
Core deposit intangible	10 years	$	2,213	$	(2,145	)	$	68	$	2,213	$	(2,031	)	$	182
Third-party originators intangible	7 years		483		(483	)		—		483		(471	)		12
Goodwill	N/A		11,031		—			11,031		11,031		—			11,031
Total intangible assets		$	13,727	$	(2,628	)	$	11,099	$	13,727	$	(2,502	)	$	11,225

The Company performed an impairment analysis in the fourth quarter of 2023 and determined no impairment existed as of December 31, 2023. No triggering event occurred as of, or subsequent to December 31, 2023, that would require a reassessment of goodwill and other intangible assets. There were no impairment charges related to intangible assets recorded in earnings in the three years ended December 31, 2023.

Note 8 — Deposits

Time deposits more than $250,000 at year-end 2023 and 2022 were $1.00 billion and $697.0 million, respectively.

At December 31, 2023, the scheduled maturities of time deposits were as follows:

Year Ending December 31,	Time Deposits More Than $250,000		Other Time Deposits		Total
	(in thousands)
2024	$	995,830	$	1,444,509	$	2,440,339
2025		3,928		6,205		10,133
2026		263		3,142		3,405
2027		—		572		572
2028 & thereafter		—		418		418
Total	$	1,000,021	$	1,454,846	$	2,454,867

A summary of interest expense on deposits was as follows for the periods indicated:

	Year Ended December 31,
	2023		2022		2021
	(in thousands)
Demand: interest-bearing	$	117	$	100	$	61
Money market and savings		44,066		12,753		5,199
Time deposits more than $250,000		42,762		4,457		726
Other time deposits		47,763		8,628		5,669
Total interest expense on deposits	$	134,708	$	25,938	$	11,655

Accrued interest payable on deposits was $39.2 million and $7.8 million at December 31, 2023 and 2022, respectively. Total deposits reclassified to loans due to overdrafts at December 31, 2023 and 2022 were $1.6 million and $1.2 million, respectively.

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Note 9 — Borrowings

Borrowings consisted of FHLB advances, which represent collateralized obligations with the FHLB. The following is a summary of contractual maturities of FHLB advances:

	As of December 31,
	2023					2022
	Outstanding Balance		Weighted Average Rate			Outstanding Balance		Weighted Average Rate
	(dollars in thousands)
Open advances	$	212,500		5.70	%	$	250,000		4.65	%
Advances due within 12 months		37,500		0.40			50,000		0.97
Advances due over 12 months through 24 months		12,500		1.90			37,500		0.40
Advances due over 24 months through 36 months		62,500		4.37			12,500		1.90
Outstanding advances	$	325,000		4.69	%	$	350,000		3.57	%

The following is financial data pertaining to FHLB advances:

	As of December 31,
	2023			2022			2021
	(dollars in thousands)
Weighted-average interest rate at end of year		4.69	%		3.57	%		1.05	%
Weighted-average interest rate during the year		3.48	%		1.52	%		1.17	%
Average balance of FHLB advances	$	197,390		$	148,027		$	145,277
Maximum amount outstanding at any month-end	$	450,000		$	350,000		$	162,500

We have pledged loans receivable with carrying values of $2.36 billion at December 31, 2023, as collateral with the FHLB for this borrowing facility. The total borrowing capacity available from the pledged collateral is $1.54 billion, of which $1.09 billion remained available at December 31, 2023. At December 31, 2023, the available borrowing capacity through the Federal Reserve Bank of San Francisco Discount Window and the BTFP was $23.2 million on pledged securities with market values of $24.8 million, none of which was outstanding. At December 31, 2022, the available borrowing capacity through the Federal Reserve Bank of San Francisco Discount Window was $22.0 million on pledged securities with market values of $23.4 million, none of which was outstanding.

At December 31, 2023, advances from the FHLB with a weighted average interest rate of 4.69% were $325.0 million, a decrease of $25.0 million from $350.0 million with a weighted average interest rate of 3.57% at December 31, 2022. FHLB open advances were $212.5 million with a weighted average interest rate of 5.70% while the remainder of term advances were $112.5 million with a weighted average interest rate of 2.77% at December 31, 2023. At December 31, 2022, the Bank had $250.0 million of open advances and $100.0 million of term advances at the FHLB with a weighted average rate of 4.65% and 0.87%, respectively. For the years ended December 31, 2023, 2022 and 2021, interest expense on FHLB advances were $6.9 million, $2.2 million and $1.7 million, respectively, and the weighted-average interest rates were 3.48%, 1.52% and 1.17%, respectively.

Note 10 — Subordinated Debentures

On August 20, 2021, the Company issued Fixed-to-Floating Subordinated Notes (“2031 Notes”) of $110.0 million with a final maturity date of September 1, 2031. The 2031 Notes have an initial fixed interest rate of 3.75% per annum, payable semi-annually in arrears on March 1 and September 1 of each year, up to but excluding September 1, 2026. From and including September 1, 2026 and thereafter, the 2031 Notes will bear interest at a floating rate per annum equal to the Benchmark rate (which is expected to be the Three-Month Term SOFR) plus 310 basis points, payable quarterly in arrears on March 1, June 1, September 1 and December 1 of each year. If the then current three-month term SOFR rate is less than zero, the three-month SOFR will be deemed to be zero. Debt issuance cost was $2.1 million, which is being amortized through the 2031 Notes maturity date. At December 31, 2023 and 2022, the balance of the 2031 Notes included in the Company’s Consolidated Balance Sheet, net of debt issuance cost, was $108.3 million and $108.2 million, respectively. The amortization of debt issuance cost was $183,000, $176,000 and $62,000 for the years ended December 31, 2023, 2022 and 2021, respectively.

The Company issued Fixed-to-Floating Subordinated Notes (“2027 Notes”) of $100.0 million on March 21, 2017, with a final maturity on March 30, 2027. The Notes have an initial fixed interest rate of 5.45% per annum, payable semi-annually on March 30 and September 30 of each year. From and including March 30, 2022 and thereafter, the 2027 Notes bear interest

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at a floating rate equal to the then current three-month LIBOR, as calculated on each applicable date of determination, plus 3.315% payable quarterly. If the then current three-month LIBOR is less than zero, three-month LIBOR will be deemed to be zero. Debt issuance cost was $2.3 million, which is being amortized through the Note’s maturity date.

During the year ended December 31, 2022, the Company redeemed its 2027 Notes. A portion of the redemption was funded with the proceeds from the Company’s 2021 subordinated debt offering. The redemption price for each of the 2027 Notes equaled 100% of the outstanding principal amount redeemed, plus any accrued and unpaid interest thereon. All interest accrued on the 2027 Notes ceased to accrue on and after March 30, 2022. Upon the redemption, the Company recognized a pre-tax charge of $1.1 million for the remaining unamortized debt issuance costs associated with the 2027 Notes. The amortization of debt issuance cost was $1.1 million and $0.3 million for the years ended December 31, 2022 and 2021, respectively.

At December 31, 2023 and 2022, the balance of Fixed-to-Floating Subordinated Notes included in the Company’s Consolidated Balance Sheet, net of debt issuance cost, was $108.3 million and $108.2 million, respectively.

The Company assumed Junior Subordinated Deferrable Interest Debentures (“Subordinated Debentures”) as a result of an acquisition in 2014 with an unpaid principal balance of $26.8 million and an estimated fair value of $18.5 million. The $8.3 million discount is being amortized to interest expense through the debentures’ maturity date of March 15, 2036. A trust was formed in 2005 which issued $26.0 million of Trust Preferred Securities (“TPS”) at a 6.26% fixed rate for the first five years and a variable rate at the three-month LIBOR plus 140 basis points thereafter and invested the proceeds in the Subordinated Debentures. The rate on the TPS at December 31, 2023 was 7.05%. Beginning September 15, 2023, the variable rate on the TPS changed to the three-month SOFR plus approximately 166 basis points, representing a credit spread of 140 basis points and an approximate 26 basis point adjustment to convert three-month LIBOR to three-month SOFR. The Company may redeem the Subordinated Debentures at an earlier date if certain conditions are met. The TPS will be subject to mandatory redemption if the Subordinated Debentures are repaid by the Company. Interest is payable quarterly, and the Company has the option to defer interest payments on the Subordinated Debentures from time to time for a period not to exceed five consecutive years. At December 31, 2023 and 2022, the balance of Subordinated Debentures included in the Company’s Consolidated Balance Sheets, net of discount of $5.1 million and $5.6 million, was $21.7 million and $21.2 million, respectively. The amortization of discount was $420,000, $412,000 and $402,000 for the years ended December 31, 2023, 2022 and 2021, respectively.

Note 11 — Income Taxes

In accordance with the provisions of ASC 740, the Company periodically reviews its income tax positions based on tax laws and regulations and financial reporting considerations, and records adjustments as appropriate. This review takes into consideration the status of current taxing authorities’ examinations of the Company’s tax returns, recent positions taken by the taxing authorities on similar transactions, if any, and the overall tax environment.

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:

	Year Ended December 31,
	2023		2022		2021
	(in thousands)
Unrecognized tax benefits at beginning of year	$	258	$	258	$	—
Gross increase for new tax positions		—		—		258
Unrecognized tax benefits at end of year	$	258	$	258	$	258

The total amount of unrecognized tax benefits that would affect our effective tax rate if recognized was $258,000 as of December 31, 2023, 2022 and 2021. The Company records interest expense and penalties related to unrecognized tax benefits in income tax expense. The amount of accrued interest was $71,000 and $33,000 at December 31, 2023 and 2022, respectively. The amount of penalties accrued was $112,000 and $44,000 at December 31, 2023 and 2022, respectively.

For the years ended December 31, 2023 and 2022, there was no change to unrecognized tax benefits related to California Enterprise Zone hiring credits. For the year ended December 31, 2021, unrecognized tax benefits increased by $258,000 related to California Enterprise Zone hiring credits.

We account for interest and penalties related to uncertain tax positions as part of our provision for federal and state income taxes. Accrued interest and penalties are included within accrued expenses and liabilities on the Consolidated Balance Sheets.

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As of December 31, 2023, the Company is subject to examination by federal and various state tax authorities for certain years ending December 31, 2019 through 2022. As of December 31, 2023, the Company is under audit with the state of California for tax years 2020 and 2021.

A summary of the provision for income taxes was as follows:

	Year Ended December 31,
	2023			2022		2021
	(in thousands)
Current expense:
Federal	$	26,336		$	1,310	$	21,805
State		13,610			304		10,901
Total current expense		39,946			1,614		32,706
Deferred expense (benefit):
Federal	$	(4,980	)		27,674		4,914
State		(426	)		10,045		(803	)
Total deferred expense		(5,406	)		37,719		4,111
Income tax expense	$	34,540		$	39,333	$	36,817

Deferred tax assets and liabilities were as follows:

	Year Ended December 31,
	2023			2022			2021
	(in thousands)
Deferred tax assets:
Provision for credit losses	$	20,745		$	21,626		$	21,671
Purchase accounting		1,467			2,149			3,360
Net operating loss carryforward		13,712			14,590			15,316
Unrealized loss on securities available for sale		29,120			35,973			3,421
Lease liability		13,729			13,029			14,712
Tax credits		—			1,711			—
State taxes		2,741			54			2,318
Other		4,283			3,793			4,032
Total deferred tax assets		85,797			92,925			64,830
Deferred tax liabilities:
Mark to market		(32,992	)		(38,916	)		(3,531	)
Depreciation		(333	)		(1,292	)		(1,292	)
Leases - right of use assets		(12,592	)		(11,932	)		(13,738	)
Other		(2,790	)		(2,836	)		(2,650	)
Total deferred tax liabilities		(48,707	)		(54,976	)		(21,211	)
Valuation allowance		(1,864	)		(1,276	)		(1,644	)
Net deferred tax assets	$	35,226		$	36,673		$	41,975

As of each reporting date, management considers the realization of deferred tax assets based on management’s judgment of various future events and uncertainties, including the timing and amount of future income, as well as the implementation of various tax planning strategies to maximize realization of deferred tax assets. A valuation allowance is provided when it is more likely than not that some portion of deferred tax assets will not be realized. As of December 31, 2023, management determined that a valuation allowance of $1.9 million was appropriate against certain state net operating losses. For all other deferred tax assets, management believes it was more likely than not that these deferred tax assets will be realized principally through future taxable income and reversal of existing taxable temporary differences. As of December 31, 2022, management determined that a valuation allowance of $1.3 million was appropriate against certain state net operating losses.

As of December 31, 2023, the Company had net operating loss carryforwards of $7.2 million and $190.9 million for federal and state income tax purposes, respectively. The federal net operating loss carryforwards of $7.2 million expire at various dates from 2034 to 2035. The state net operating loss carryforwards include California of $128.9 million which expire at various dates from 2031 through 2035, and Illinois of $62.0 million which expire at various dates from 2035-2036. Management determined that a partial valuation allowance was required against the Illinois net operating loss carryforwards. As of December 31, 2023, the Company had no remaining low income housing tax credit carryforwards.

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Reconciliation between the federal statutory income tax rate and the effective tax rate is shown in the following table:

	Year Ended December 31,
	2023			2022			2021
Federal statutory income tax rate		21.00	%		21.00	%		21.00	%
State taxes, net of federal tax benefits		9.06			7.33			5.81
Tax credit - federal		(1.52	)		(1.30	)		(1.16	)
Low-income housing amortization		1.64			1.34			1.37
Other		(0.03	)		(0.42	)		0.16
Effective tax rate		30.15	%		27.95	%		27.18	%

Note 12 — Accumulated Other Comprehensive Income (Loss)

Activity in accumulated other comprehensive income for the year ended December 31, 2023, 2022 and 2021 was as follows:

	Unrealized Gains and Losses on Available for Sale Securities			Unrealized Gains and Losses on Cash Flow Hedge		Tax Benefit (Expense)			Total
	(in thousands)
For the year ended December 31, 2023
Balance at beginning of period	$	(124,958	)	$	—	$	35,973		$	(88,985	)
Other comprehensive income (loss) before reclassification		21,795			306		(6,351	)		15,750
Reclassification from accumulated other comprehensive income		1,871			—		(564	)		1,307
Net current period other comprehensive income		23,666			306		(6,915	)		17,057
Balance at end of period	$	(101,292	)	$	306	$	29,058		$	(71,928	)
For the year ended December 31, 2022
Balance at beginning of period	$	(11,864	)	$	—	$	3,421		$	(8,443	)
Other comprehensive income (loss) before reclassification		(113,094	)		—		32,552			(80,542	)
Net current period other comprehensive income		(113,094	)		—		32,552			(80,542	)
Balance at end of period	$	(124,958	)	$	—	$	35,973		$	(88,985	)
For the year ended December 31, 2021
Balance at beginning of period	$	4,323		$	—	$	(1,247	)	$	3,076
Other comprehensive income (loss) before reclassification		(16,686	)		—		4,668			(12,018	)
Reclassification from accumulated other comprehensive income		499			—		—			499
Net current period other comprehensive income		(16,187	)		—		4,668			(11,519	)
Balance at end of period	$	(11,864	)	$	—	$	3,421		$	(8,443	)

For the year ended December 31, 2023, there was a $1.9 million reclassification from accumulated other comprehensive income to net loss on sales of securities in noninterest income. Net unrealized losses of $1.7 million related to these sold securities had previously been recorded in accumulated other comprehensive income or loss.

For the year ended December 31, 2022, there was no sale of securities.

For the year ended December 31, 2021, there was a $0.5 million reclassification from accumulated other comprehensive income to net loss on sales of securities in noninterest income. Net unrealized losses of $0.1 million related to these sold securities had previously been recorded in accumulated other comprehensive income or loss.

Note 13 — Regulatory Matters

Risk-Based Capital

Federal bank regulatory agencies require bank holding companies and banks to maintain a minimum ratio of qualifying total capital to risk-weighted assets of 8.00% and a minimum ratio of Tier 1 capital to risk-weighted assets of 6.00%. 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 4.00%.

In order for banks to be considered “well capitalized,” federal bank regulatory agencies require them to maintain a minimum ratio of qualifying total capital to risk-weighted assets of 10.00% and a minimum ratio of Tier 1 capital to

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risk-weighted assets of 8.00%. 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 5.00%.

At December 31, 2023, the Bank’s capital ratios exceeded the minimum requirements to place the Bank in the “well capitalized” category and the Company exceeded all of its applicable minimum regulatory capital ratio requirements.

A capital conservation buffer of 2.50% 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 6.27% and 5.86% and the Company's capital conservation buffer was 6.20% and 5.71% as of December 31, 2023 and 2022, respectively.

The capital ratios of Hanmi Financial and the Bank as of December 31, 2023 and 2022 were as follows:

	Actual					Minimum Regulatory Requirement					Minimum to be Categorized as “Well Capitalized”
	Amount		Ratio			Amount		Ratio			Amount		Ratio
	(dollars in thousands)
December 31, 2023
Total capital (to risk-weighted assets):
Hanmi Financial	$	947,286		14.95	%	$	506,891		8.00	%	N/A		N/A
Hanmi Bank	$	904,153		14.27	%	$	506,741		8.00	%	$	633,426		10.00	%
Tier 1 capital (to risk-weighted assets):
Hanmi Financial	$	773,179		12.20	%	$	380,168		6.00	%	N/A		N/A
Hanmi Bank	$	840,046		13.26	%	$	380,056		6.00	%	$	506,741		8.00	%
Common equity Tier 1 capital (to risk-weighted assets)
Hanmi Financial	$	751,516		11.86	%	$	285,126		4.50	%	N/A		N/A
Hanmi Bank	$	840,046		13.26	%	$	285,042		4.50	%	$	411,727		6.50	%
Tier 1 capital (to average assets):
Hanmi Financial	$	773,179		10.37	%	$	298,277		4.00	%	N/A		N/A
Hanmi Bank	$	840,046		11.32	%	$	296,948		4.00	%	$	371,185		5.00	%
December 31, 2022
Total capital (to risk-weighted assets):
Hanmi Financial	$	901,239		14.49	%	$	497,508		8.00	%	N/A		N/A
Hanmi Bank	$	860,503		13.86	%	$	496,607		8.00	%	$	620,758		10.00	%
Tier 1 capital (to risk-weighted assets):
Hanmi Financial	$	728,344		11.71	%	$	373,131		6.00	%	N/A		N/A
Hanmi Bank	$	797,608		12.85	%	$	372,455		6.00	%	$	496,607		8.00	%
Common equity Tier 1 capital (to risk-weighted assets)
Hanmi Financial	$	707,101		11.37	%	$	279,848		4.50	%	N/A		N/A
Hanmi Bank	$	797,608		12.85	%	$	279,341		4.50	%	$	403,493		6.50	%
Tier 1 capital (to average assets):
Hanmi Financial	$	728,344		10.07	%	$	289,311		4.00	%	N/A		N/A
Hanmi Bank	$	797,608		11.07	%	$	288,110		4.00	%	$	360,137		5.00	%

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Note 14 — Fair Value Measurements

Fair Value Measurements

ASC 820, Fair Value Measurements and Disclosures, defines fair value, establishes a framework for measuring fair value including a three-level valuation hierarchy, and expands disclosures about fair value measurements. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The three-level fair value hierarchy requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The three levels of inputs that may be used to measure fair value are defined as follows:

•Level 1 - Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date.

•Level 2 - Significant other observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, and other inputs that are observable or can be corroborated by observable market data.

•Level 3 - Significant unobservable inputs that reflect a company’s own assumptions about the assumptions that market participants would use in pricing an asset or liability.

Fair value is used on a recurring basis for certain assets and liabilities in which fair value is the primary basis of accounting. Additionally, fair value is used on a non-recurring basis to evaluate assets or liabilities for impairment or for disclosure purposes.

We record securities available for sale at fair value on a recurring basis. Certain other assets, such as loans held for sale, nonperforming loans, OREO, bank-owned premises, and core deposit intangible, are recorded at fair value on a non-recurring basis. Non-recurring fair value measurements typically involve assets that are periodically evaluated for impairment and for which any impairment is recorded in the period in which the re-measurement is performed.

The following methods and assumptions were used to estimate the fair value of each class of financial instrument below:

Securities available for sale - The fair values of securities available for sale are determined by obtaining quoted prices on nationally recognized securities exchanges. If quoted prices are not available, fair values are measured using matrix pricing, which is a mathematical technique used widely in the industry to value debt securities without relying exclusively on quoted prices for the specific securities but rather by relying on the securities’ relationship to other benchmark quoted securities, or other model-based valuation techniques requiring observable inputs other than quoted prices such as yield curve, prepayment speeds, and default rates. Level 1 securities include U.S. Treasury securities and mutual funds that are traded on an active exchange or by dealers or brokers in active over-the-counter markets. The fair value of these securities is determined by quoted prices on an active exchange or over-the-counter market. Level 2 securities primarily include mortgage-backed securities, collateralized mortgage obligations, U.S. government agency securities and municipal bonds in markets that are active. In determining the fair value of the securities categorized as Level 2, we obtain reports from an investment accounting service provider detailing the fair value of each investment security held as of each reporting date. The investment accounting service provider obtains prices from nationally recognized pricing services. We review the prices obtained for reasonableness based on our understanding of the marketplace, and also consider any credit issues related to the bonds. As we have not made any adjustments to the market quotes provided to us and as they are based on observable market data, they have been categorized as Level 2 within the fair value hierarchy. Level 3 securities are instruments that are not traded in the market. Therefore, no observable market data for the instrument is available, which necessitates the use of significant unobservable inputs.

Derivatives – The fair values of derivatives are based on valuation models using observable market data as of the measurement date (Level 2). Our derivatives are traded in an over-the-counter market where quoted market prices are not always available. Therefore, the fair values of derivatives are determined using quantitative models that utilize multiple market inputs. The inputs will vary based on the type of derivative, but could include interest rates, prices and indices to generate continuous yield or pricing curves, prepayment rates, and volatility factors to value the position. The majority of market inputs are actively quoted and can be validated through external sources, including brokers, market transactions and third-party pricing services.

Loans held for sale – All loans held for sale are SBA loans carried at the lower of cost or fair value. Management obtains quotes, bids or pricing indication sheets on all, or, part of these loans directly from the purchasing financial institutions.

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Premiums received, or, to be received on the quotes, bids or pricing indication sheets are indicative of the fact that cost is lower than fair value. At December 31, 2023 and 2022, the entire balance of SBA loans held for sale was recorded at its cost. We record SBA loans held for sale on a nonrecurring basis with Level 2 inputs.

Nonperforming loans – Nonaccrual loans receivable and performing restructured loans receivable are considered nonperforming for reporting purposes and are measured and recorded at fair value on a non-recurring basis. All nonperforming loans with a carrying balance over $250,000 are individually evaluated for the amount of expected credit losses, if any. Nonperforming loans with a carrying balance of $250,000 or less are evaluated collectively. However, from time to time, nonrecurring fair value adjustments to collateral dependent nonperforming loans are recorded based on either the current appraised value of the collateral, a Level 3 measurement, or management’s judgment and estimation of value reported on older appraisals that are then adjusted based on recent market trends, also a Level 3 measurement.

OREO – Fair value of OREO is based primarily on third-party appraisals, less costs to sell and result in a Level 3 classification of the inputs for determining fair value. Appraisals are required annually and may be updated more frequently as circumstances require and the fair value adjustments are made to OREO based on the updated appraised value of the property.

Servicing assets - On a quarterly basis, the Company utilizes a third-party service to evaluate servicing assets related to loans sold to unaffiliated parties with servicing retained, which results in a Level 3 classification. Servicing assets are assessed for impairment or increased obligation based on fair value at each reporting date.

Other repossessed assets – Fair value of equipment from leasing contracts is based primarily on a third-party valuation service, less costs to sell and result in a Level 3 classification of the inputs for determining fair value. Valuations are required at the time the asset is repossessed and may be subsequently updated periodically due to the Company’s short-term possession of the asset prior to its sale, or, as circumstances require and the fair value adjustments are made to the asset based on its value prior to sale.

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Assets and Liabilities Measured at Fair Value on a Recurring Basis

As of December 31, 2023 and 2022, 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		Total Fair Value
	(in thousands)
December 31, 2023
Assets:
Securities available for sale:
U.S. Treasury securities	$	85,488	$	—	$	—	$	85,488
U.S. government agency and sponsored agency obligations:
Mortgage-backed securities - residential		—		442,328		—		442,328
Mortgage-backed securities - commercial		—		47,991		—		47,991
Collateralized mortgage obligations		—		97,411		—		97,411
Debt securities		—		124,625		—		124,625
Total U.S. government agency and sponsored agency obligations		—		712,355		—		712,355
Municipal bonds-tax exempt		—		67,896		—		67,896
Total securities available for sale	$	85,488	$	780,251	$	—	$	865,739
Derivative financial instruments	$	—	$	6,245	$	—	$	6,245
Liabilities:
Derivative financial instruments	$	—	$	5,920	$	—	$	5,920
December 31, 2022
Assets:
Securities available for sale:
U.S. Treasury securities	$	48,026	$	—	$	—	$	48,026
U.S. government agency and sponsored agency obligations:
Mortgage-backed securities - residential		—		465,152		—		465,152
Mortgage-backed securities - commercial		—		51,292		—		51,292
Collateralized mortgage obligations		—		85,485		—		85,485
Debt securities		—		138,499		—		138,499
Total U.S. government agency and sponsored agency obligations		—		740,428		—		740,428
Municipal bonds-tax exempt		—		65,384		—		65,384
Total securities available for sale	$	48,026	$	805,812	$	—	$	853,838
Derivative financial instruments	$	—	$	7,507	$	—	$	7,507
Liabilities:
Derivative financial instruments	$	—	$	7,375	$	—	$	7,375

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

As of December 31, 2023 and 2022, assets and liabilities measured at fair value on a non-recurring basis are as follows:

			Level 1		Level 2		Level 3
	Total		Prices in Active Markets for Identical Assets		Observable Inputs with No Active Market with Identical Characteristics		Significant Unobservable Inputs
	(in thousands)
December 31, 2023
Assets:
Collateral dependent loans (1)	$	7,352	$	—	$	—	$	7,352
Other real estate owned		117		—		—		117
Repossessed personal property		1,305		—		—		1,305
December 31, 2022
Assets:
Collateral dependent loans (2)	$	2,694	$	—	$	—	$	2,694
Other real estate owned		117		—		—		117
Repossessed personal property		467		—		—		467
Servicing assets		7,176		—		—		7,176

(1) Consisted of real estate loans of $2.2 million and commercial and industrial loans of $5.2 million.

(2) Consisted of real estate loans of $2.7 million.

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The following table represents quantitative information about Level 3 fair value assumptions for assets measured at fair value on a non-recurring basis at December 31, 2023 and 2022:

	Fair Value		Valuation Techniques	Unobservable Input(s)	Range (Weighted Average)
	(dollars in thousands)
December 31, 2023
Collateral dependent loans:
Real estate loans:
Commercial property
Retail	$	1,530	Market approach	Adjustments to market data	5% to 20% / 15%	(1)
Hospitality		338	Market approach	Adjustments to market data	(30)% to 35% / (1)%	(1)
Other		305	Market approach	Adjustments to market data	(6)% to 1% / (2)%	(1)
Residential		1	Market approach	Adjustments to market data	(15)% to 3% / (6)%	(1)
Total real estate loans		2,174
Commercial and industrial loans		5,178	Market approach	Adjustments to market data	(20)% to 55% / (2)%	(1)
Total	$	7,352
Other real estate owned	$	117	Market approach	Adjustments to market data	(10)% to 5% / (2)%	(1)
Repossessed personal property		1,305	Market approach	Adjustments to market data		(2)
December 31, 2022
Collateral dependent loans:
Real estate loans:
Commercial property
Retail	$	1,930	Market approach	Adjustments to market data	5% to 25% / 16%	(1)
Other		256	Market approach	Adjustments to market data	(42)% to 3% / (24)%	(1)
Residential		508	Market approach	Adjustments to market data	(15)% to 3% / (1)%	(1)
Total real estate loans		2,694
Total	$	2,694
Other real estate owned	$	117	Market approach	Adjustments to market data	(20)% to 20% / (2)%	(1)
Repossessed personal property		467	Market approach	Adjustments to market data		(2)
Servicing assets		7,176	Market approach	Prepayment rate Discount rate	11% to 17% / 16% 22% to 25% / 22%	(3)

(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 adjustment represent decreases.

(2)The equipment is usually too low 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.

(3)Fair value is based on a valuation model using the present value of estimated future cash flows, prepayment speeds, default rates, and discount rates. Servicing assets are subsequently measured using the amortization method which requires servicing rights to be amortized into income over the period of the estimated future net servicing income of the underlying loans.

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ASC 825, Financial Instruments, requires disclosure of the fair value of financial assets and financial liabilities, including those financial assets and financial liabilities that are not measured and reported at fair value on a recurring basis or non-recurring basis. The methodologies for estimating the fair value of financial assets and financial liabilities that are measured on a recurring basis or non-recurring basis are discussed above.

The estimated fair value of financial instruments has been determined by using available market information and appropriate valuation methodologies. However, considerable judgment is required to interpret market data in order to develop estimates of fair value. Accordingly, the estimates presented herein are not necessarily indicative of the amounts that we could realize in a current market exchange. The use of different market assumptions and/or estimation methodologies may have a material effect on the estimated fair value amounts.

Effective January 1, 2018, the Company adopted ASU 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities (Topic 825). This standard, among other provisions, requires public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes. Other than certain financial instruments for which we have concluded that the carrying amounts approximate fair value, the fair value estimates shown below are based on an exit price notion as of December 31, 2023 and 2022, as required by ASU 2016-01. The financial instruments for which we have concluded that the carrying amounts approximate fair value include: cash and due from banks, accrued interest receivable and payable, and noninterest-bearing deposits.

The estimated fair values of financial instruments were as follows:

	December 31, 2023
	Carrying		Fair Value
	Amount		Level 1		Level 2		Level 3
	(in thousands)
Financial assets:
Cash and due from banks	$	302,324	$	302,324	$	—	$	—
Securities available for sale		865,739		85,488		780,251		—
Loans held for sale		12,013		—		12,238		—
Loans receivable, net of allowance for credit losses		6,112,972		—		—		6,007,975
Accrued interest receivable		23,371		23,371		—		—
Financial liabilities:
Noninterest-bearing deposits		2,003,596		—		2,003,596		—
Interest-bearing deposits		4,276,978		—		—		4,271,711
Borrowings and subordinated debentures		455,012		—		323,491		128,229
Accrued interest payable		39,306		39,306		—		—

	December 31, 2022
	Carrying		Fair Value
	Amount		Level 1		Level 2		Level 3
	(in thousands)
Financial assets:
Cash and due from banks	$	352,421	$	352,421	$	—	$	—
Securities available for sale		853,838		48,026		805,812		—
Loans held for sale		8,043		—		8,423		—
Loans receivable, net of allowance for credit losses		5,895,610		—		—		5,808,190
Accrued interest receivable		18,537		18,537		—		—
Financial liabilities:
Noninterest-bearing deposits		2,539,602		—		2,539,602		—
Interest-bearing deposits		3,628,470		—		—		3,623,827
Borrowings and subordinated debentures		479,409		—		345,867		126,828
Accrued interest payable		7,792		7,792		—		—

The methods and assumptions used to estimate the fair value of each class of financial instruments for which it was practicable to estimate that value are explained below:

Cash and due from banks – The carrying amounts of cash and due from banks approximate fair value due to the short-term nature of these instruments (Level 1).

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Securities – The fair value of securities, consisting of securities available for sale, is generally obtained from market bids for similar or identical securities, from independent securities brokers or dealers, or from other model-based valuation techniques described above (Level 1 and 2).

Loans held for sale – Loans held for sale, representing the guaranteed portion of SBA loans, are carried at the lower of aggregate cost or fair market value, as determined based upon quotes, bids or sales contract prices (Level 2).

Loans receivable, net of allowance for credit losses – The fair value of loans receivable is estimated based on the discounted cash flow approach. To estimate the fair value of the loans, certain loan characteristics such as account types, remaining terms, annual interest rates or coupons, interest types, past delinquencies, timing of principal and interest payments, current market rates, loan-to-value ratios, loss exposures, and remaining balances are considered. Additionally, the Company’s prior charge-off rates and loss ratios as well as various other assumptions relating to credit, interest, and prepayment risks are used as part of valuing the loan portfolio. Subsequently, the loans were individually evaluated by sorting and pooling them based on loan types, credit risk grades, and payment types. Consistent with the requirements of ASU 2016-01 which was adopted by the Company on January 1, 2018, the fair value of the Company's loans receivable is considered to be an exit price notion as of December 31, 2023 (Level 3).

The fair value of collateral dependent loans is estimated based on the net realizable fair value of the collateral or the observable market price of the most recent sale or quoted price from loans held for sale. The Company does not record loans at fair value on a recurring basis. Nonrecurring fair value adjustments to collateral dependent loans are recorded based on the current appraised value of the collateral (Level 3).

Accrued interest receivable – The carrying amount of accrued interest receivable approximates its fair value (Level 1).

Noninterest-bearing deposits – The fair value of noninterest-bearing deposits is the amount payable on demand at the reporting date (Level 2).

Interest-bearing deposits – The fair value of interest-bearing deposits, such as savings accounts, money market checking, and certificates of deposit, is estimated based on discounted cash flows. The cash flows for non-maturity deposits, including savings accounts and money market checking, are estimated based on their historical decaying experiences. The discount rate used for fair valuation is based on interest rates currently being offered by the Bank on comparable deposits as to amount and term (Level 3).

Borrowings and subordinated debentures – Borrowings consist of FHLB advances, subordinated debentures and other borrowings. Discounted cash flows based on current market rates for borrowings with similar remaining maturities are used to estimate the fair value of borrowings (Level 2 and 3).

Accrued interest payable – The carrying amount of accrued interest payable approximates its fair value (Level 1).

Note 15 — Share-Based Compensation

At December 31, 2023, we maintained the 2021 Equity Compensation Plan (the “2021 Plan”), which became effective on May 26, 2021 and the 2013 Equity Compensation Plan (the “2013 Plan” and collectively with the 2021 Plan, the “Plans”). Once the 2021 Plan was adopted, no further grants were permitted to be made under the 2013 Plan. Outstanding awards granted under the 2013 Plan continue to be governed by the 2013 Plan.

The Company may provide awards of options, stock appreciation rights, restricted stock awards, restricted stock unit awards, shares granted as a bonus or in lieu of another award, dividend equivalents, other stock-based awards or performance awards, together with any other right or interest to a participant. Participants include executives and other employees, officers, directors, consultants and other persons who provide services to the Company or its related entities. Under the 2021 Plan, we may grant equity incentive awards for up to 1,500,000 shares of common stock. As of December 31, 2023, 1,116,555 shares were still available for issuance under the 2021 Plan.

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The table below provides the share-based compensation expense and related tax benefits for the periods indicated:

	Year Ended December 31,
	2023		2022		2021
	(in thousands)
Share-based compensation expense	$	2,681	$	2,595	$	2,436
Related tax benefits	$	808	$	752	$	703

As of December 31, 2023, unrecognized share-based compensation expense was $3.8 million with an average expected recognition period of 1.8 years.

2013 and 2021 Equity Compensation Plans

Stock Options

All stock options granted under the Plans have an exercise price equal to the fair market value of the underlying common stock on the date of grant. Stock options granted generally vest based on three to five years of continuous service and expire ten years from the date of grant. New shares of common stock are issued or treasury shares are utilized upon the exercise of stock options. There were no options granted during the three years ended December 31, 2023, 2022 or 2021.

The following information under the Plans is presented for the periods indicated:

	Year Ended December 31,
	2023		2022		2021
	(in thousands)
Total intrinsic value of options exercised (1)	$	343	$	20	$	—
Cash received from options exercised	$	—	$	19	$	—

(1)Intrinsic value represents the difference between the closing stock price on the exercise date and the exercise price, multiplied by the number of options.

The following is a summary of stock option transactions under the Plans for the periods indicated:

	Year Ended December 31,
	2023					2022					2021
	Number of Shares			Weighted- Average Exercise Price Per Share		Number of Shares			Weighted- Average Exercise Price Per Share		Number of Shares			Weighted- Average Exercise Price Per Share
Options outstanding at beginning of period		111,000		$	19.89		115,938		$	19.58		125,938		$	19.59
Options exercised		(50,000	)	23.29			(1,500	)	$	12.54		—		$	—
Options forfeited		—		$	—		—		$	—		(10,000	)	$	19.74
Options expired		—		$	—		(3,438	)	$	12.54		—		$	—
Options outstanding at end of period		61,000		$	22.73		111,000		$	19.89		115,938		$	19.58
Options exercisable at end of period		61,000		$	22.73		111,000		$	19.89		115,938		$	19.58

As of December 31, 2023, there was no unrecognized compensation cost as all stock options issued under the Plans had fully vested.

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As of December 31, 2023, stock options outstanding under the Plans were as follows:

	Options Outstanding									Options Exercisable
	Number of Shares		Intrinsic Value (1)			Weighted- Average Exercise Price Per Share		Weighted- Average Remaining Contractual Life		Number of Shares		Intrinsic Value (1)			Weighted- Average Exercise Price Per Share		Weighted- Average Remaining Contractual Life
$20.00 to $21.49		3,000	$	(7	)	$	20.64		0.59		3,000	$	(7	)	$	20.64		0.59
$21.50 to $23.49		55,000		(247	)	$	22.73		0.82		55,000		(247	)	$	22.73		0.82
$23.50 to $24.83		3,000		(20	)		24.83		1.48		3,000		(20	)		24.83		1.48
		61,000	$	(274	)	$	22.73		0.84		61,000	$	(274	)	$	22.73		0.84

(1)Intrinsic value represents the difference between the closing stock price on the last trading day of the period, which was $19.40 as of December 31, 2023, and the exercise price, multiplied by the number of options. This value is presented in thousands.

Restricted Stock Awards

Restricted stock awards under the Plans become fully vested after a certain number of years or after certain performance criteria are met. Hanmi Financial becomes entitled to an income tax deduction in an amount equal to the taxable income reported by the holders of the restricted shares when the restrictions are released and the shares are issued. Restricted shares are forfeited if officers and employees terminate prior to the lapsing of restrictions. Forfeitures of restricted stock are treated as canceled shares.

The table below provides information for restricted stock awards under the Plans for the periods indicated:

	2023					2022					2021
	Number of Shares			Weighted- Average Grant Date Fair Value Per Share		Number of Shares			Weighted- Average Grant Date Fair Value Per Share		Number of Shares			Weighted- Average Grant Date Fair Value Per Share
Restricted stock at beginning of period		156,174		$	21.29		152,087		$	17.24		243,708		$	15.60
Restricted stock granted		131,021		$	18.86		101,271		$	24.56		75,679		$	19.62
Restricted stock vested		(83,968	)	$	19.34		(89,699	)	$	23.95		(134,659	)	$	16.01
Restricted stock forfeited		(6,782	)	$	23.08		(7,485	)	$	23.46		(32,641	)	$	15.02
Restricted stock at end of period		196,445		$	20.72		156,174		$	21.29		152,087		$	17.24

As of December 31, 2023, there was $2.5 million of total unrecognized compensation cost related to nonvested shares granted under the Plans. The cost is expected to be recognized over a weighted-average period of 1.8 years. The total fair value of shares vested during the years ended December 31, 2023, 2022 and 2021 was $1.4 million, $2.1 million, and $2.7 million, respectively.

Performance Stock Units

During the twelve months ended December 31, 2023, the Company granted to members of executive management 53,696 performance stock units (“PSUs”) from the 2021 Plan with a grant date fair value of $1.0 million. PSUs are similar to restricted stock awards, except the recipient does not receive the stock immediately, but instead receives it in accordance to a vesting plan and distribution schedule after achieving required performance milestones and upon remaining with the Company for a particular length of time. Each PSU that vests entitles the recipient to receive one share of the Company’s common stock on a specified issuance date.

PSUs granted vest into shares based on a three-year cliff vesting subject to achievement of a total shareholder return (“TSR”) performance metric and, for 2023, were determined to have a grant date fair value of $21.08 per share. The fair value of the performance PSUs at the grant date was determined using a Monte Carlo simulation method. The number of PSUs subject to the TSR that ultimately vest at the end of the three-year vesting performance period, if any, will be based on the relative rank of the Company’s TSR among the TSRs of a peer group of 50 regional banks. Although the recipient does receive dividend equivalent rights for any dividends paid during the performance period based on the target shares granted, no stockholder rights, including voting, or liquidation rights will be conferred upon the recipient until becoming the record holder of those shares.

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The table below provides information for performance stock units under the 2021 Plans for the periods indicated:

	2023					2022				2021
	Number of Shares			Weighted- Average Grant Date Fair Value Per Share		Number of Shares		Weighted- Average Grant Date Fair Value Per Share		Number of Shares		Weighted- Average Grant Date Fair Value Per Share
Performance stock at beginning of period		104,599		$	18.83		66,563	$	15.25		23,937	$	9.65
Performance stock granted		53,696		$	21.08		38,036	$	25.10		42,626	$	18.40
Performance stock vested		(23,937	)	$	9.65		—	$	—		—	$	—
Performance stock at end of period		134,358		$	21.37		104,599	$	18.83		66,563	$	15.25

As of December 31, 2023, there was $1.3 million of total unrecognized compensation cost related to units granted under the 2021 Plan. The cost is expected to be recognized over a weighted-average period of 1.9 years.

Compensation expense for these units is based on the fair value of the grants at the grant date and is amortized on a straight-line basis over the vesting period. For the twelve months ended December 31, 2023, total compensation expense for the PSUs was $0.7 million. The total fair value of the PSUs at December 31, 2023 was $2.6 million.

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Note 16 — Earnings per Share

The following table is a reconciliation of the components used to derive basic and diluted EPS for the periods indicated:

			Weighted-
	Net		Average		Per
	Income		Shares		Share
	(Numerator)		(Denominator)		Amount (1)
	(dollars in thousands except share and per share data)
Year Ended December 31, 2023
Basic EPS
Net income	$	80,041		30,269,740	$	2.64
Less: income allocated to unvested restricted stock		505		30,269,740		0.02
Basic EPS	$	79,536		30,269,740	$	2.63
Effect of dilutive securities - options and unvested restricted stock		—		60,518		—
Diluted EPS
Net income	$	80,041		30,330,258	$	2.64
Less: income allocated to unvested restricted stock		505		30,330,258		0.02
Diluted EPS	$	79,536		30,330,258	$	2.62
Year Ended December 31, 2022
Basic EPS
Net income	$	101,394		30,299,148	$	3.35
Less: income allocated to unvested restricted stock		558		30,299,148		0.02
Basic EPS	$	100,836		30,299,148	$	3.33
Effect of dilutive securities - options and unvested restricted stock		—		92,909		—
Diluted EPS
Net income	$	101,394		30,392,057	$	3.34
Less: income allocated to unvested restricted stock		558		30,392,057		0.02
Diluted EPS	$	100,836		30,392,057	$	3.32
Year Ended December 31, 2021
Basic EPS
Net income	$	98,677		30,393,559	$	3.25
Less: income allocated to unvested restricted stock		671		30,393,559		0.02
Basic EPS	$	98,006		30,393,559	$	3.22
Effect of dilutive securities - options and unvested restricted stock		—		78,188		—
Diluted EPS
Net income	$	98,677		30,471,747	$	3.24
Less: income allocated to unvested restricted stock		671		30,471,747		0.02
Diluted EPS	$	98,006		30,471,747	$	3.22

(1)Per share amounts may not be able to be recalculated using net income and weighted-average shares presented above due to rounding.

There were no anti-dilutive options outstanding for the years ended December 31, 2023, 2022 and 2021.

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Note 17 — Employee Benefits

401(k) Plan

We have a 401(k) plan for the benefit of substantially all of our employees. We match 75% of participant contributions to the 401(k) plan up to 8% of each 401(k) plan participant’s annual compensation. Contributions to the 401(k) plan were $3.1 million, $2.8 million and $2.6 million for the years ended December 31, 2023, 2022 and 2021, respectively.

Personal Paid Time Off

Full time employees of the Bank are provided a benefit for personal paid time off for vacation and sick time based on their length of employment. As of December 31, 2023 and 2022, the accrued expense liability for personal paid time off was $3.0 million and $2.4 million, respectively.

Bank-Owned Life Insurance

As of December 31, 2023 and 2022, the cash surrender value of bank-owned life insurance was $56.3 million and $55.5 million, respectively. The Bank is the main beneficiary under each policy, although certain current and former employees named on a policy are eligible for their heirs to be paid upon their death. In the event of the death of a covered officer, we will receive the specified insurance benefit from the insurance carrier.

Note 18 — Commitments and Contingencies

In the normal course of business, we are involved in various legal claims. Management has reviewed all legal claims against us with in-house or outside legal counsel and has taken into consideration the views of such counsel as to the outcome of the claims. In management’s opinion, the final disposition of all such claims will not have a material adverse effect on our financial position or results of operations.

Note 19 — Off-Balance Sheet Commitments

The Bank is a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of our customers. These financial instruments include commitments to extend credit and standby letters of credit. These instruments involve, to varying degrees, elements of credit and interest rate risk similar to the risk involved with on-balance sheet items recognized in the Consolidated Balance Sheets and may expire without ever being utilized.

The Bank’s exposure to credit losses in the event of non-performance by the other party to commitments to extend credit and standby letters of credit is represented by the contractual notional amount of those instruments. The Bank uses the same credit policies in making commitments and conditional obligations as it does for extending loan facilities to customers. The Bank evaluates each customer’s creditworthiness on a case-by-case basis. The amount of collateral obtained, if deemed necessary by the Bank upon an extension of credit, was based on management’s credit evaluation of the counterparty. Collateral held varies but may include accounts receivable, inventory, premises and equipment, and income-producing or borrower-occupied properties.

Some of the commitments to fund existing loans, lines of credit and letters of credit are expected to expire without being drawn upon. Therefore, the total commitments do not necessarily represent future cash requirements. As of December 31, 2023, the Bank was obligated on $120.0 million of letters of credit to the FHLBSF which were being used as collateral for public fund deposits, including $120.0 million of deposits from the State of California.

The following table shows the distribution of undisbursed loan commitments as of the dates indicated:

	December 31,
	2023		2022
	(in thousands)
Commitments to extend credit	$	813,960	$	780,543
Standby letters of credit		83,725		71,829
Commercial letters of credit		33,140		19,945
Total undisbursed loan commitments	$	930,825	$	872,317

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The allowance for credit losses related to off-balance sheet items is maintained at a level believed to be sufficient to absorb probable losses related to these unfunded credit facilities. The determination of the allowance adequacy is based on periodic evaluations of the unfunded credit facilities including an assessment of the probability of commitment usage, credit risk factors for loans outstanding to these same customers, and the terms and expiration dates of the unfunded credit facilities. Net adjustments to the allowance for credit losses related to off-balance sheet items are included in other operating expenses.

Activity in the allowance for credit losses related to off-balance sheet items was as follows for the periods indicated:

	As of and for the Year Ended December 31,
	2023			2022		2021
	(in thousands)
Balance at beginning of period	$	3,114		$	2,586	$	2,792
Provision (recovery) for credit losses		(640	)		528		(206	)
Balance at end of period	$	2,474		$	3,114	$	2,586

Note 20 — Derivatives and Hedging Activities

Risk Management Objective of Using Derivative

The Company is exposed to certain risk arising from both its business operations and economic conditions. The Company principally manages its exposures to a wide variety of business and operational risks through management of its core business activities. The Company manages economic risks, including interest rate, liquidity, and credit risk, primarily by managing the amount, sources, and duration of its assets and liabilities and through the use of derivative financial instruments. Specifically, the Company enters into derivative financial instruments to manage exposures that arise from business activities that result in the receipt or payment of future known and uncertain cash amounts, the value of which are determined by interest rates.

Derivatives Designated as Hedging Instruments - Cash Flow Hedges of Interest Rate Risk

The Company’s objectives in using interest rate derivatives are to add stability to interest income and to manage its exposure to interest rate movements. To accomplish this objective, the Company primarily uses interest rate swaps as part of its interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of fixed-rate amounts from a counterparty in exchange for the Company making variable-rate payments over the life of the agreements without exchange of the underlying notional amount. Such derivatives were used to hedge the variable cash flows associated with existing variable-rate assets. During the fourth quarter of 2023, the Company entered into a $100.0 million notional interest rate swap designated as a cash flow hedge, with an effective date of May 1, 2024 and a maturity date of May 1, 2026, to hedge a pool of Prime-indexed loans against falling rates.

For derivatives designated and that qualify as cash flow hedges of interest rate risk, the gain or loss on the derivative is recorded in Accumulated Other Comprehensive Income and subsequently reclassified into interest income in the same period(s) during which the hedged transaction affects earnings. Amounts reported in accumulated other comprehensive income related to derivatives will be reclassified to interest income as interest payments are received on the Company’s variable-rate asset. During the next 12 months, the Company estimates that an additional $0.4 million will be reclassified as an increase to interest income.

Derivatives Not Designated as Hedging Instruments

The Company also enters into interest rate swap agreements between the Company and its customers and other third-party counterparties. The Company enters into “back to back swap” arrangements whereby the Company executes interest rate swap agreements with its customers and acquires an offsetting swap position from a third-party counterparty. These derivative financial statements are accounted for at fair value, with changes in fair value recognized in the Company’s Consolidated Statements of Income.

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The table below presents the fair value of the Company’s derivative financial instruments as well as their classification on the Balance Sheet as of December 31, 2023 and 2022.

As of December 31, 2023	Derivative Assets					Derivative Liabilities
	Notional Amount		Balance Sheet Location	Fair Value		Notional Amount		Balance Sheet Location	Fair Value
	(in thousands)
Derivatives not designated as hedging instruments
Interest rate products	$	104,571	Other Assets	$	5,939	$	104,571	Other Liabilities	$	5,920
Total derivatives not designated as hedging instruments				$	5,939				$	5,920
Derivatives designated as hedging instruments
Interest rate products	$	100,000	Other Assets	$	306	$	—	Other Liabilities	$	—
Total derivatives designated as hedging instruments				$	306				$	—
As of December 31, 2022	Derivative Assets					Derivative Liabilities
	Notional Amount		Balance Sheet Location	Fair Value		Notional Amount		Balance Sheet Location	Fair Value
	(in thousands)
Derivatives not designated as hedging instruments
Interest rate products	$	61,460	Other Assets	$	7,507	$	61,460	Other Liabilities	$	7,375
Total derivatives not designated as hedging instruments				$	7,507				$	7,375

The table below presents the effect of cash flow hedge accounting on Accumulated Other Comprehensive Income as of December 31, 2023.

As of December 31, 2023
Derivatives in Subtopic 815-20 Hedging Relationships	Amount of Gain or (Loss) Recognized in OCI on Derivative		Amount of Gain or (Loss) Recognized in OCI Included Component		Amount of Gain or (Loss) Recognized in OCI Excluded Component		Location of Gain or (Loss) Recognized from Accumulated Other Comprehensive Income into Income	Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income		Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income Included Component		Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income Excluded Component
	(in thousands)
Derivatives in Cash Flow Hedging Relationships
Interest Rate Products	$	306	$	306	$	—	Interest Income	$	—	$	—	$	—
Total	$	306	$	306	$	—		$	—	$	—	$	—

The table below presents the effect of the Company’s derivative financial instruments that are not designated as hedging instruments on the Income Statement as of December 31, 2023, 2022 and 2021.

Derivatives Not Designated as Hedging Instruments under Subtopic 815-20	Location of Gain or (Loss) Recognized in Income on Derivative	Amount of Gain or (Loss) Recognized in Income on Derivative
		For the Year Ended December 31,
		2023			2022		2021
		(in thousands)
Interest rate products	Other income	$	(114	)	$	113	$	80
Total		$	(114	)	$	113	$	80

The Company recognized $0.6 million of fee income from its derivative financial instruments for the twelve months ended December 31, 2023. There were no derivative financial instruments fee income recognized for the twelve months ended December 31, 2022 and 2021.

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The table below presents a gross presentation, the effects of offsetting, and a net presentation of the Company’s derivatives as of December 31, 2023 and 2022. The net amounts of derivative assets or liabilities can be reconciled to the tabular disclosure of fair value. The tabular disclosure of fair value provides the location that derivative assets and liabilities are presented on the Balance Sheet.

Offsetting of Derivative Assets
As of December 31, 2023
							Gross Amounts Not Offset in the Consolidated Balance Sheets
	Gross Amounts of Recognized Assets		Gross Amounts Offset in the Statement of Financial Position		Net Amounts of Assets presented in the Statement of Financial Position		Financial Instruments		Cash Collateral Received		Net Amount
	(in thousands)
Derivatives	$	6,245	$	—	$	6,245	$	284	$	5,731	$	230
Offsetting of Derivative Liabilities
As of December 31, 2023
							Gross Amounts Not Offset in the Consolidated Balance Sheets
	Gross Amounts of Recognized Liabilities		Gross Amounts Offset in the Statement of Financial Position		Net Amounts of Liabilities presented in the Statement of Financial Position		Financial Instruments		Cash Collateral Provided		Net Amount
	(in thousands)
Derivatives	$	5,920	$	—	$	5,920	$	284	$	—	$	5,636
Offsetting of Derivative Assets
As of December 31, 2022
							Gross Amounts Not Offset in the Consolidated Balance Sheets
	Gross Amounts of Recognized Assets		Gross Amounts Offset in the Statement of Financial Position		Net Amounts of Assets presented in the Statement of Financial Position		Financial Instruments		Cash Collateral Received		Net Amount
	(in thousands)
Derivatives	$	7,507	$	—	$	7,507	$	7,375	$	132	$	—
Offsetting of Derivative Liabilities
As of December 31, 2022
							Gross Amounts Not Offset in the Consolidated Balance Sheets
	Gross Amounts of Recognized Liabilities		Gross Amounts Offset in the Statement of Financial Position		Net Amounts of Liabilities presented in the Statement of Financial Position		Financial Instruments		Cash Collateral Provided		Net Amount
	(in thousands)
Derivatives	$	7,375	$	—	$	7,375	$	7,375	$	—	$	—

The Company has agreements with each of its derivative counterparties that contain a provision stating if the Company either defaults or is capable of being declared in default on any of its indebtedness, then the Company could also be declared in default on its derivative obligations. In addition, these agreements may also require the Company to post additional collateral should it fail to maintain its status as a well- or adequately-capitalized institution.

As of December 31, 2023 and 2022, the fair value of derivatives in a net liability position, which includes accrued interest but excludes any adjustment for nonperformance risk, related to these agreements was $0. As of December 31, 2023 and 2022, no collateral was provided related to these agreements.

Note 21 — Qualified Affordable Housing Project Investments

The Company invests in qualified affordable housing projects. At December 31, 2023 and 2022, the balance of the investment for qualified affordable housing projects was $16.6 million and $5.9 million, respectively. This balance is reflected in prepaid expenses and other assets on the consolidated balance sheets. Total unfunded commitments related to the investments

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in qualified affordable housing projects aggregated $10.0 million and $27,000 at December 31, 2023 and 2022, respectively. The Company expects to fulfill the majority of these commitments over the next five years.

For each of the twelve months ended December 31, 2023, 2022 and 2021, the Company recognized amortization expense of $1.9 million, which was included within income tax expense on the consolidated statements of income.

Note 22 — Liquidity

Hanmi Financial

At December 31, 2023 and 2022, Hanmi Financial had $7.5 million and $10.6 million, respectively, in cash on deposit with the Bank. In addition, at December 31, 2023, Hanmi Financial had $32.4 million of securities available for sale that consisted solely of U.S. Treasury securities.

Hanmi Bank

The principal objective of our liquidity management program is to maintain the Bank’s ability to meet the day-to-day cash flow requirements of our customers who either wish to withdraw funds or to draw upon credit facilities to meet their cash needs. Management believes that the Bank, on a stand-alone basis, has adequate liquid assets to meet its current obligations. The Bank’s primary funding source will continue to be deposits originating from its branch platform. The Bank’s wholesale funds historically consisted of FHLB advances, brokered deposits, as well as State of California time deposits. As of December 31, 2023 and 2022, the Bank had $325.0 million and $350.0 million of FHLB advances, $58.3 million and $83.3 million of brokered deposits, and $120.0 million and $120.0 million of State of California time deposits, respectively.

We monitor the sources and uses of funds on a regular basis to maintain an acceptable liquidity position. The Bank’s primary source of borrowings is the FHLB, from which the Bank is eligible to borrow up to 30% of its assets. As of December 31, 2023, the total borrowing capacity available based on pledged collateral and the remaining available borrowing capacity were $1.54 billion and $1.09 billion, respectively, compared to $1.54 billion and $1.07 billion, respectively, as of December 31, 2022.

The amount that the FHLB is willing to advance differs based on the quality and character of qualifying collateral pledged by the Bank, and the advance rates for qualifying collateral may be adjusted upwards or downwards by the FHLB from time to time. To the extent deposit renewals and deposit growth are not sufficient to fund maturing and withdrawable deposits, repay maturing borrowings, fund existing and future loans, securities, and otherwise fund working capital needs and capital expenditures, the Bank may utilize the remaining borrowing capacity from its FHLB borrowing arrangement.

As a means of augmenting its liquidity, the Bank had an available borrowing source of $23.2 million from the Federal Reserve Discount Window and the BTFP, to which the Bank pledged securities with a market value of $24.8 million, and had no borrowings as of December 31, 2023. The BTFP facility is available until March 11, 2024. The Bank also maintains a line of credit for repurchase agreements up to $100.0 million. The Bank also had three unsecured federal funds lines of credit totaling $115.0 million with no outstanding balances as of December 31, 2023.

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Note 23 — Condensed Financial Information of Parent Company

Balance Sheets

	At December 31,
	2023		2022
	(in thousands)
Assets
Cash	$	7,492	$	10,558
Securities available for sale		32,389		17,660
Investments in consolidated subsidiaries		790,425		728,172
Other assets		3,551		12,611
Total assets	$	833,857	$	769,001
Liabilities and stockholders' equity
Liabilities
Subordinated debentures	$	130,012	$	129,409
Other liabilities		1,954		2,077
Total liabilities		131,966		131,486
Stockholders' equity		701,891		637,515
Total liabilities and stockholders' equity	$	833,857	$	769,001

Statements of Income

	Year Ended December 31,
	2023			2022			2021
	(in thousands)
Dividends from bank subsidiaries	$	44,500		$	57,000		$	20,639
Interest income on securities		1,094			191			—
Interest expense		(6,482	)		(8,037	)		(8,273	)
Other expense		(5,817	)		(5,174	)		(4,891	)
Income before taxes and undistributed income of subsidiary		33,295			43,980			7,475
Income tax benefit		1,403			4,026			3,962
Income before undistributed income of subsidiary		34,698			48,006			11,437
Equity in undistributed income of subsidiary		45,343			53,388			87,239
Net income	$	80,041		$	101,394		$	98,676

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Statements of Cash Flows

	Year Ended December 31,
	2023			2022			2021
	(in thousands)
Cash Flows from Operating Activities:
Net income	$	80,041		$	101,394		$	98,676
Adjustments to reconcile net income to net cash used in operating activities
Undistributed income of subsidiary		(45,343	)		(53,388	)		(87,239	)
Depreciation and amortization		409			1,703			1,148
Share-based compensation expense		2,680			2,596			2,437
Change in other assets and liabilities		8,879			(2,019	)		(9,076	)
Net cash provided by operating activities		46,666			50,286			5,946
Cash Flows from Investing Activities:
Purchases of securities		(21,328	)		(17,956	)		—
Proceeds from matured, called and repayment of securities		7,000			—			—
Net cash used in investing activities		(14,328	)		(17,956	)		—
Cash Flows from Financing Activities:
Proceeds from exercise of stock options		—			19			—
Issuance of subordinated debentures		—			—			107,929
Redemption of subordinated debentures, net of treasury debentures		—			(87,300	)		(13,043	)
Cash paid for employee vested shares surrendered due to employee tax liability		(785	)		(732	)		(572	)
Repurchase of common stock		(4,084	)		—			(6,135	)
Cash dividends paid		(30,535	)		(28,636	)		(16,514	)
Net cash provided by (used in) financing activities		(35,404	)		(116,649	)		71,665
Net increase (decrease) in cash		(3,066	)		(84,319	)		77,611
Cash at beginning of year		10,558			94,877			17,266
Cash at end of year	$	7,492		$	10,558		$	94,877

Note 24 — Subsequent Events

Cash Dividend

On January 25, 2024, the Company announced that the Board of Directors of the Company declared a quarterly cash dividend of $0.25 per share to be paid on February 22, 2024 to stockholders of record as of the close of business on February 5, 2024.

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Hanmi Financial Corporation and Subsidiary

Exhibit Index

Exhibit Number	Document
3.1	Amended and Restated Certificate of Incorporation of Hanmi Financial Corporation, dated April 19, 2000 (incorporated by reference herein from Exhibit 3.1 to Hanmi Financial’s Quarterly Report on Form 10-Q (including certificates of amendment as of June 23, 2004, May 28, 2009 and July 28, 2010) for the quarter ended September 30, 2010, filed with the SEC on November 9, 2010).
3.2	Certificate of Amendment of Amended and Restated Certificate of Incorporation of Hanmi Financial Corporation, dated December 16, 2011 (incorporated by reference herein from Exhibit 3.1 to Hanmi Financial’s Current Report on Form 8-K, filed with the SEC on December 19, 2011).
3.3	Second Amended and Restated Bylaws of Hanmi Financial Corporation, dated as of March 23, 2016 (incorporated by reference herein from Exhibit 3.1 to Hanmi Financial’s Current Report on Form 8-K, filed with the SEC on March 29, 2016).
3.4	First Amendment to the Second Amended and Restated Bylaws of Hanmi Financial Corporation (incorporated by reference herein from Exhibit 3.1 to Hanmi Financial’s Current Report on Form 8-K, filed with the SEC on October 2, 2017).
4.1	Specimen Stock Certificate representing Hanmi Financial Corporation Common Stock (incorporated by reference herein from Exhibit 4 to Hanmi Financial’s Annual Report on Form 10-K for the year ended December 31, 2010, filed with the SEC on March 16, 2011).
4.2	Central Bancorp Statutory Trust I Junior Subordinated Indenture, dated as of December 27, 2005, entered into between Central Bancorp, Inc. and JPMorgan Chase Bank, National Association as Trustee (incorporated by reference herein from Exhibit 10.1 to Hanmi Financial’s Annual Report on Form 10-K for the year ended December 31, 2015, filed with the SEC on February 29, 2016).
4.3	Amended and Restated Declaration of Trust of Central Bancorp Statutory Trust I, dated as of December 27, 2005, among Central Bancorp, Inc., JPMorgan Chase Bank, National Association, and the Administrative Trustees Named Therein (incorporated by reference herein from Exhibit 10.2 to Hanmi Financial’s Annual Report on Form 10-K for the year ended December 31, 2015, filed with the SEC on February 29, 2016).
4.4	Central Bancorp Statutory Trust I Trust Preferred Securities Guarantee Agreement, dated as of December 27, 2005, entered into between Central Bancorp, Inc., as Guarantor, and JPMorgan Chase Bank, National Association, as Guarantee Trustee (incorporated by reference herein from Exhibit 10.3 to Hanmi Financial’s Annual Report on Form 10-K for the year ended December 31, 2015, filed with the SEC on February 29, 2016).
4.5	Description of Registrant’s Capital Stock (incorporated by reference herein from Exhibit 4.7 to Hanmi Financial’s Annual Report on Form 10-K for the year ended December 31, 2019, filed with the SEC on March 2, 2020).
4.6	Indenture, dated August 20, 2021, between Hanmi Financial Corporation and Wilmington Trust, National Association, as trustee (incorporated by reference herein from Exhibit 4.1 to Hanmi Financial Corporation’s Current Report on Form 8-K, filed with the SEC on August 20, 2021).
4.7	First Supplemental Indenture, dated August 20, 2021, between Hanmi Financial Corporation and Wilmington Trust, National Association, as Trustee (incorporated by reference herein from Exhibit 4.2 to Hanmi Financial Corporation’s Current Report on Form 8-K, filed with the SEC on August 20, 2021).
10.1	Form of Indemnity Agreement (incorporated by reference herein from Exhibit 10.35 to Hanmi Financial's Annual Report on Form 10-K for the year ended December 31, 2010, filed with the SEC on March 16, 2011).
10.2	Hanmi Financial Corporation Amended and Restated 2013 Equity Compensation Plan (incorporated by reference herein from Exhibit 4.2 to Hanmi Financial Corporation’s Registration Statement on Form S-8 (No. 333-191855), filed with the SEC on October 23, 2013).†
10.3	Form of Incentive Stock Option Agreement (incorporated by reference herein from Exhibit 4.3 to Hanmi Financial Corporation’s Registration Statement on Form S-8 (No. 333-191855), filed with the SEC on October 23, 2013).†

105

10.4	Form of Non-Qualified Stock Option Agreement (incorporated by reference herein from Exhibit 4.4 to Hanmi Financial Corporation’s Registration Statement on Form S-8 (No. 333-191855), filed with the SEC on October 23, 2013).†
10.5	Form of Restricted Stock Agreement (incorporated by reference herein from Exhibit 4.5 to Hanmi Financial Corporation’s Registration Statement on Form S-8 (No. 333-191855), filed with the SEC on October 23, 2013).†
10.6	Amended and Restated Employment Agreement by and among Hanmi Financial Corporation, Hanmi Bank and Bonita I. Lee dated February 25, 2022 (incorporated by reference herein from Exhibit 109 to Hanmi Financial Corporation's Annual Report on form 10-K for the year ended December 31, 2021, as filed with the SEC on February 28, 2022).†
10.7	Amended and Restated Employment Agreement by and among Hanmi Financial Corporation, Hanmi Bank and Romolo C. Santarosa dated February 26, 2020 (incorporated by reference herein from Exhibit 10.10 to Hanmi Financial's Annual Report on Form 10-K for the year ended December 31, 2019, filed with the SEC on March 2, 2020).†
10.8	Hanmi Financial Corporation 2021 Equity Compensation Plan (incorporated by reference to Appendix A to the proxy statement for the Annual Meeting of Stockholders filed with the Securities and Exchange Commission on April 16, 2021 (File No. 000-30421).†
10.9	Form of Restricted Stock Agreement for the Hanmi Financial Corporation 2021 Equity Compensation Plan (incorporated by reference herein to Exhibit 10.1 from Hanmi Financial Corporation’s Quarterly Report on Form 10-Q, as filed with the SEC on November 9, 2021).†
10.10	Form of Performance Share Unit Agreement for the Hanmi Financial Corporation 2021 Equity Compensation Plan (incorporated by reference herein to Exhibit 10.2 from Hanmi Financial Corporation’s Quarterly Report on Form 10-Q, as filed with the SEC on November 9, 2021).†
10.11	Form of Non-Qualified Stock Option Agreement for the Hanmi Financial Corporation 2021 Equity Compensation Plan (incorporated by reference herein to Exhibit 10.3 from Hanmi Financial Corporation’s Quarterly Report on Form 10-Q, as filed with the SEC on November 9, 2021).†
10.12	First Amendment to the Amended and Restated Employment Agreement by and among Hanmi Financial Corporation and Romolo C. Santarosa dated February 26, 2020 (incorporated by reference herein from Exhibit 10.1 to Hanmi Financial Corporation's Quarterly Report on Form 10-Q, as filed with the SEC on August 9, 2022).†
21.1	List of Subsidiaries
23.1	Consent of Independent Registered Public Accounting Firm - Consent of Crowe LLP.
31.1	Certification of Chief Executive Officer pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of Chief Financial Officer pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
97.1	Clawback Policy
101.INS	Inline XBRL Instance Document *
101.SCH	Inline XBRL Taxonomy Extension Schema With Embedded Linkbase Document *
104	The cover page from the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, has been formatted in Inline XBRL

† Constitutes a management contract or compensatory plan or arrangement.

106

* Attached as Exhibit 101 to this report are documents formatted in Inline XBRL (Extensible Business Reporting Language).

107

Signatures

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date: February 29, 2024	Hanmi Financial Corporation
	By:	/s/ Bonita I. Lee
		Bonita I. Lee
		President and Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this Report has been signed below by the following persons on behalf of the Registrant and in the capacities indicated as of February 29, 2024.

/s/ Bonita I. Lee	/s/ Romolo C. Santarosa
Bonita I. Lee	Romolo C. Santarosa
President and Chief Executive Officer; Director	Senior Executive Vice President and Chief Financial Officer
(Principal Executive Officer)	(Principal Financial Officer)
/s/ Joseph Pangrazio	/s/ John J. Ahn
Joseph Pangrazio	John J. Ahn
Senior Vice President and Chief Accounting Officer	Chairman of the Board
(Principal Accounting Officer)
/s/ David L. Rosenblum	/s/ Christie K. Chu
David L. Rosenblum	Christie K. Chu
Vice Chairman of the Board	Director
/s/ Harry H. Chung	/s/ Gloria J. Lee
Harry H. Chung	Gloria J. Lee
Director	Director
/s/ Thomas J. Williams	/s/ Michael M. Yang
Thomas J. Williams	Michael M. Yang
Director	Director
/s/ James Marasco	/s/ Gideon Yu
James Marasco	Gideon Yu
Director	Director

108

EX-21.1

Exhibit 21.1

Hanmi Financial Corporation

List of Subsidiaries

Name of Subsidiary	Jurisdiction of Incorporation or Organization
Hanmi Bank	California
Central Bancorp Statutory Trust	Texas

EX-23.1

Exhibit 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in Registration Statements No. 333-191855 and No. 333-258144 on Form S-8 of Hanmi Financial Corporation of our report dated February 29, 2024, relating to the financial statements and effectiveness of internal control over financial reporting, appearing in this Annual Report on Form 10-K.

/s/ Crowe LLP

Los Angeles, California

February 29, 2024

EX-31.1

Exhibit 31.1

Certification of Principal Executive Officer

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Bonita I. Lee, President and Chief Executive Officer, certify that:

1.I have reviewed this Annual Report on Form 10-K of Hanmi Financial Corporation;

2.Based on my knowledge, this Report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this Report;

3.Based on my knowledge, the financial statements, and other financial information included in this Report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this Report;

4.The Registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:

(a)designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this Report is being prepared;

(b)designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this Report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this Report based on such evaluation; and

(d)disclosed in this Report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and

5.The Registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the Audit Committee of the Registrant’s Board of Directors (or persons performing the equivalent functions):

(a)all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and

(b)any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.

Date:	February 29, 2024	/s/ Bonita I. Lee
		Bonita I. Lee
		President and Chief Executive Officer
		(Principal Executive Officer)

EX-31.2

Exhibit 31.2

Certification of Principal Financial Officer

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Romolo C. Santarosa, Senior Executive Vice President and Chief Financial Officer, certify that:

1.I have reviewed this Annual Report on Form 10-K of Hanmi Financial Corporation;

2.Based on my knowledge, this Report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this Report;

3.Based on my knowledge, the financial statements, and other financial information included in this Report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this Report;

4.The Registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:

(a)designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this Report is being prepared;

(b)designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this Report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this Report based on such evaluation; and

(d)disclosed in this Report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and

5.The Registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the Audit Committee of the Registrant’s Board of Directors (or persons performing the equivalent functions):

(a)all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and

(b)any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.

Date:	February 29, 2024	/s/ Romolo C. Santarosa
		Romolo C. Santarosa
		Senior Executive Vice President and Chief Financial Officer
		(Principal Financial Officer)

EX-32.1

Exhibit 32.1

Certification Pursuant To

18 U.S.C. Section 1350,

As Adopted Pursuant To

Section 906 of The Sarbanes-Oxley Act of 2002

In connection with the Annual Report of Hanmi Financial Corporation (the “Company”) on Form 10-K for the period ended December 31, 2023, as filed with the Securities and Exchange Commission (the “SEC”) on the date hereof (the “Report”), I, Bonita I. Lee, President and Chief Executive Officer of the Company, certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to the best of my knowledge that:

(1)The Report fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934; and

(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of, and for, the period presented.

Date:	February 29, 2024	/s/ Bonita I. Lee
		Bonita I. Lee
		President and Chief Executive Officer

The foregoing certification is being furnished solely pursuant to 18 U.S.C. Section 1350 and is not being filed as part of the Report or as a separate disclosure statement. A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the SEC or its staff upon request.

EX-32.2

Exhibit 32.2

Certification Pursuant To

18 U.S.C. Section 1350,

As Adopted Pursuant To

Section 906 of The Sarbanes-Oxley Act of 2002

In connection with the Annual Report of Hanmi Financial Corporation (the “Company”) on Form 10-K for the period ended December 31, 2023, as filed with the Securities and Exchange Commission (the “SEC”) on the date hereof (the “Report”), I, Romolo C. Santarosa, Senior Executive Vice President and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to the best of my knowledge that:

(1)The Report fully complies with the requirements of Section13(a) or Section 15(d) of the Securities Exchange Act of 1934; and

(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of, and for, the periods presented.

Date:	February 29, 2024	/s/ Romolo C. Santarosa
		Romolo C. Santarosa
		Senior Executive Vice President and Chief Financial Officer

The foregoing certification is being furnished solely pursuant to 18 U.S.C. Section 1350 and is not being filed as part of the Report or as a separate disclosure statement. A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the SEC or its staff upon request.

EX-97.1

Exhibit 97.1

HANMI FINANCIAL CORPORATION CLAWBACK POLICY

The Board of Directors (the “Board”) of Hanmi Financial Corporation (the “Company”) believes that it is in the best interests of the Company and its shareholders to adopt this Clawback Policy (this “Policy”), which provides for the recovery of certain incentive compensation in the event of an accounting restatement.

The Company has adopted this Policy as a supplement to any other clawback policies or provisions in effect now or in the future at the Company. To the extent this Policy applies to compensation payable to a person covered by this Policy, it shall supersede any other conflicting provision or policy maintained by the Company and shall be the only clawback policy applicable to such compensation and no other clawback policy shall apply; provided that, if such other policy or provision provides that a greater amount of such compensation shall be subject to clawback, such other policy or provision shall apply to the amount in excess of the amount subject to clawback under this Policy.

This Policy shall be interpreted to comply with the clawback rules found in 17 C.F.R. §240.10D and the related listing rules of the national securities exchange or national securities association (the “Exchange”) on which the Company has listed securities, and, to the extent this Policy is any manner deemed inconsistent with such rules, this Policy shall be treated as retroactively amended to be compliant with such rules.

1. Definitions. The terms “Executive Officer,” “Incentive-Based Compensation,” and “Received” shall have the same meaning as defined in regulation 17 C.F.R. §240.10D-1(d).

2. Application of the Policy. This Policy shall only apply in the event that the Company is required to prepare an accounting restatement due to its material noncompliance with any financial reporting requirement under the Federal securities laws, including any required accounting restatement to correct an error in previously issued financial statements that is material to the previously issued financial statements, or that would result in a material misstatement if the error were corrected in the current period or left uncorrected in the current period.

3. Recovery Period. The Incentive-Based Compensation subject to clawback is the Incentive-Based Compensation Received during the three completed fiscal years immediately preceding the date that the Company is required to prepare an accounting restatement as described in Section 2; provided that the individual served as an Executive Officer at any time during the performance period applicable to the Incentive-Based Compensation in question. The date that the Company is required to prepare an accounting restatement shall be determined pursuant to 17 C.F.R. §240.10D-1(b)(1)(ii).

(a) Notwithstanding the foregoing, the Policy shall only apply if the Incentive-Based Compensation is Received (1) while the Company has a class of securities listed on an Exchange and (2) on or after October 2, 2023.

(b) See 17 C.F.R. §240.10D-1(b)(1)(i)(D) for certain circumstances under which this Policy will apply to Incentive-Based Compensation received during a transition period arising due to a change in the Company’s fiscal year.

4. Erroneously Awarded Compensation. The amount of Incentive-Based Compensation subject to the Policy (“Erroneously Awarded Compensation”) is the amount of Incentive-Based Compensation Received that exceeds the amount of Incentive Based-Compensation that otherwise would have been Received had it been determined based on the restated amounts in the Company’s financial statements and shall be computed without regard to any taxes paid.

(a) For Incentive-Based Compensation based on stock price or total shareholder return, where the amount of Erroneously Awarded Compensation is not subject to mathematical recalculation directly from the information in an accounting restatement: (1) the amount shall be based on a reasonable estimate of the effect of the accounting restatement on the stock price or total shareholder return upon which the

Incentive-Based Compensation was received; and (2) the Company must maintain documentation of the determination of that reasonable estimate and provide such documentation to the Exchange.

5. Recovery Exceptions. The Company shall recover reasonably promptly any Erroneously Awarded Compensation except to the extent that the conditions of paragraphs (a), (b), or (c) below apply. The Compensation Committee of the Board of Directors (the “Committee”) shall determine the repayment schedule for each amount of Erroneously Awarded Compensation in a manner that complies with this “reasonably promptly” requirement. Such determination shall be consistent with any applicable legal guidance, by the Securities and Exchange Commission, judicial opinion, or otherwise. The determination of “reasonably promptly” may vary from case to case and the Committee is authorized to adopt additional rules to further describe what repayment schedules satisfy this requirement.

(a) Erroneously Awarded Compensation need not be recovered if the direct expense paid to a third party to assist in enforcing the Policy would exceed the amount to be recovered and the Committee has made a determination that recovery would be impracticable. Before concluding that it would be impracticable to recover any amount of Erroneously Awarded Compensation based on expense of enforcement, the Company shall make a reasonable attempt to recover such Erroneously Awarded Compensation, document such reasonable attempt(s) to recover, and provide that documentation to the Exchange, as required.

(b) If applicable, Erroneously Awarded Compensation need not be recovered if recovery would violate home country law where that law was adopted prior to November 28, 2022. Before concluding that it would be impracticable to recover any amount of Erroneously Awarded Compensation based on violation of home country law, the Company shall obtain an opinion of home country counsel, acceptable to the Exchange, that recovery would result in such a violation and shall provide such opinion to the Exchange.

(c) Erroneously Awarded Compensation need not be recovered if recovery would likely cause an otherwise tax-qualified retirement plan, under which benefits are broadly available to employees of the Company, to fail to meet the requirements of 26 U.S.C. §401(a)(13) or 26 U.S.C. §411(a) and regulations thereunder.

6. Committee Decisions. Decisions of the Committee with respect to this Policy shall be final, conclusive and binding on all Executive Officers subject to this Policy, unless determined by a court of competent jurisdiction to be an abuse of discretion.

7. No Indemnification. Notwithstanding anything to the contrary in any other policy of the Company or any agreement between the Company and an Executive Officer, no Executive Officer shall be indemnified by the Company against the loss of any Erroneously Awarded Compensation.

8. Agreement to Policy by Executive Officers. The Committee shall take reasonable steps to inform Executive Officers of this Policy and the Executive Officers shall acknowledge receipt and adherence to this Policy in writing.

9. Exhibit Filing Requirement. A copy of this Policy and any amendments thereto shall be filed as an exhibit to the Company’s annual report on Form 10-K.

10. Amendment. The Board may amend, modify or supplement all or any portion of this Policy at any time and from time to time in its discretion.

[TO BE SIGNED BY EACH OF THE COMPANY’S EXECUTIVE OFFICERS]

Clawback Policy Acknowledgment

I, the undersigned, agree and acknowledge that I am fully bound by, and subject to, all of the terms and conditions of Hanmi Financial Corporation’s Clawback Policy (as may be amended, restated, supplemented or otherwise modified from time to time, the “Policy”) and that I have been provided a copy of the Policy. In the event of any inconsistency between the Policy and the terms of any employment or similar agreement to which I am a party, or the terms of any compensation plan, program or agreement under which any compensation has been granted, awarded, earned or paid, the terms of the Policy shall govern. If the Committee determines that any amounts granted, awarded, earned or paid to me must be forfeited or reimbursed to the Company, I will promptly take any action necessary to effectuate such forfeiture and/or reimbursement.

Name	Date:
Title

XML

Cover Page - USD ($)

12 Months Ended

Dec. 31, 2023

Feb. 21, 2024

Jun. 30, 2023

Cover [Abstract]

Document Type

10-K

Amendment Flag

false

Document Period End Date

Dec. 31, 2023

Document Fiscal Year Focus

2023

Document Fiscal Period Focus

FY

Trading Symbol

HAFC

Entity Registrant Name

HANMI FINANCIAL CORPORATION

Entity Central Index Key

0001109242

Current Fiscal Year End Date

--12-31

Entity Well-known Seasoned Issuer

No

ICFR Auditor Attestation Flag

true

Entity Voluntary Filers

No

Entity Filer Category

Accelerated Filer

Entity Small Business

false

Entity Emerging Growth Company

false

Document Financial Statement Error Correction [Flag]

false

Entity Common Stock, Shares Outstanding

30,267,113

Entity Current Reporting Status

Yes

Entity Shell Company

false

Entity File Number

000-30421

Entity Incorporation, State or Country Code

DE

Entity Tax Identification Number

95-4788120

Entity Address, Address Line One

900 Wilshire Boulevard

Entity Address, Address Line Two

Suite 1250

Entity Address, City or Town

Los Angeles

Entity Address, State or Province

CA

Entity Address, Postal Zip Code

90017

City Area Code

213

Local Phone Number

382-2200

Entity Interactive Data Current

Yes

Title of 12(b) Security

Common Stock, $0.001 Par Value

Security Exchange Name

NASDAQ

Document Annual Report

true

Document Transition Report

false

Entity Public Float

$ 447,656,208

Auditor Firm ID

173

Auditor Name

Crowe LLP

Auditor Location

Los Angeles, California

Documents Incorporated by Reference

Documents Incorporated By Reference Herein: Sections of the Registrant’s Definitive Proxy Statement for its 2024 Annual Meeting of Stockholders, which will be filed within 120 days of the fiscal year ended December 31, 2023, are incorporated by reference into Part III of this report (or information will be provided by amendment to this Form 10-K), as noted therein.

XML

Consolidated Balance Sheets - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Assets
Cash and due from banks	$ 302,324	$ 352,421
Securities available for sale, at fair value (amortized cost of $967,031 and $978,796 as of December 31, 2023 and 2022, respectively)	865,739	853,838
Loans held for sale, at the lower of cost or fair value	12,013	8,043
Loans receivable, net of allowance for credit losses of $69,462 and $71,523 as of December 31, 2023 and 2022, respectively	6,112,972	5,895,610
Accrued interest receivable	23,371	18,537
Premises and equipment, net	21,959	22,850
Customers' liability on acceptances	625	328
Servicing assets	7,070	7,176
Goodwill and other intangible assets, net	11,099	11,225
Federal Home Loan Bank ("FHLB") stock, at cost	16,385	16,385
Income tax assets	35,226	51,924
Bank-owned life insurance	56,335	55,544
Prepaid expenses and other assets	105,223	84,381
Total assets	7,570,341	7,378,262
Deposits:
Noninterest-bearing	2,003,596	2,539,602
Interest-bearing	4,276,978	3,628,470
Total deposits	6,280,574	6,168,072
Accrued interest payable	39,306	7,792
Bank's liability on acceptances	625	328
Borrowings	325,000	350,000
Subordinated debentures ($136,800 and $136,800 face amount less unamortized discount and debt issuance costs of $6,788 and $7,391 as of December 31, 2023 and 2022, respectively)	130,012	129,409
Accrued expenses and other liabilities	92,933	85,146
Total liabilities	6,868,450	6,740,747
Stockholders' equity:
Preferred Stock, $0.001 par value; authorized 10,000,000 shares; no shares issued as of December 31, 2023 and December 31, 2022
Common stock, $0.001 par value; authorized 62,500,000 shares; issued 33,918,035 shares (30,368,655 shares outstanding) and 33,708,234 shares (30,485,621 shares outstanding) as of December 31, 2023 and 2022, respectively	34	33
Additional paid-in capital	586,912	583,410
Accumulated other comprehensive loss, net of tax benefit of $29,058 and $35,973 as of December 31, 2023 and 2022, respectively	(71,928)	(88,985)
Retained earnings	319,048	269,542
Less: treasury stock; 3,549,380 shares and 3,222,613 shares as of December 31, 2023 and 2022, respectively	(132,175)	(126,485)
Total stockholders' equity	701,891	637,515
Total liabilities and stockholders' equity	$ 7,570,341	$ 7,378,262

XML

Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Statement of Financial Position [Abstract]
Amortized cost of securities available for sale	$ 967,031	$ 978,796
Loans receivable, allowance for credit losses	69,462	71,523
Face amount of subordinated debentures	136,800	136,800
Unamortized discount and debt issuance costs	$ 6,788	$ 7,391
Preferred stock par value (in USD per share)	$ 0.001	$ 0.001
Preferred stock authorized (shares)	10,000,000	10,000,000
Preferred stock issued (shares)	0	0
Common stock par value (in USD per share)	$ 0.001	$ 0.001
Common stock authorized (shares)	62,500,000	62,500,000
Common stock issued (shares)	33,918,035	33,708,234
Common stock outstanding (shares)	30,368,655	30,485,621
Accumulated other comprehensive loss, tax benefit	$ (29,058)	$ (35,973)
Treasury stock (shares)	3,549,380	3,222,613

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Consolidated Statements of Income - USD ($) $ in Thousands		12 Months Ended
		Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Interest and dividend income:
Interest and fees on loans receivable		$ 339,811	$ 257,878	$ 208,602
Interest on securities		16,938	12,351	6,230
Dividends on FHLB stock		1,229	1,024	941
Interest on deposits in other banks		11,350	2,560	902
Total interest and dividend income		369,328	273,813	216,675
Interest expense:
Interest on deposits		134,708	25,938	11,655
Interest on borrowings		6,867	2,249	1,697
Interest on subordinated debentures		6,482	7,979	8,273
Total interest expense		148,057	36,166	21,625
Net interest income before credit loss expense		221,271	237,647	195,050
Credit loss expense (recovery)		4,342	836	(24,403)
Net interest income after credit loss expense (recovery)		216,929	236,811	219,453
Noninterest income:
Service charges on deposit accounts		10,147	11,488	11,043
Trade finance and other service charges and fees		4,832	4,805	4,628
Gain on sale of SBA loans		5,701	9,478	17,266
Net gain (loss) on sales of securities		(1,871)		(499)
Other operating income		15,370	8,429	8,058
Total noninterest income		34,179	34,200	40,496
Noninterest expense:
Salaries and employee benefits		81,398	76,140	72,561
Occupancy and equipment		18,340	17,648	19,075
Data processing		13,695	13,134	12,003
Professional fees		6,255	5,692	5,566
Supplies and communications		2,479	2,638	3,026
Advertising and promotion		3,105	3,637	2,649
Other operating expenses		11,255	11,395	9,575
Total noninterest expense		136,527	130,284	124,455
Income before tax		114,581	140,727	135,494
Income tax expense		34,540	39,333	36,817
Net income		$ 80,041	$ 101,394	$ 98,677
Basic earnings per share	[1]	$ 2.63	$ 3.33	$ 3.22
Diluted earnings per share	[1]	$ 2.62	$ 3.32	$ 3.22
Weighted-average shares outstanding:
Basic		30,269,740	30,299,148	30,393,559
Diluted		30,330,258	30,392,057	30,471,747

[1] Per share amounts may not be able to be recalculated using net income and weighted-average shares presented above due to rounding.

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Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Statement of Comprehensive Income [Abstract]
Net income	$ 80,041	$ 101,394	$ 98,677
Unrealized gain (loss):
Unrealized holding gain (loss) arising during period	21,795	(113,094)	(17,185)
Unrealized gain on cash flow hedge	306
Unrealized gain (loss)	22,101	(113,094)	(17,185)
Income tax benefit (expense) related to items of other comprehensive income	(6,351)	32,552	5,303
Other comprehensive income (loss), net of tax	15,750	(80,542)	(11,882)
Reclassification adjustment for losses included in net earnings	1,871		499
Income tax benefit related to reclassification adjustment	(564)		(136)
Reclassification adjustment for losses included in net earnings, net of tax	1,307		363
Other comprehensive income (loss), net of tax	17,057	(80,542)	(11,519)
Total comprehensive income	$ 97,098	$ 20,852	$ 87,158

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Consolidated Statements of Changes in Stockholders' Equity - USD ($) $ in Thousands	Total	Common Stock - Number of Shares, Shares Issued	Treasury Stock, Common [Member]	Additional Paid-in Capital	Accumulated Other Comprehensive Income (Loss)	Retained Earnings
Balance at beginning of period at Dec. 31, 2020	$ 577,044	$ 33	$ (119,046)	$ 578,360	$ 3,076	$ 114,621
Beginning balance, shares issued (shares) at Dec. 31, 2020		33,560,801
Beginning balance, treasury stock (shares) at Dec. 31, 2020			(2,842,966)
Beginning balance, shares outstanding (shares) at Dec. 31, 2020		30,717,835
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of awards pursuant to equity incentive plans, net of forfeitures (shares)		43,038
Share-based compensation expense	2,436			2,436
Shares surrendered to satisfy tax liability upon vesting of equity awards	(572)		$ (572)
Shares surrendered to satisfy tax liability upon vesting of equity awards (shares)		(24,953)	(24,953)
Repurchase of common stock	(6,135)		$ (6,135)
Repurchase of common stock (shares)		(328,659)	(328,659)
Cash dividends paid (common stock, $0.54/share, $0.94/share, $1.00/share)	(16,514)					(16,514)
Net income	98,677					98,677
Change in unrealized gain (loss) on securities available for sale, net of income taxes	(11,519)				(11,519)
Balance at end of period at Dec. 31, 2021	643,417	$ 33	$ (125,753)	580,796	(8,443)	196,784
Ending balance, shares issued (shares) at Dec. 31, 2021		33,603,839
Ending balance, treasury stock (shares) at Dec. 31, 2021			(3,196,578)
Ending balance, shares outstanding (shares) at Dec. 31, 2021		30,407,261
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock options exercised	19			19
Stock options exercised (shares)		1,500	1,500
Issuance of awards pursuant to equity incentive plans, net of forfeitures (shares)		104,395
Share-based compensation expense	2,595			2,595
Shares surrendered to satisfy tax liability upon vesting of equity awards	(732)		$ (732)
Shares surrendered to satisfy tax liability upon vesting of equity awards (shares)		(27,535)	(27,535)
Cash dividends paid (common stock, $0.54/share, $0.94/share, $1.00/share)	(28,636)					(28,636)
Net income	101,394					101,394
Change in unrealized gain (loss) on securities available for sale, net of income taxes	(80,542)				(80,542)
Balance at end of period at Dec. 31, 2022	$ 637,515	$ 33	$ (126,485)	583,410	(88,985)	269,542
Ending balance, shares issued (shares) at Dec. 31, 2022		33,708,234
Ending balance, treasury stock (shares) at Dec. 31, 2022	3,222,613		(3,222,613)
Ending balance, shares outstanding (shares) at Dec. 31, 2022		30,485,621
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock options exercised			$ (821)	821
Stock options exercised (shares)		50,000	(35,273)
Stock options exercised, shares outstanding (shares)		14,727
Issuance of awards pursuant to equity incentive plans, net of forfeitures	$ 1	$ 1
Issuance of awards pursuant to equity incentive plans, net of forfeitures (shares)		159,801
Share-based compensation expense	2,681			2,681
Shares surrendered to satisfy tax liability upon vesting of equity awards	(785)		$ (785)
Shares surrendered to satisfy tax liability upon vesting of equity awards (shares)		(41,494)	(41,494)
Repurchase of common stock	(4,084)		$ (4,084)
Repurchase of common stock (shares)		(250,000)	(250,000)
Cash dividends paid (common stock, $0.54/share, $0.94/share, $1.00/share)	(30,535)					(30,535)
Net income	80,041					80,041
Change in unrealized gain (loss) on securities available for sale, net of income taxes	16,839				16,839
Change in unrealized gain (loss) on cash flow hedge, net of income taxes	218				218
Balance at end of period at Dec. 31, 2023	$ 701,891	$ 34	$ (132,175)	$ 586,912	$ (71,928)	$ 319,048
Ending balance, shares issued (shares) at Dec. 31, 2023		33,918,035
Ending balance, treasury stock (shares) at Dec. 31, 2023	3,549,380		(3,549,380)
Ending balance, shares outstanding (shares) at Dec. 31, 2023		30,368,655

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Consolidated Statements of Changes in Stockholders' Equity (Parenthetical) - $ / shares	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Statement of Stockholders' Equity [Abstract]
Common stock (in usd per share)	$ 1	$ 0.94	$ 0.54

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Consolidated Statements of Cash Flows - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Cash flows from operating activities:
Net income	$ 80,041	$ 101,394	$ 98,677
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	6,793	12,384	13,797
Amortization of servicing assets - net	2,456	2,672	2,292
Share-based compensation expense	2,681	2,595	2,436
Credit loss expense (recovery)	4,342	836	(24,403)
Loss on sales of securities	1,871		499
Gain on sales of SBA loans	(5,701)	(9,478)	(17,266)
Origination of SBA loans held for sale	(104,998)	(150,825)	(265,743)
Proceeds from sales of SBA loans	104,250	165,587	274,132
Change in bank-owned life insurance	(791)	(639)	(1,011)
Gain on sale of fixed assets	(3,957)		(45)
Change in prepaid expenses and other assets	(28,938)	(24,612)	2,657
Change in income tax assets	9,783	24,688	3,312
Valuation adjustment on servicing assets	(385)	385
Change in accrued interest payable and other liabilities	40,352	22,321	4,395
Net cash provided by operating activities	107,799	147,308	93,729
Cash flows from investing activities:
Purchases of securities available for sale	(106,971)	(166,564)	(513,243)
Proceeds from matured, called and repayment of securities	105,848	105,979	275,624
Proceeds from sales of securities available for sale	8,149		55,884
Purchases of loans receivable	(9,657)	(11,200)	(28,862)
Purchases of premises and equipment	(2,419)	(1,926)	(2,724)
Proceeds from disposition of premises and equipment	7,229		45
Proceeds from sales of other real estate owned ("OREO")		809	1,479
Change in loans receivable, excluding purchases	(212,173)	(808,604)	(235,242)
Net cash used in investing activities	(209,994)	(881,506)	(447,039)
Cash flows from financing activities:
Change in deposits	112,502	381,803	511,261
Change in borrowings	(25,000)	212,500	(12,500)
Issuance of subordinated debentures			107,929
Redemption of subordinated debentures, net of treasury debentures		(87,300)	(13,043)
Proceeds from exercise of stock options		19
Cash paid for employee vested shares surrendered due to employee tax liability	(785)	(732)	(572)
Repurchase of common stock	(4,084)		(6,135)
Cash dividends paid	(30,535)	(28,636)	(16,514)
Net cash provided by financing activities	52,098	477,654	570,426
Net increase (decrease) in cash and due from banks	(50,097)	(256,544)	217,116
Cash and due from banks at beginning of year	352,421	608,965	391,849
Cash and due from banks at end of period	302,324	352,421	608,965
Supplemental disclosures of cash flow information:
Interest expense paid	116,543	29,535	25,028
Income taxes paid	16,536	12,728	31,400
Non-cash activities:
Transfer of loans receivable to other real estate owned		117
Income tax (expense) benefit related to items of other comprehensive income	(6,915)	32,552	4,668
Change in right-of-use asset obtained in exchange for lease liability	8,109	$ 408	$ 2,805
Cashless exercise of stock options	$ 821

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Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2023

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

Note 1 — Summary of Significant Accounting Policies

Summary of Operations

Hanmi Financial Corporation (“Hanmi Financial,” the “Company,” “we,” “us” or “our”) is the holding company of Hanmi Bank (the “Bank”).

The Bank is a California state-chartered financial institution, the deposits of which are insured by the FDIC, up to applicable limits. The Bank is a state nonmember bank and the FDIC is its primary federal bank regulator. The California Department of Financial Protection and Innovation is the Bank's primary state bank regulator.

The Bank’s primary operations are related to traditional banking activities, including the acceptance of deposits and originating loans and investing in securities. The Bank is a community bank conducting general business banking, with its primary market encompassing the Korean-American and other ethnic communities. The Bank’s full-service offices are located in markets where many of the businesses are owned by immigrants and other minority groups. The Bank’s client base reflects the multi-ethnic composition of these communities. As of December 31, 2023, the Bank maintained a network of 35 full-service branch offices and eight loan production offices in California, Texas, Illinois, Virginia, New Jersey, New York, Colorado, Georgia and Washington.

Basis of Presentation

The accounting and reporting policies of Hanmi Financial and subsidiaries conform, in all material respects, to U.S. generally accepted accounting principles (“GAAP”) and general practices within the banking industry. The information set forth in the following notes is presented on a continuing operations basis. The following is a summary of the significant accounting policies consistently applied in the preparation of the accompanying Consolidated Financial Statements.

Principles of Consolidation

The Consolidated Financial Statements include the accounts of Hanmi Financial and its wholly-owned subsidiaries, the Bank, and Hanmi Financial Corporation Statutory Trust I. All intercompany transactions and balances have been eliminated in consolidation.

Use of Estimates in the Preparation of Financial Statements

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Reclassifications

Certain amounts in the prior years' financial statements and related disclosures were reclassified to conform to the current year presentation with no effect on previously reported net income, stockholders’ equity or cash flows.

Segment Reporting

Through our branch network and lending units, we provide a broad range of financial products and services to individuals and companies. These products include demand, time and savings deposits; and commercial and industrial, real estate and consumer lending. While our chief decision makers monitor the revenue streams of our various products and services, operations are managed and financial performance is evaluated on a company-wide basis. Accordingly, we consider all of our operations to be aggregated in one reportable operating segment.

Cash and Due from Banks

Cash and due from banks include cash, deposits with other financial institutions, and federal funds sold. Net cash flows are reported for customer loan and deposit transactions, interest bearing deposits in other financial institutions, and federal funds purchased and repurchase agreements.

Securities

Securities are classified into three categories and accounted for as follows:

(i)Securities that we have the positive intent and ability to hold to maturity are classified as “held to maturity” and reported at amortized cost;

(ii)Securities that are bought and held principally for the purpose of selling them in the near future are classified as “trading securities” and reported at fair value. Unrealized gains and losses are recognized in earnings;

(iii)Securities not classified as held to maturity or trading securities are classified as “available for sale” and reported at fair value. Unrealized gains and losses are reported either in earnings or as a separate component of stockholders’ equity as accumulated other comprehensive income, net of income taxes.

All of the securities held by the Company are available for sale debt securities. For available for sale debt securities in an unrealized loss position, the Company first assesses whether it intends to sell, or it is more likely than not that it will be required to sell, the security before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the security’s amortized cost basis is written down to fair value through income. For available for sale debt securities that do not meet the aforementioned criteria, the Company evaluates whether the decline in fair value has resulted from credit losses or other factors. In making this assessment, management considers the extent to which fair value is less than amortized cost, any changes to the rating of the security by a rating agency, and adverse conditions specifically related to the security, among other factors. If this assessment indicates that a credit loss exists, the present value of cash flows expected to be collected from the security are compared to the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis, a credit loss is recorded and an allowance for credit losses is established, limited by the amount that the fair value is less than the amortized cost basis. Any impairment that has not been recorded through an allowance for credit losses is recognized in other comprehensive income.

Changes in the allowance for credit losses are recorded as a provision for or recovery of credit loss expense. Losses are charged against the allowance when management believes the risk of default of an available for sale security is confirmed or when either of the criteria regarding intent or requirement to sell is met.

Accrued interest receivable on available for sale debt securities totaled $3.3 million and $2.4 million at December 31, 2023 and 2022, respectively, and was excluded from the estimate of credit losses.

Loans receivable

Originated loans: Loans (other than SBA loans) are primarily originated by the Company with the intent to hold them for investment and are stated at the principal amount outstanding, net of deferred fees and costs. Net deferred fees and costs include nonrefundable loan fees, direct loan origination costs and initial direct costs. Net deferred fees or costs are recognized as an adjustment to interest income over the contractual life of the loans using the effective interest method or taken into income when the related loans are paid off or sold. The amortization of loan fees or costs is discontinued when a loan is placed on nonaccrual status. Interest income is recorded on an accrual basis in accordance with the terms of the respective loan and includes prepayment penalties. Equipment financing agreements are similar to commercial business loans in that the financing agreements are typically made on the basis of the borrower’s ability to make repayment from the cash flows of the borrower’s business.

Nonaccrual loans and nonperforming assets: Loans are placed on nonaccrual status when, in the opinion of management, the full timely collection of principal or interest is in doubt. Generally, the accrual of interest is discontinued when principal or interest payments become 90 or more days past due, unless management believes the loan is adequately collateralized and is in the process of collection. However, in certain instances, we may place a loan on nonaccrual status earlier, depending upon the individual circumstances surrounding the loan’s status. When an asset is placed on nonaccrual, previously accrued but unpaid interest is reversed against current interest income. Subsequent collections of cash are applied as principal reductions when received, except when the ultimate collectability of principal is probable, in which case interest payments are credited to income. Nonaccrual loans may be restored to accrual status when principal and interest become current and full repayment is expected, which generally occurs after payments of six months.

Nonperforming assets consist of loans on nonaccrual status, loans 90 days or more past due and still accruing interest, and OREO.

Loans held for sale

Loans originated, or transferred from loans receivable, and intended for sale in the secondary market are carried at the lower of aggregate cost or fair market value. Fair market value, if lower than cost, is determined based on valuations obtained from market participants or the value of underlying collateral, calculated individually. A valuation allowance is established if the market value of such loans is lower than their cost and net unrealized losses, if any, are recognized through a valuation allowance by charges to income. Origination fees on loans held for sale, net of certain costs of processing and closing the loans, are deferred until the time of sale and are included in the computation of the gain or loss from the sale of the related loans.

Allowance for credit losses

The Company calculates its allowance for credit losses by estimating expected credit losses on a collective basis for loans that share similar risk characteristics. Loans that do not share similar risk characteristics with other loans are evaluated for credit losses on an individual basis. The Company segments loans primarily by loan types, including the collateral type, loan purpose, contract term, amortization and payment structure, considering that the same type of loans share considerable similar risk characteristics. Depending on the type of the pool of financial assets with similar risk characteristics, the Company uses a DCF method, a PD/LGD method, or a WARM method to estimate expected credit losses.

The Company’s methodologies for estimating the allowance for credit losses consider available relevant information about the collectability of cash flows, including information about past events, current conditions, and reasonable and supportable forecasts. The methodologies apply historical loss information, adjusted for asset-specific characteristics, economic conditions at the measurement date, and forecasts about future economic conditions expected to exist through the contractual lives of the financial assets that were reasonable and supportable, to the identified pools of financial assets with similar risk characteristics. For all methodologies, the Company determined that four quarters represented a reasonable and supportable forecast period and revert to a historical loss rate over twelve quarters on a straight-line basis. The Company leverages quarterly economic projections from the Federal Open Market Committee and Moody’s Analytics to inform its loss driver forecasts over the four-quarter forecast period, utilizing the national unemployment rate forecast as the primary loss driver. The Company applies an expected loss ratio based on internal historical losses adjusted as appropriate for qualitative factors. The Company's evaluation of market, industry or business specific data, changes in the underlying portfolio composition, trends relating to credit quality, delinquencies, and reasonable and supportable forecasts of economic conditions informed the estimate of qualitative factors.

The Company estimated the allowance for credit losses on loans based on the underlying assets’ amortized cost basis. In the event that collection of principal becomes uncertain, the Company has policies in place to reverse accrued interest in a timely manner. Therefore, the Company has a policy to exclude accrued interest from the measurement of allowance for credit losses.

Expected credit losses are reflected in the allowance for credit losses through a charge to credit loss expense. When the Company deems all or a portion of a financial asset to be uncollectible, the appropriate amount is written off and the allowance for credit losses is reduced by the same amount. Subsequent recoveries, if any, are credited to the allowance for credit losses when received.

Credit Losses on Off-Balance Sheet Credit Exposures

The Company has credit loss exposure for off-balance sheet lending commitments. The Company estimates expected credit losses for off-balance sheet exposures over the contractual period in which it is exposed to credit risk via a contractual obligation to extend credit, unless that obligation is unconditionally cancellable by the Company. The estimate includes consideration of the likelihood that funding will occur and an estimate of expected credit losses on commitments expected to be funded over its estimated life. Adjustments to the allowance for credit losses on off-balance sheet credit exposures is recognized as a provision for credit loss expense.

Individually Evaluated Loans

Individually evaluated loans are measured for expected credit losses based on the present value of expected cash flows discounted at the effective interest rate, the observable market price, or the fair value of collateral. The allowance for collateral dependent loans is calculated as the difference between the outstanding loan balance and the value of the collateral as determined by recent appraisals, less estimated costs to sell. The allowance for collateral dependent loans varies based on the collateral coverage of the loan at the time of the designation as nonperforming. We continue to monitor the collateral coverage on these loans on a quarterly basis, based on recent appraisals, and adjust the allowance accordingly.

Premises and Equipment

Premises and equipment are stated at cost, less accumulated depreciation and amortization. Depreciation and amortization are computed on the straight-line method over the estimated useful lives of the various classes of assets. The ranges of useful lives for the principal classes of assets are as follows:

Buildings and improvements	10 to 30 years
Furniture and equipment	3 to 10 years
Leasehold improvements	Term of lease or useful life, whichever is shorter
Software	3 to 7 years

Impairment of Long-Lived Assets

We review long-lived assets and certain identifiable intangibles for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future net undiscounted cash flows expected to be generated by the asset. If such assets are considered to be nonperforming, the individual amount to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell.

Other Real Estate Owned and Repossessed Personal Property

Other real estate owned includes real estate acquired through foreclosure and other real estate holdings that are not used in the operation of the Company’s business. Repossessed personal property consists of equipment repossessed on defaulted equipment financing agreements. Other real estate owned and repossessed personal property are recorded at the lower of cost or fair value less estimated costs to sell. Subsequent declines in fair value are recorded through expense.

Servicing Assets

Servicing assets are initially recorded at fair value, which represents the price paid, and amortized in proportion to, and over the period of, estimated net servicing income.

Servicing assets are recorded based on the present value of the contractually specified servicing fee, net of adequate compensation cost, for the estimated life of the loan, using a discount rate and a constant prepayment rate. Management periodically evaluates the servicing assets for impairment. Impairment, if it occurs, is recognized in a valuation allowance in the period of impairment.

Goodwill and Other Intangible Assets

Goodwill and other intangible assets consist of acquired intangible assets arising from acquisitions, including core deposit and third-party originator intangibles. The acquired intangible assets are initially measured at fair value and then are amortized on the straight-line method over their estimated useful lives while goodwill is not amortized.

Goodwill and other intangible assets are assessed for impairment annually or whenever events or changes in circumstances indicate the carrying amount may not be recoverable. The Company performed its annual impairment test and determined no impairment existed as of December 31, 2023.

Federal Home Loan Bank Stock

The Bank is a member of the FHLB of San Francisco and is required to own common stock in the FHLB based upon the Bank’s balance of outstanding FHLB advances. FHLB stock is carried at cost and may be sold back to the FHLB at its carrying

value. FHLB stock is periodically evaluated for impairment based on ultimate recovery of par value. Both cash and stock dividends received are reported as dividend income.

Bank-Owned Life Insurance

We have purchased single premium life insurance policies (“bank-owned life insurance”) on certain current and former officers. The Bank and named beneficiaries of various current and former covered officers are the beneficiaries under each policy. In the event of the death of a covered officer, the Bank and named beneficiaries of the covered officer will receive the specified insurance benefit from the insurance carrier. Bank-owned life insurance is recorded at the amount that can be realized under the insurance contract at the balance sheet date, which is the cash surrender value adjusted for other charges or other amounts due, if any, that are probable at settlement. Under the Split Dollar Death Benefit Agreements, upon death of an active or former employee, the designated beneficiary(ies) are eligible to receive benefits, which in the aggregate, totaled $2.5 million at December 31, 2023.

Revenue Recognition

ASU 2014-09, Revenue from Contracts with Customers (Topic 606), established a principles-based approach to recognizing revenue that applies to all contracts other than those covered by other authoritative U.S. GAAP guidance. Quantitative and qualitative disclosures regarding the nature, amount, timing and uncertainty of revenue and cash flows are also required. The standard’s core principle is that a company shall recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. In doing so, companies generally are required to use more judgment and make more estimates than under prior guidance. These may include identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation.

Since the guidance does not apply to revenue associated with financial instruments, including loans and securities that are accounted for under GAAP, the new guidance did not have an impact on revenue most closely associated with our financial instruments, including interest income and expense. The Company completed its overall assessment of revenue streams and review of related contracts potentially affected by the ASU, including revenue streams associated with our noninterest income. Based on this assessment, the Company concluded that ASU 2014-09 did not change the method in which the Company currently recognizes revenue for these revenue streams.

The Company's noninterest income primarily includes service charges on deposit accounts, trade finance and other service charges and fees, servicing income, bank-owned life insurance income and gains or losses on sale of SBA loans and securities. Based on our assessment of revenue streams related to the Company's noninterest income, we concluded that the Company's performance obligations for such revenue streams are typically satisfied as services are rendered. If applicable, the Company records contract liabilities, or deferred revenue, when payments from customers are received or due in advance of providing services to customers, and records contract assets when services are provided to customers before payment is received or before payment is due. The Company’s noninterest revenue streams are largely based on transactional activities and since the Company generally receives payments for its services during the period or at the time services are provided, there are no contract asset or receivable balances as of December 31, 2023 and 2022. Consideration is often received immediately or shortly after the Company satisfies its performance obligations and revenue is recognized.

The Company also completed its evaluation of certain costs related to these revenue streams to determine whether such costs should be presented as expenses or contra-revenue (i.e., gross versus net) and concluded that our Consolidated Statements of Income do not include any revenue streams that are impacted by such gross versus net provisions of the standard.

Income Tax

We provide for income taxes using the asset and liability method. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is provided when it is more likely than not that some portion or all of the deferred tax assets will not be realized.

The Company has invested in limited partnerships formed to develop and operate affordable housing units for lower income tenants throughout California. The partnership interests are accounted for utilizing the proportional amortization method with amortization expense and tax benefits recognized through the income tax provision.

Share-Based Compensation

The Company may provide awards of options, stock appreciation rights, restricted stock awards, restricted stock unit awards, shares granted as a bonus or in lieu of another award, dividend equivalents, other stock-based awards, or performance awards, together with any other right or interest to a participant. Plan participants may include executives and other employees, officers, directors, consultants and other persons who provide services to the Company or its related entities. All stock options granted under its stock-based benefit plans have an exercise price equal to the fair market value of the underlying common stock on the date of grant. Stock options granted generally vest based on three to five years of continuous service and expire 10 years from the date of grant. Restricted stock awards become fully vested after a certain number of years or after certain performance criteria are met. Performance stock units vest upon achievement of certain criteria and may have dividend equivalent rights associated with them. Hanmi Financial becomes entitled to an income tax deduction in an amount equal to the taxable income reported by the holders of the restricted shares when the restrictions are released and the shares are issued. Restricted shares are forfeited if officers and employees terminate employment prior to the lapsing of restrictions or if certain market condition criteria are not met. Forfeitures of restricted stock are treated as canceled shares.

Excess tax benefits from the exercise or vesting of share-based awards are included as a reduction in the provision for income tax expense in the period in which the exercise or vesting occurs.

Earnings per Share

Earnings per share (“EPS”) is calculated on both a basic and a diluted basis. Basic EPS excludes dilution and is computed by dividing income available to common stockholders by the weighted-average number of common shares outstanding for the period. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted from the issuance of common stock that then shared in earnings. For diluted EPS, the weighted-average number of common shares included the impact of unvested restricted stock under the treasury method.

Unvested restricted stock containing rights to non-forfeitable dividends are considered participating securities prior to vesting and have been included in the earnings allocation in computing basic and diluted EPS under the two-class method.

Treasury Stock

In January 2019, the Company's board of directors adopted a stock repurchase program, under which the Company may repurchase up to 5.0% of its then outstanding shares, or approximately 1.5 million shares of its common stock. The program permits shares to be repurchased in open market or private transactions, through block trades, and pursuant to any trading plan that may be adopted in accordance with Rule 10b5-1 of the Securities and Exchange Commission. The repurchase program may be suspended, terminated or modified at any time for any reason, including market conditions, the cost of repurchasing shares, the availability of alternative investment opportunities, liquidity, and other factors deemed appropriate. These factors may also affect the timing and amount of share repurchases. The repurchase program does not obligate the Company to purchase any particular number of shares. During the year ended December 31, 2023, there were 250,000 shares repurchased, for a total cost of $4.1 million.

We use the cost method of accounting for treasury stock. The cost method requires us to record the reacquisition cost of treasury stock as a deduction from stockholders’ equity on the Consolidated Balance Sheets.

Fair Value of Financial Instruments

Fair values of financial instruments are estimated using relevant market information and other assumptions, as more fully disclosed in a separate note. Fair value estimates involve uncertainties and matters of significant judgment regarding interest rates, credit risk, prepayments, and other factors, especially in the absence of broad markets for particular items. Changes in assumptions or in market conditions could significantly affect these estimates.

Derivative Instruments and Hedging Activities

FASB ASC 815, Derivatives and Hedging (“ASC 815”), provides the disclosure requirements for derivatives and hedging activities with the intent to provide users of financial statements with an enhanced understanding of: (a) how and why an entity uses derivative instruments, (b) how the entity accounts for derivative instruments and related hedged items, and (c) how derivative instruments and related hedged items affect an entity’s financial position, financial performance, and cash flows. Further, qualitative disclosures are required that explain the Company’s objectives and strategies for using derivatives, as well as quantitative disclosures about the fair value of and gains and losses on derivative instruments, and disclosures about credit-risk-related contingent features in derivative instruments.

As required by ASC 815, the Company records all derivatives on the balance sheet at fair value. The accounting for changes in the fair value of derivatives depends on the intended use of the derivative, whether the Company has elected to designate a derivative in a hedging relationship and apply hedge accounting and whether the hedging relationship has satisfied the criteria necessary to apply hedge accounting. Derivatives designated and qualifying as a hedge of the exposure to changes in the fair value of an asset, liability, or firm commitment attributable to a particular risk, such as interest rate risk, are considered fair value hedges. Derivatives designated and qualifying as a hedge of the exposure to variability in expected future cash flows, or other types of forecasted transactions, are considered cash flow hedges. Derivatives may also be designated as hedges of the foreign currency exposure of a net investment in a foreign operation. Hedge accounting generally provides for the matching of the timing of gain or loss recognition on the hedging instrument with the recognition of the changes in the fair value of the hedged asset or liability that are attributable to the hedged risk in a fair value hedge or the earnings effect of the hedged forecasted transactions in a cash flow hedge. The Company may enter into derivative contracts that are intended to economically hedge a certain level of its risk, even though hedge accounting does not apply or the Company elects not to apply hedge accounting.

In accordance with the FASB’s fair value measurement guidance in ASU 2011-04, Fair Value Measurement (Topic 820), the Company made an accounting policy election to measure the credit risk of its derivative financial instruments that are subject to master netting agreements on a net basis by counterparty portfolio.

Accounting Standards Adopted in 2023

ASU 2022-02, Troubled Debt Restructurings and Vintage Disclosures (Topic 326): The FASB amended the accounting and disclosure requirements for expected credit losses by removing the recognition and measurement guidance on TDRs and enhancing disclosures pertaining to certain loan refinancings and restructurings by creditors made to borrowers experiencing financial difficulty. Additionally, this standard requires disclosure of current-period gross write-offs by year of origination for financing receivables.

The standard became effective for the Company for the interim and annual periods beginning on January 1, 2023. The adoption of ASU 2022-02 did not have a material effect on the Company’s operating results or financial condition.

ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting: In March 2020, the FASB issued ASU 2020-04 to ease the potential burden in accounting for reference rate reform. The amendments in ASU 2020-04 are elective and apply to all entities that have contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued due to reference rate reform.

ASU 2022-06, Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848: In March 2021, it was announced LIBOR would cease on June 30, 2023. Because the current relief in Topic 848 may not cover a period of time during which a significant number of modifications may take place, the amendments in this ASU will be deferred to December 31, 2024.

The new guidance on Topic 848 provided several optional expedients that reduce costs and complexity of accounting for reference rate reform, including measures to simplify or modify accounting issues resulting from reference rate reform for contract modifications, hedges, and debt securities.

The adoption of ASU 2020-04 did not have a material effect on the Company’s operating results or financial condition.

Recently Issued Accounting Standards Not Yet Effective

ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures: In December 2023, the FASB issued ASU 2023-09 to enhance the transparency and decision usefulness of income tax disclosures primarily related to income tax rate reconciliation and income taxes information. The amendments in ASU 2023-09 are effective for fiscal years beginning after December 15, 2024. The adoption of ASU 2023-09 is not expected to have material effect on the Company’s operating results or financial condition.

ASU 2023-07, Segment Reporting (Topic 280): Segment Reporting: In November 2023, the FASB issued ASU 2023-07 to provide updates that improve reportable segment disclosure requirements, primarily through enhanced disclosures on significant segment expenses. The amendments in ASU 2023-07 are effective for fiscal years beginning after December 15, 2024. The adoption of ASU 2023-07 is not expected to have material effect on the Company’s operating results or financial condition.

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Securities

12 Months Ended

Dec. 31, 2023

Investments, Debt and Equity Securities [Abstract]

Securities

Note 2 — Securities

The following is a summary of securities available for sale as of December 31, 2023 and 2022:

			Gross		Gross			Estimated
	Amortized		Unrealized		Unrealized			Fair
	Cost		Gain		Loss			Value
	(in thousands)
December 31, 2023
U.S. Treasury securities	$	86,355	$	173	$	(1,040	)	$	85,488
U.S. government agency and sponsored agency obligations:
Mortgage-backed securities - residential		504,544		481		(62,697	)		442,328
Mortgage-backed securities - commercial		59,973		—		(11,982	)		47,991
Collateralized mortgage obligations		106,823		237		(9,649	)		97,411
Debt securities		132,215		—		(7,590	)		124,625
Total U.S. government agency and sponsored agency obligations		803,555		718		(91,918	)		712,355
Municipal bonds-tax exempt		77,121		—		(9,225	)		67,896
Total securities available for sale	$	967,031	$	891	$	(102,183	)	$	865,739
December 31, 2022
U.S. Treasury securities	$	49,690	$	—	$	(1,664	)	$	48,026
U.S. government agency and sponsored agency obligations:
Mortgage-backed securities - residential		540,590		63		(75,501	)		465,152
Mortgage-backed securities - commercial		61,799		—		(10,507	)		51,292
Collateralized mortgage obligations		98,236		—		(12,751	)		85,485
Debt securities		150,338		—		(11,839	)		138,499
Total U.S. government agency and sponsored agency obligations		850,963		63		(110,598	)		740,428
Municipal bonds-tax exempt		78,143		—		(12,759	)		65,384
Total securities available for sale	$	978,796	$	63	$	(125,021	)	$	853,838

The amortized cost and estimated fair value of securities as of December 31, 2023, by contractual or expected maturity, are shown below. Collateralized mortgage obligations are included in the table shown below based on their expected maturities. All other securities are included based on their contractual maturities. Mortgage-backed securities included in the table below may mature before their contractual maturities.

	Available for Sale
	Amortized		Estimated
	Cost		Fair Value
	(in thousands)
Within one year	$	62,521	$	61,828
Over one year through five years		169,176		160,983
Over five years through ten years		83,720		77,608
Over ten years		651,614		565,320
Total	$	967,031	$	865,739

The following table summarizes debt securities available for sale in an unrealized loss position for which an allowance for credit losses has not been recorded at December 31, 2023 and 2022, aggregated by major security type and length of time in a continuous unrealized loss position:

	Holding Period
	Less than 12 Months							12 Months or More							Total
	Gross Unrealized Loss			Estimated Fair Value		Number of Securities		Gross Unrealized Loss			Estimated Fair Value		Number of Securities		Gross Unrealized Loss			Estimated Fair Value		Number of Securities
	(in thousands, except number of securities)
December 31, 2023
U.S. Treasury securities	$	(57	)	$	21,024		7	$	(983	)	$	32,449		11	$	(1,040	)	$	53,473		18
U.S. government agency and sponsored agency obligations:
Mortgage-backed securities - residential		(11	)		2,324		5		(62,686	)		411,417		118		(62,697	)		413,741		123
Mortgage-backed securities - commercial		—			—		—		(11,982	)		47,991		15		(11,982	)		47,991		15
Collateralized mortgage obligations		(38	)		7,074		2		(9,611	)		63,610		24		(9,649	)		70,684		26
Debt securities		—			—		—		(7,590	)		124,625		26		(7,590	)		124,625		26
Total U.S. government agency and sponsored agency obligations		(49	)		9,398		7		(91,869	)		647,643		183		(91,918	)		657,041		190
Municipal bonds-tax exempt		—			—		—		(9,225	)		67,896		19		(9,225	)		67,896		19
Total	$	(106	)	$	30,422		14	$	(102,077	)	$	747,988		213	$	(102,183	)	$	778,410		227
December 31, 2022
U.S. Treasury securities	$	(414	)	$	33,812		14	$	(1,250	)	$	14,215		4	$	(1,664	)	$	48,027		18
U.S. government agency and sponsored agency obligations:
Mortgage-backed securities - residential		(1,712	)		36,009		18		(73,789	)		424,302		105		(75,501	)		460,311		123
Mortgage-backed securities - commercial		(84	)		4,069		1		(10,423	)		47,221		14		(10,507	)		51,290		15
Collateralized mortgage obligations		(1,011	)		23,606		8		(11,740	)		61,879		20		(12,751	)		85,485		28
Debt securities		(1,103	)		31,714		8		(10,736	)		106,785		22		(11,839	)		138,499		30
Total U.S. government agency and sponsored agency obligations		(3,910	)		95,398		35		(106,688	)		640,187		161		(110,598	)		735,585		196
Municipal bonds-tax exempt		—			—		—		(12,759	)		65,385		19		(12,759	)		65,385		19
Total	$	(4,324	)	$	129,210		49	$	(120,697	)	$	719,787		184	$	(125,021	)	$	848,997		233

The Company evaluates its available for sale securities portfolio for impairment on a quarterly basis. The Company did not recognize unrealized losses in income because it has the ability and the intent to hold and does not expect to be required to sell these securities until the recovery of their cost basis. The quarterly impairment assessment takes into account the changes in the credit quality of these debt securities since acquisition and the likelihood of a credit loss occurring over the life of the securities. In the event that a credit loss is expected to occur in the future, an allowance is established and a corresponding credit loss is recognized. Based on this analysis, the Company determined that no credit losses are expected to be realized on the tax-exempt municipal bond portfolio. The remainder of the securities portfolio consists of U.S. Treasury obligations, U.S. government agency securities, and U.S. government sponsored agency securities, all of which have the backing of the U.S. government, and are therefore not expected to incur credit losses.

Realized gains and losses on sales of securities and proceeds from sales of securities were as follows for the periods indicated:

	Year Ended December 31,
	2023			2022		2021
	(in thousands)
Gross realized gains on sales of securities	$	—		$	—	$	99
Gross realized losses on sales of securities		(1,871	)		—		(598	)
Net realized gains (losses) on sales of securities	$	(1,871	)	$	—	$	(499	)
Proceeds from sales of securities	$	8,149			—		55,884

For the year ended December 31, 2023, the Company recorded $1.9 million in net realized loss from sale of securities that had previously been recognized as net unrealized losses of $1.7 million in comprehensive income.

There were no sales of securities for the year ended December 31, 2022. For the year ended December 31, 2021, the Company recorded $0.5 million in net realized loss from the sale of securities that had previously been recognized as net unrealized losses of $0.1 million in comprehensive income.

Securities available for sale with market values of $24.8 million and $23.4 million as of December 31, 2023 and 2022, respectively, were pledged to secure advances from the Federal Reserve Bank (“FRB”) Discount Window and the Bank Term Funding Program (“BTFP”), and for other purposes as required or permitted by law.

At year-end 2023, there were no holdings of securities of any one issuer, other than the U.S. government and its agencies, in an amount greater than 10% of shareholders’ equity.

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Loans Receivable

12 Months Ended

Dec. 31, 2023

Receivables [Abstract]

Loans Receivable

Note 3 — Loans Receivable

The Board of Directors and management review and approve the Bank’s loan policy and procedures on a regular basis to reflect matters such as regulatory and organizational structure changes, strategic planning revisions, concentrations of credit, loan delinquencies and nonperforming loans, and problem loans.

Real estate loans are loans secured by liens or interest in real estate, to provide for the purchase, construction or refinance of real estate properties. Commercial and industrial loans consist of commercial term loans, commercial lines of credit and can include SBA loans. Alternatively, SBA loans can be real estate secured. Equipment financing agreements are typically secured by the business assets being financed. We maintain management loan review and monitoring departments that review and monitor pass graded loans as well as problem loans to prevent further deterioration.

Concentrations of Credit: The majority of the Bank’s loan portfolio consists of commercial real estate loans.

Loans receivable, net

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

	December 31,
	2023			2022
	(in thousands)
Real estate loans:
Commercial property
Retail	$	1,107,360		$	1,023,608
Hospitality		740,519			646,893
Office		574,981			499,946
Other (1)		1,366,534			1,553,729
Total commercial property loans		3,789,394			3,724,176
Construction		100,345			109,205
Residential (2)		962,661			734,472
Total real estate loans		4,852,400			4,567,853
Commercial and industrial loans (3)		747,819			804,492
Equipment financing agreements		582,215			594,788
Loans receivable		6,182,434			5,967,133
Allowance for credit losses		(69,462	)		(71,523	)
Loans receivable, net	$	6,112,972		$	5,895,610

(1)Includes, among other property types, mixed-use, gas station, apartment, industrial, faith-based facilities and warehouse; the remaining real estate categories represent less than 1% of the Bank's total loans receivable.

(2)Includes $1.9 million and $2.4 million of home equity loans and lines, and $4.5 million and $4.6 million of personal loans at December 31, 2023 and 2022, respectively.

(3)At December 31, 2023 and 2022, PPP loans were $0.2 million and $0.9 million, respectively.

Accrued interest on loans was $19.8 million and $16.0 million at December 31, 2023 and 2022, respectively.

At December 31, 2023 and 2022, loans with carrying values of $2.36 billion and $2.40 billion, respectively, were pledged to secure advances from the FHLB.

Loans Held for Sale

The following table details the information on SBA loans held for sale by portfolio segment for the years ended December 31, 2023 and 2022:

	Real Estate			Commercial and Industrial			Total
	(in thousands)
December 31, 2023
Balance at beginning of period	$	3,775		$	4,268		$	8,043
Originations and transfers		65,705			39,293			104,998
Sales		(60,611	)		(39,903	)		(100,514	)
Principal paydowns and amortization		(77	)		(437	)		(514	)
Balance at end of period	$	8,792		$	3,221		$	12,013
December 31, 2022
Balance at beginning of period	$	6,954		$	6,388		$	13,342
Originations and transfers		99,547			51,278			150,825
Sales		(102,720	)		(53,389	)		(156,109	)
Principal paydowns and amortization		(6	)		(9	)		(15	)
Balance at end of period	$	3,775		$	4,268		$	8,043

Loans held for sale were comprised of $12.0 million and $8.0 million of the guaranteed portion of SBA 7(a) loans at December 31, 2023 and 2022, respectively.

The following table presents loans purchased by portfolio segment for the years ended December 31, 2023 and 2022:

	Commercial Real Estate		Commercial and Industrial		Residential Real Estate		Total
	(in thousands)
2023	$	—	$	9,657	$	—	$	9,657
2022	$	11,030	$	180	$	18,715	$	29,925

Allowance for credit losses

The following table details the information on the allowance for credit losses by portfolio segment for the years ended December 31, 2023, 2022 and 2021:

	Real Estate			Commercial and Industrial			Equipment Financing Agreements			Total
	(in thousands)
December 31, 2023
Allowance for credit losses:
Beginning balance	$	44,026		$	15,267		$	12,230		$	71,523
Charge-offs		(627	)		(6,657	)		(8,806	)		(16,090	)
Recoveries		312			7,089			1,646			9,047
Provision (recovery) for credit losses		1,788			(5,442	)		8,636			4,982
Ending balance	$	45,499		$	10,257		$	13,706		$	69,462
December 31, 2022
Allowance for credit losses:
Beginning balance	$	48,890		$	12,418		$	11,249		$	72,557
Charge-offs		(1,886	)		(524	)		(2,312	)		(4,722	)
Recoveries		848			1,178			1,322			3,348
Provision (recovery) for credit losses		(3,826	)		2,195			1,971			340
Ending balance	$	44,026		$	15,267		$	12,230		$	71,523
December 31, 2021
Allowance for credit losses:
Beginning balance	$	51,876		$	21,410		$	17,140		$	90,426
Charge-offs		(1,427	)		(546	)		(4,400	)		(6,373	)
Recoveries		10,807			897			946			12,650
Provision (recovery) for credit losses		(12,366	)		(9,343	)		(2,437	)		(24,146	)
Ending balance	$	48,890		$	12,418		$	11,249		$	72,557

The table below presents the allowance for credit losses by portfolio segment as a percentage of the total allowance for credit losses and loans by portfolio segment as a percentage of the aggregate investment of loans receivable for the years ended December 31, 2023 and 2022:

	December 31, 2023										December 31, 2022
	Allowance Amount		Percentage of Total Allowance			Total Loans		Percentage of Total Loans			Allowance Amount		Percentage of Total Allowance			Total Loans		Percentage of Total Loans
	(dollars in thousands)
Real estate loans:
Commercial property
Retail	$	10,264		14.8	%	$	1,107,360		17.9	%	$	7,872		11.0	%	$	1,023,608		17.2	%
Hospitality		15,534		22.4			740,519		12.0			13,407		18.7			646,893		10.8
Office		3,024		4.4			574,981		9.3			2,293		3.2			499,946		8.4
Other		8,663		12.4			1,366,534		22.1			13,056		18.3			1,553,729		26.0
Total commercial property loans		37,485		54.0			3,789,394		61.3			36,628		51.2			3,724,176		62.4
Construction		2,756		4.0			100,345		1.6			4,022		5.7			109,205		1.8
Residential		5,258		7.5			962,661		15.6			3,376		4.7			734,472		12.4
Total real estate loans		45,499		65.5			4,852,400		78.5			44,026		61.6			4,567,853		76.6
Commercial and industrial loans		10,257		14.8			747,819		12.1			15,267		21.3			804,492		13.4
Equipment financing agreements		13,706		19.7			582,215		9.4			12,230		17.1			594,788		10.0
Total	$	69,462		100.0	%	$	6,182,434		100.0	%	$	71,523		100.0	%	$	5,967,133		100.0	%

The following table represents the amortized cost basis of collateral dependent loans by class of loans as of December 31, 2023 and 2022, for which repayment is expected to be obtained through the sale of the underlying collateral and any collateral dependent loans that are still accruing but are considered nonperforming.

	December 31,
	2023		2022
	(in thousands)
Real estate loans:
Commercial property
Retail	$	1,530	$	1,930
Hospitality		338		—
Other (1)		305		256
Total commercial property loans		2,173		2,186
Residential		1		508
Total real estate loans		2,174		2,694
Commercial and industrial loans		5,178		—
Total	$	7,352	$	2,694

(1)Includes, among other property types, mixed-use, gas station, apartment, industrial, faith-based facilities and warehouse; the remaining real estate categories represent less than one percent of the Bank's total loans receivable.

Loan Quality Indicators

As part of the on-going monitoring of the quality of our loan portfolio, we utilize an internal loan grading system to identify credit risk and assign an appropriate grade (from 1 to 8) for each loan in our portfolio. Third-party loan reviews are conducted annually on a sample basis. Additional adjustments are made when determined to be necessary. The loan grade definitions are as follows:

Pass and Pass-Watch: Pass and Pass-Watch loans, grades (1-4), are in compliance with the Bank’s credit policy and regulatory requirements, and do not exhibit any potential or defined weaknesses as defined under “Special Mention,” “Substandard” or “Doubtful.” This category is the strongest level of the Bank’s loan grading system. It consists of all performing loans with no identified credit weaknesses. It includes cash and stock/security secured loans or other investment grade loans.

Special Mention: A Special Mention loan, grade (5), has potential weaknesses that deserve management’s close attention. If not corrected, these potential weaknesses may result in deterioration of the repayment of the debt and result in a Substandard classification. Loans that have significant actual, not potential, weaknesses are considered more severely classified.

Substandard: A Substandard loan, grade (6), has a well-defined weakness that jeopardizes the liquidation of the debt. A loan graded Substandard is not protected by the sound worth and paying capacity of the borrower, or of the value and type of collateral pledged. With a Substandard loan, there is a distinct possibility that the Bank will sustain some loss if the weaknesses or deficiencies are not corrected.

Doubtful: A Doubtful loan, grade (7), is one that has critical weaknesses that would make the collection or liquidation of the full amount due improbable. However, there may be pending events which may work to strengthen the loan, and therefore the amount or timing of a possible loss cannot be determined at the current time.

Loss: A loan classified as Loss, grade (8), is considered uncollectible and of such little value that their continuance as active bank assets is not warranted. This classification does not mean that the loan has absolutely no recovery or salvage value, but rather it is not practical or desirable to defer writing off this asset even though partial recovery may be possible in the future. Loans classified as Loss will be charged off in a timely manner.

Under regulatory guidance, loans graded special mention or worse are considered criticized loans, and loans graded substandard or worse are considered classified loans.

Loans by Vintage Year and Risk Rating

	Term Loans
	Amortized Cost Basis by Origination Year (1)
	2023		2022		2021			2020		2019		Prior			Revolving Loans Amortized Cost Basis			Total
	(in thousands)
December 31, 2023
Real estate loans:
Commercial property
Risk Rating
Pass / Pass Watch	$	683,819	$	986,822	$	858,821		$	572,950	$	378,067	$	238,400		$	30,236		$	3,749,115
Special Mention		4,400		3,997		3,271			5,670		711		2,310			1,406			21,765
Classified		3,065		1,080		4,899			—		5,578		3,892			—			18,514
Total commercial property		691,284		991,899		866,991			578,620		384,356		244,602			31,642			3,789,394
YTD gross charge-offs		—		—		—			411		—		216			—			627
YTD net charge-offs (recoveries)		—		—		—			403		—		(81	)		—			322
Construction
Risk Rating
Pass / Pass Watch		72,039		—		—			—		—		—			—			72,039
Special Mention		—		—		28,306			—		—		—			—			28,306
Classified		—		—		—			—		—		—			—			—
Total construction		72,039		—		28,306			—		—		—			—			100,345
YTD gross charge-offs		—		—		—			—		—		—			—			—
YTD net charge-offs (recoveries)		—		—		—			—		—		—			—			—
Residential
Risk Rating
Pass / Pass Watch		290,196		375,712		158,618			12,656		217		119,736			5,025			962,160
Special Mention		—		—		—			—		—		—			500			500
Classified		—		—		—			—		—		1			—			1
Total residential		290,196		375,712		158,618			12,656		217		119,737			5,525			962,661
YTD gross charge-offs		—		—		—			—		—		—			—			—
YTD net charge-offs (recoveries)		—		—		—			—		—		(7	)		—			(7	)
Total real estate loans
Risk Rating
Pass / Pass Watch		1,046,054		1,362,534		1,017,439			585,606		378,284		358,136			35,261			4,783,314
Special Mention		4,400		3,997		31,577			5,670		711		2,310			1,906			50,571
Classified		3,065		1,080		4,899			—		5,578		3,893			—			18,515
Total real estate loans		1,053,519		1,367,611		1,053,915			591,276		384,573		364,339			37,167			4,852,400
YTD gross charge-offs		—		—		—			411		—		216			—			627
YTD net charge-offs (recoveries)		—		—		—			403		—		(88	)		—			315
Commercial and industrial loans:
Risk Rating
Pass / Pass Watch		177,864		169,209		84,198			31,348		9,971		12,920			242,044			727,554
Special Mention		—		14,578		—			102		—		65			(1	)		14,744
Classified		329		—		—			—		79		174			4,939			5,521
Total commercial and industrial loans		178,193		183,787		84,198			31,450		10,050		13,159			246,982			747,819
YTD gross charge-offs		—		17		—			—		110		410			6,120			6,657
YTD net charge-offs (recoveries)		—		5		(7	)		—		101		(6,621	)		6,090			(432	)
Equipment financing agreements:
Risk Rating
Pass / Pass Watch		215,670		211,228		101,622			24,340		18,832		3,192			—			574,884
Special Mention		—		—		—			—		—		—			—			—
Classified		392		4,171		1,945			365		401		57			—			7,331
Total equipment financing agreements		216,062		215,399		103,567			24,705		19,233		3,249			—			582,215
YTD gross charge-offs		178		3,944		3,267			386		799		232			—			8,806
YTD net charge-offs (recoveries)		178		3,744		2,858			244		250		(114	)		—			7,160
Total loans receivable:
Risk Rating
Pass / Pass Watch		1,439,588		1,742,971		1,203,259			641,294		407,087		374,248			277,305			6,085,752
Special Mention		4,400		18,575		31,577			5,772		711		2,375			1,905			65,315
Classified		3,786		5,251		6,844			365		6,058		4,124			4,939			31,367
Total loans receivable	$	1,447,774	$	1,766,797	$	1,241,680		$	647,431	$	413,856	$	380,747		$	284,149		$	6,182,434
YTD gross charge-offs		178		3,961		3,267			797		909		858			6,120			16,090
YTD net charge-offs (recoveries)		178		3,749		2,851			647		351		(6,823	)		6,090			7,043

(1)Includes extensions, renewals, or modifications of credit contracts, which consist of a new credit decision

	Term Loans
	Amortized Cost Basis by Origination Year (1)
	2022		2021		2020		2019		2018		Prior		Revolving Loans Amortized Cost Basis		Total
	(in thousands)
December 31, 2022
Real estate loans:
Commercial property
Risk Rating
Pass / Pass Watch	$	1,184,361	$	901,029	$	600,740	$	404,786	$	301,950	$	207,861	$	50,877	$	3,651,604
Special Mention		847		13,384		5,857		7,115		—		6,080		1,701		34,984
Classified		—		—		412		4,312		12,304		20,560		—		37,588
Total commercial property		1,185,208		914,413		607,009		416,213		314,254		234,501		52,578		3,724,176
Construction
Risk Rating
Pass / Pass Watch		41,662		67,543		—		—		—		—		—		109,205
Special Mention		—		—		—		—		—		—		—		—
Classified		—		—		—		—		—		—		—		—
Total construction		41,662		67,543		—		—		—		—		—		109,205
Residential
Risk Rating
Pass / Pass Watch		405,975		173,236		13,102		232		731		134,766		5,422		733,464
Special Mention		—		—		—		—		—		—		500		500
Classified		12		—		—		—		—		496		—		508
Total residential		405,987		173,236		13,102		232		731		135,262		5,922		734,472
Total real estate loans
Risk Rating
Pass / Pass Watch		1,631,998		1,141,808		613,842		405,018		302,681		342,627		56,299		4,494,273
Special Mention		847		13,384		5,857		7,115		—		6,080		2,201		35,484
Classified		12		—		412		4,312		12,304		21,056		—		38,096
Total real estate loans		1,632,857		1,155,192		620,111		416,445		314,985		369,763		58,500		4,567,853
Commercial and industrial loans:
Risk Rating
Pass / Pass Watch		368,778		100,537		39,577		24,117		7,342		12,282		205,951		758,584
Special Mention		—		9,285		—		—		29		102		34,113		43,529
Classified		—		—		171		1,097		81		391		639		2,379
Total commercial and industrial loans		368,778		109,822		39,748		25,214		7,452		12,775		240,703		804,492
Equipment financing agreements:
Risk Rating
Pass / Pass Watch		305,249		165,313		46,970		52,133		17,608		1,798		—		589,071
Special Mention		—		—		—		—		—		—		—		—
Classified		630		2,542		311		1,581		565		88		—		5,717
Total equipment financing agreements		305,879		167,855		47,281		53,714		18,173		1,886		—		594,788
Total loans receivable:
Risk Rating
Pass / Pass Watch		2,306,025		1,407,658		700,389		481,268		327,631		356,707		262,250		5,841,928
Special Mention		847		22,669		5,857		7,115		29		6,182		36,314		79,013
Classified		642		2,542		894		6,990		12,950		21,535		639		46,192
Total loans receivable	$	2,307,514	$	1,432,869	$	707,140	$	495,373	$	340,610	$	384,424	$	299,203	$	5,967,133

(1)Includes extensions, renewals, or modifications of credit contracts, which consist of a new credit decision

Loans by Vintage Year and Payment Performance

	Term Loans
	Amortized Cost Basis by Origination Year (1)
	2023		2022		2021			2020		2019		Prior			Revolving Loans Amortized Cost Basis		Total
	(in thousands)
December 31, 2023
Real estate loans:
Commercial property
Payment performance
Performing	$	689,449	$	991,899	$	866,841		$	578,620	$	384,275	$	243,819		$	31,642	$	3,786,545
Nonperforming		1,835		—		150			—		81		783			—		2,849
Total commercial property		691,284		991,899		866,991			578,620		384,356		244,602			31,642		3,789,394
YTD gross charge-offs		—		—		—			411		—		216			—		627
YTD net charge-offs (recoveries)		—		—		—			403		—		(81	)		—		322
Construction
Payment performance
Performing		72,039		—		28,306			—		—		—			—		100,345
Nonperforming		—		—		—			—		—		—			—		—
Total construction		72,039		—		28,306			—		—		—			—		100,345
YTD gross charge-offs		—		—		—			—		—		—			—		—
YTD net charge-offs (recoveries)		—		—		—			—		—		—			—		—
Residential
Payment performance
Performing		290,196		375,712		158,618			12,656		217		119,736			5,525		962,660
Nonperforming		—		—		—			—		—		1			—		1
Total residential		290,196		375,712		158,618			12,656		217		119,737			5,525		962,661
YTD gross charge-offs		—		—		—			—		—		—			—		—
YTD net charge-offs (recoveries)		—		—		—			—		—		(7	)		—		(7	)
Total real estate loans
Payment performance
Performing		1,051,684		1,367,611		1,053,765			591,276		384,492		363,555			37,167		4,849,550
Nonperforming		1,835		—		150			—		81		784			—		2,850
Total real estate loans		1,053,519		1,367,611		1,053,915			591,276		384,573		364,339			37,167		4,852,400
YTD gross charge-offs		—		—		—			411		—		216			—		627
YTD net charge-offs (recoveries)		—		—		—			403		—		(88	)		—		315
Commercial and industrial loans:
Payment performance
Performing		177,864		183,787		84,198			31,415		10,050		13,066			242,134		742,514
Nonperforming		329		—		—			35		—		93			4,848		5,305
Total commercial and industrial loans		178,193		183,787		84,198			31,450		10,050		13,159			246,982		747,819
YTD gross charge-offs		—		17		—			—		110		410			6,120		6,657
YTD net charge-offs (recoveries)		—		5		(7	)		—		101		(6,621	)		6,090		(432	)
Equipment financing agreements:
Payment performance
Performing		215,670		211,228		101,622			24,340		18,844		3,192			—		574,896
Nonperforming		392		4,171		1,945			365		389		57			—		7,319
Total equipment financing agreements		216,062		215,399		103,567			24,705		19,233		3,249			—		582,215
YTD gross charge-offs		178		3,944		3,267			386		799		232			—		8,806
YTD net charge-offs (recoveries)		178		3,744		2,858			244		250		(114	)		—		7,160
Total loans receivable:
Payment performance
Performing		1,445,218		1,762,626		1,239,585			647,031		413,386		379,813			279,301		6,166,960
Nonperforming		2,556		4,171		2,095			400		470		934			4,848		15,474
Total loans receivable	$	1,447,774	$	1,766,797	$	1,241,680		$	647,431	$	413,856	$	380,747		$	284,149	$	6,182,434
YTD gross charge-offs		178		3,961		3,267			797		909		858			6,120		16,090
YTD net charge-offs (recoveries)		178		3,749		2,851			647		351		(6,823	)		6,090		7,043

(1)Includes extensions, renewals, or modifications of credit contracts, which consist of a new credit decision

	Term Loans
	Amortized Cost Basis by Origination Year (1)
	2022		2021		2020		2019		2018		Prior		Revolving Loans Amortized Cost Basis		Total
	(in thousands)
December 31, 2022
Real estate loans:
Commercial property
Payment performance
Performing	$	1,185,208	$	914,413	$	606,597	$	416,213	$	312,324	$	233,643	$	52,578	$	3,720,976
Nonperforming		—		—		412		—		1,930		858				3,200
Total commercial property		1,185,208		914,413		607,009		416,213		314,254		234,501		52,578		3,724,176
Construction
Payment performance
Performing		41,662		67,543		—		—		—		—		—		109,205
Nonperforming		—		—		—		—		—		—		—		—
Total construction		41,662		67,543		—		—		—		—		—		109,205
Residential
Payment performance
Performing		405,975		173,236		13,102		232		731		134,766		5,922		733,964
Nonperforming		12		—		—		—		—		496		—		508
Total residential		405,987		173,236		13,102		232		731		135,262		5,922		734,472
Total real estate loans
Payment performance
Performing		1,632,845		1,155,192		619,699		416,445		313,055		368,409		58,500		4,564,145
Nonperforming		12		—		412		—		1,930		1,354		—		3,708
Total real estate loans		1,632,857		1,155,192		620,111		416,445		314,985		369,763		58,500		4,567,853
Commercial and industrial loans:
Payment performance
Performing		368,778		109,822		39,577		25,199		7,452		12,539		240,703		804,070
Nonperforming		—		—		171		15		—		236		—		422
Total commercial and industrial loans		368,778		109,822		39,748		25,214		7,452		12,775		240,703		804,492
Equipment financing agreements:
Payment performance
Performing		305,249		165,313		46,970		52,133		17,608		1,798		—		589,071
Nonperforming		630		2,542		311		1,581		565		88		—		5,717
Total equipment financing agreements		305,879		167,855		47,281		53,714		18,173		1,886		—		594,788
Total loans receivable:
Payment performance
Performing		2,306,872		1,430,327		706,246		493,777		338,115		382,746		299,203		5,957,286
Nonperforming		642		2,542		894		1,596		2,495		1,678		—		9,847
Total loans receivable	$	2,307,514	$	1,432,869	$	707,140	$	495,373	$	340,610	$	384,424	$	299,203	$	5,967,133

(1)Includes extensions, renewals, or modifications of credit contracts, which consist of a new credit decision

Nonaccrual Loans and Nonperforming Assets

The following tables represent the amortized cost basis of loans on nonaccrual status and loans past due 90 days and still accruing as of December 31, 2023 and 2022.

	December 31, 2023
	Nonaccrual Loans With No Allowance for Credit Losses		Nonaccrual Loans With Allowance for Credit Losses		Loans Past Due 90 Days Still Accruing		Total Nonperforming Loans
	(in thousands)
Real estate loans:
Commercial property
Retail	$	1,717	$	321	$	—	$	2,038
Hospitality		338		150		—		488
Office		—		—		—		—
Other		305		18		—		323
Total commercial property loans		2,360		489		—		2,849
Residential		1		—		—		1
Total real estate loans		2,361		489		—		2,850
Commercial and industrial loans		5,213		92		—		5,305
Equipment financing agreements		570		6,749		—		7,319
Total	$	8,144	$	7,330	$	—	$	15,474
	December 31, 2022
	Nonaccrual Loans With No Allowance for Credit Losses		Nonaccrual Loans With Allowance for Credit Losses		Loans Past Due 90 Days Still Accruing		Total Nonperforming Loans
	(in thousands)
Real estate loans:
Commercial property
Retail	$	1,929	$	—	$	—	$	1,929
Other		540		731		—		1,271
Total commercial property loans		2,469		731		—		3,200
Residential		508		—		—		508
Total real estate loans		2,977		731		—		3,708
Commercial and industrial loans		—		422		—		422
Equipment financing agreements		215		5,501		—		5,716
Total	$	3,192	$	6,654	$	—	$	9,846

The Company recognized $0.2 million, $46,000 and $0.7 million of interest income on nonaccrual loans for the twelve months ended December 31, 2023, 2022 and 2021, respectively.

The following is an aging analysis of loans, disaggregated by loan class, as of the dates indicated:

	30-59 Days Past Due		60-89 Days Past Due		90 Days or More Past Due		Total Past Due		Current		Total
	(in thousands)
December 31, 2023
Real estate loans:
Commercial property
Retail	$	632	$	—	$	—	$	632	$	1,106,728	$	1,107,360
Hospitality		—		150		22		172		740,347		740,519
Office		—		—		—		—		574,981		574,981
Other		592		—		—		592		1,365,942		1,366,534
Total commercial property loans		1,224		150		22		1,396		3,787,998		3,789,394
Construction		—		—		—		—		100,345		100,345
Residential		521		336		1		858		961,803		962,661
Total real estate loans		1,745		486		23		2,254		4,850,146		4,852,400
Commercial and industrial loans		76		120		5,178		5,374		742,445		747,819
Equipment financing agreements		7,138		2,134		4,551		13,823		568,392		582,215
Total loans receivable	$	8,959	$	2,740	$	9,752	$	21,451	$	6,160,983	$	6,182,434
December 31, 2022
Real estate loans:
Commercial property
Retail	$	—	$	—	$	—	$	—	$	1,023,608	$	1,023,608
Hospitality		—		—		—		—		646,893		646,893
Office		—		—		—		—		499,946		499,946
Other		—		494		—		494		1,553,235		1,553,729
Total commercial property loans		—		494		—		494		3,723,682		3,724,176
Construction		—		—		—		—		109,205		109,205
Residential		313		804		7		1,124		733,348		734,472
Total real estate loans		313		1,298		7		1,618		4,566,235		4,567,853
Commercial and industrial loans		77		79		—		156		804,336		804,492
Equipment financing agreements		5,825		1,271		2,949		10,045		584,743		594,788
Total loans receivable	$	6,215	$	2,648	$	2,956	$	11,819	$	5,955,314	$	5,967,133

The following table details nonperforming assets as of the dates indicated:

	As of December 31,
	2023		2022
	(in thousands)
Nonaccrual loans	$	15,474	$	9,846
Loans receivable 90 days or more past due and still accruing		—		—
Total nonperforming loans receivable		15,474		9,846
Other real estate owned ("OREO")		117		117
Total nonperforming assets	$	15,591	$	9,963

OREO consisted of one property with a carrying value of $0.1 million as of December 31, 2023 and 2022. OREO is included in prepaid expenses and other assets in the accompanying Consolidated Balance Sheets as of December 31, 2023 and 2022.

Loan Modifications

No loans were modified to borrowers experiencing financial difficulty during the twelve months ended December 31, 2023, 2022 or 2021.

XML

Servicing Assets

12 Months Ended

Dec. 31, 2023

Transfers and Servicing [Abstract]

Servicing Assets

Note 4 — Servicing Assets

The changes in servicing assets for the years ended December 31, 2023 and 2022 were as follows:

	As of December 31,
	2023			2022
	(in thousands)
Balance at beginning of period	$	7,176		$	7,080
Additions related to sale of SBA loans		1,965			3,153
Amortization		(2,456	)		(2,672	)
Change in valuation allowance		385			(385	)
Balance at end of period	$	7,070		$	7,176

At December 31, 2023 and 2022, we serviced loans sold to unaffiliated parties in the amount of $539.6 million and $523.6 million, respectively. These loans are maintained off-balance sheet and are not included in the loans receivable balance. All of the loans being serviced were SBA loans.

The Company recorded servicing fee income of $5.2 million, $4.9 million and $4.6 million for the years ended December 31, 2023, 2022 and 2021, respectively. Servicing fee income, net of amortization of servicing assets and liabilities, is included in other operating income in the consolidated statements of income.

The fair value of servicing rights was $7.7 million at December 31, 2023. Fair value at December 31, 2023 was determined using discount rates ranging from 14.4% to 24.7% and prepayment speeds ranging from 12.2% to 19.7%, depending on the stratification of the specific servicing right. The fair value of servicing rights was $7.1 million at December 31, 2022. Fair value at December 31, 2022 was determined using discount rates ranging from 21.9% to 25.3% and prepayment speeds ranging from 10.8% to 16.7%, depending on the stratification of the specific servicing right.

XML

Premises and Equipment

12 Months Ended

Dec. 31, 2023

Property, Plant and Equipment [Abstract]

Premises and Equipment

Note 5 — Premises and Equipment

The following is a summary of the major components of premises and equipment:

	As of December 31,
	2023			2022
	(in thousands)
Land	$	5,319		$	6,850
Building and improvements		9,420			12,643
Furniture and equipment		31,014			30,341
Leasehold improvements		20,130			18,246
Fixed assets in process		1,059			32
		66,942			68,112
Accumulated depreciation and amortization		(44,983	)		(45,262	)
Total premises and equipment, net	$	21,959		$	22,850

Depreciation and amortization expense related to premises and equipment was $3.3 million, $3.9 million and $4.4 million for the years ended December 31, 2023, 2022 and 2021, respectively.

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Leases

12 Months Ended

Dec. 31, 2023

Leases [Abstract]

Leases

Note 6 — Leases

The Company enters into leases in the normal course of business primarily for financial centers, back-office operations locations, business development offices, information technology data centers and information technology equipment. At December 31, 2023, the Company’s leases have remaining terms ranging from four months to ten years and one month, some of which include renewal or termination options to extend the lease for up to five years.

The Company includes lease extension and termination options in the lease term if, after considering relevant economic factors, it is reasonably certain the Company will exercise the option. In addition, the Company has elected to account for any non-lease components in its real estate leases as part of the associated lease component. The Company has also elected not to recognize leases with original lease terms of 12 months or less (short-term leases) on the Company’s balance sheet.

Leases are classified as operating or finance leases at the lease commencement date. Lease expense for operating leases and short-term leases is recognized on a straight-line basis over the term of the lease. Right-of-use assets represent our right to

use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Right-of-use assets and lease liabilities are recognized at the lease commencement date based on the estimated present value of the lease payments over the lease term.

In determining whether a contract contained a lease, we determined whether an arrangement was or included a lease at contract inception. Operating lease right-of-use asset and liability were recognized at commencement date and initially measured based on the present value of lease payments over the defined lease term. The right-of-use asset and lease liability were $42.4 million and $46.4 million, respectively, as of December 31, 2023. The outstanding balances of the right-of-use asset and lease liability were $40.4 million and $44.2 million, respectively, as of December 31, 2022.

In determining the discount rates, since most of our leases do not provide an implicit rate, we used our incremental borrowing rate provided by the FHLB of San Francisco based on the information available at commencement date to calculate the present value of lease payments.

The Company's right-of-use asset is included in prepaid expenses and other assets and our lease liability is included in accrued expenses and other liabilities in the accompanying consolidated balance sheet.

We lease our premises under non-cancelable operating leases. At December 31, 2023, future minimum annual rental commitments under these non-cancelable operating leases, with initial or remaining terms of one year or more, were as follows:

	Amount
	(in thousands)
2024	$	8,861
2025		8,052
2026		6,898
2027		6,576
2028		6,145
Thereafter		14,927
Remaining lease commitments		51,459
Interest		(5,057	)
Present value of lease liability	$	46,402

For the years ended December 31, 2023, 2022 and 2021, net rental expenses recorded under such leases amounted to $8.8 million, $8.3 million, and $8.5 million, respectively. This included operating lease costs of $8.7 million, $7.9 million and $8.1 million for the twelve months ended December 31, 2023, 2022 and 2021, respectively.

Weighted average remaining lease terms for the Company’s operating leases were 6.82 years and 7.12 years as of December 31, 2023 and 2022, respectively. Weighted average discount rates used for the Company’s operating leases were 2.98% and 2.42% as of December 31, 2023 and 2022, respectively.

Cash paid, and included in cash flows from operating activities, for amounts included in the measurement of the lease liability for the Company's operating leases for the twelve months ended December 31, 2023, 2022 and 2021 was $8.7 million, $8.0 million and $8.0 million, respectively.

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Goodwill and Other Intangibles

12 Months Ended

Dec. 31, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Other Intangibles

Note 7 — Goodwill and other intangibles

The third-party originators intangible of $483,000 and goodwill of $11.0 million were recorded as a result of the acquisition of an equipment financing agreements portfolio in 2016. The core deposit intangible of $2.2 million was recognized for the deposits acquired in a 2014 acquisition. The Company's intangible assets were as follows for the periods indicated:

		December 31, 2023							December 31, 2022
	Amortization Period	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
		(in thousands)
Core deposit intangible	10 years	$	2,213	$	(2,145	)	$	68	$	2,213	$	(2,031	)	$	182
Third-party originators intangible	7 years		483		(483	)		—		483		(471	)		12
Goodwill	N/A		11,031		—			11,031		11,031		—			11,031
Total intangible assets		$	13,727	$	(2,628	)	$	11,099	$	13,727	$	(2,502	)	$	11,225

The Company performed an impairment analysis in the fourth quarter of 2023 and determined no impairment existed as of December 31, 2023. No triggering event occurred as of, or subsequent to December 31, 2023, that would require a reassessment of goodwill and other intangible assets. There were no impairment charges related to intangible assets recorded in earnings in the three years ended December 31, 2023.

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Deposits

12 Months Ended

Dec. 31, 2023

Deposits [Abstract]

Deposits

Note 8 — Deposits

Time deposits more than $250,000 at year-end 2023 and 2022 were $1.00 billion and $697.0 million, respectively.

At December 31, 2023, the scheduled maturities of time deposits were as follows:

Year Ending December 31,	Time Deposits More Than $250,000		Other Time Deposits		Total
	(in thousands)
2024	$	995,830	$	1,444,509	$	2,440,339
2025		3,928		6,205		10,133
2026		263		3,142		3,405
2027		—		572		572
2028 & thereafter		—		418		418
Total	$	1,000,021	$	1,454,846	$	2,454,867

A summary of interest expense on deposits was as follows for the periods indicated:

	Year Ended December 31,
	2023		2022		2021
	(in thousands)
Demand: interest-bearing	$	117	$	100	$	61
Money market and savings		44,066		12,753		5,199
Time deposits more than $250,000		42,762		4,457		726
Other time deposits		47,763		8,628		5,669
Total interest expense on deposits	$	134,708	$	25,938	$	11,655

Accrued interest payable on deposits was $39.2 million and $7.8 million at December 31, 2023 and 2022, respectively. Total deposits reclassified to loans due to overdrafts at December 31, 2023 and 2022 were $1.6 million and $1.2 million, respectively.

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Borrowings

12 Months Ended

Dec. 31, 2023

Debt Disclosure [Abstract]

Borrowings

Note 9 — Borrowings

Borrowings consisted of FHLB advances, which represent collateralized obligations with the FHLB. The following is a summary of contractual maturities of FHLB advances:

	As of December 31,
	2023					2022
	Outstanding Balance		Weighted Average Rate			Outstanding Balance		Weighted Average Rate
	(dollars in thousands)
Open advances	$	212,500		5.70	%	$	250,000		4.65	%
Advances due within 12 months		37,500		0.40			50,000		0.97
Advances due over 12 months through 24 months		12,500		1.90			37,500		0.40
Advances due over 24 months through 36 months		62,500		4.37			12,500		1.90
Outstanding advances	$	325,000		4.69	%	$	350,000		3.57	%

The following is financial data pertaining to FHLB advances:

	As of December 31,
	2023			2022			2021
	(dollars in thousands)
Weighted-average interest rate at end of year		4.69	%		3.57	%		1.05	%
Weighted-average interest rate during the year		3.48	%		1.52	%		1.17	%
Average balance of FHLB advances	$	197,390		$	148,027		$	145,277
Maximum amount outstanding at any month-end	$	450,000		$	350,000		$	162,500

We have pledged loans receivable with carrying values of $2.36 billion at December 31, 2023, as collateral with the FHLB for this borrowing facility. The total borrowing capacity available from the pledged collateral is $1.54 billion, of which $1.09 billion remained available at December 31, 2023. At December 31, 2023, the available borrowing capacity through the Federal Reserve Bank of San Francisco Discount Window and the BTFP was $23.2 million on pledged securities with market values of $24.8 million, none of which was outstanding. At December 31, 2022, the available borrowing capacity through the Federal Reserve Bank of San Francisco Discount Window was $22.0 million on pledged securities with market values of $23.4 million, none of which was outstanding.

At December 31, 2023, advances from the FHLB with a weighted average interest rate of 4.69% were $325.0 million, a decrease of $25.0 million from $350.0 million with a weighted average interest rate of 3.57% at December 31, 2022. FHLB open advances were $212.5 million with a weighted average interest rate of 5.70% while the remainder of term advances were $112.5 million with a weighted average interest rate of 2.77% at December 31, 2023. At December 31, 2022, the Bank had $250.0 million of open advances and $100.0 million of term advances at the FHLB with a weighted average rate of 4.65% and 0.87%, respectively. For the years ended December 31, 2023, 2022 and 2021, interest expense on FHLB advances were $6.9 million, $2.2 million and $1.7 million, respectively, and the weighted-average interest rates were 3.48%, 1.52% and 1.17%, respectively.

Note 10 — Subordinated Debentures

On August 20, 2021, the Company issued Fixed-to-Floating Subordinated Notes (“2031 Notes”) of $110.0 million with a final maturity date of September 1, 2031. The 2031 Notes have an initial fixed interest rate of 3.75% per annum, payable semi-annually in arrears on March 1 and September 1 of each year, up to but excluding September 1, 2026. From and including September 1, 2026 and thereafter, the 2031 Notes will bear interest at a floating rate per annum equal to the Benchmark rate (which is expected to be the Three-Month Term SOFR) plus 310 basis points, payable quarterly in arrears on March 1, June 1, September 1 and December 1 of each year. If the then current three-month term SOFR rate is less than zero, the three-month SOFR will be deemed to be zero. Debt issuance cost was $2.1 million, which is being amortized through the 2031 Notes maturity date. At December 31, 2023 and 2022, the balance of the 2031 Notes included in the Company’s Consolidated Balance Sheet, net of debt issuance cost, was $108.3 million and $108.2 million, respectively. The amortization of debt issuance cost was $183,000, $176,000 and $62,000 for the years ended December 31, 2023, 2022 and 2021, respectively.

The Company issued Fixed-to-Floating Subordinated Notes (“2027 Notes”) of $100.0 million on March 21, 2017, with a final maturity on March 30, 2027. The Notes have an initial fixed interest rate of 5.45% per annum, payable semi-annually on March 30 and September 30 of each year. From and including March 30, 2022 and thereafter, the 2027 Notes bear interest

at a floating rate equal to the then current three-month LIBOR, as calculated on each applicable date of determination, plus 3.315% payable quarterly. If the then current three-month LIBOR is less than zero, three-month LIBOR will be deemed to be zero. Debt issuance cost was $2.3 million, which is being amortized through the Note’s maturity date.

During the year ended December 31, 2022, the Company redeemed its 2027 Notes. A portion of the redemption was funded with the proceeds from the Company’s 2021 subordinated debt offering. The redemption price for each of the 2027 Notes equaled 100% of the outstanding principal amount redeemed, plus any accrued and unpaid interest thereon. All interest accrued on the 2027 Notes ceased to accrue on and after March 30, 2022. Upon the redemption, the Company recognized a pre-tax charge of $1.1 million for the remaining unamortized debt issuance costs associated with the 2027 Notes. The amortization of debt issuance cost was $1.1 million and $0.3 million for the years ended December 31, 2022 and 2021, respectively.

At December 31, 2023 and 2022, the balance of Fixed-to-Floating Subordinated Notes included in the Company’s Consolidated Balance Sheet, net of debt issuance cost, was $108.3 million and $108.2 million, respectively.

The Company assumed Junior Subordinated Deferrable Interest Debentures (“Subordinated Debentures”) as a result of an acquisition in 2014 with an unpaid principal balance of $26.8 million and an estimated fair value of $18.5 million. The $8.3 million discount is being amortized to interest expense through the debentures’ maturity date of March 15, 2036. A trust was formed in 2005 which issued $26.0 million of Trust Preferred Securities (“TPS”) at a 6.26% fixed rate for the first five years and a variable rate at the three-month LIBOR plus 140 basis points thereafter and invested the proceeds in the Subordinated Debentures. The rate on the TPS at December 31, 2023 was 7.05%. Beginning September 15, 2023, the variable rate on the TPS changed to the three-month SOFR plus approximately 166 basis points, representing a credit spread of 140 basis points and an approximate 26 basis point adjustment to convert three-month LIBOR to three-month SOFR. The Company may redeem the Subordinated Debentures at an earlier date if certain conditions are met. The TPS will be subject to mandatory redemption if the Subordinated Debentures are repaid by the Company. Interest is payable quarterly, and the Company has the option to defer interest payments on the Subordinated Debentures from time to time for a period not to exceed five consecutive years. At December 31, 2023 and 2022, the balance of Subordinated Debentures included in the Company’s Consolidated Balance Sheets, net of discount of $5.1 million and $5.6 million, was $21.7 million and $21.2 million, respectively. The amortization of discount was $420,000, $412,000 and $402,000 for the years ended December 31, 2023, 2022 and 2021, respectively.

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Subordinated Debentures

12 Months Ended

Dec. 31, 2023

Debt Disclosure [Abstract]

Subordinated Debentures

Note 9 — Borrowings

Borrowings consisted of FHLB advances, which represent collateralized obligations with the FHLB. The following is a summary of contractual maturities of FHLB advances:

	As of December 31,
	2023					2022
	Outstanding Balance		Weighted Average Rate			Outstanding Balance		Weighted Average Rate
	(dollars in thousands)
Open advances	$	212,500		5.70	%	$	250,000		4.65	%
Advances due within 12 months		37,500		0.40			50,000		0.97
Advances due over 12 months through 24 months		12,500		1.90			37,500		0.40
Advances due over 24 months through 36 months		62,500		4.37			12,500		1.90
Outstanding advances	$	325,000		4.69	%	$	350,000		3.57	%

The following is financial data pertaining to FHLB advances:

	As of December 31,
	2023			2022			2021
	(dollars in thousands)
Weighted-average interest rate at end of year		4.69	%		3.57	%		1.05	%
Weighted-average interest rate during the year		3.48	%		1.52	%		1.17	%
Average balance of FHLB advances	$	197,390		$	148,027		$	145,277
Maximum amount outstanding at any month-end	$	450,000		$	350,000		$	162,500

We have pledged loans receivable with carrying values of $2.36 billion at December 31, 2023, as collateral with the FHLB for this borrowing facility. The total borrowing capacity available from the pledged collateral is $1.54 billion, of which $1.09 billion remained available at December 31, 2023. At December 31, 2023, the available borrowing capacity through the Federal Reserve Bank of San Francisco Discount Window and the BTFP was $23.2 million on pledged securities with market values of $24.8 million, none of which was outstanding. At December 31, 2022, the available borrowing capacity through the Federal Reserve Bank of San Francisco Discount Window was $22.0 million on pledged securities with market values of $23.4 million, none of which was outstanding.

At December 31, 2023, advances from the FHLB with a weighted average interest rate of 4.69% were $325.0 million, a decrease of $25.0 million from $350.0 million with a weighted average interest rate of 3.57% at December 31, 2022. FHLB open advances were $212.5 million with a weighted average interest rate of 5.70% while the remainder of term advances were $112.5 million with a weighted average interest rate of 2.77% at December 31, 2023. At December 31, 2022, the Bank had $250.0 million of open advances and $100.0 million of term advances at the FHLB with a weighted average rate of 4.65% and 0.87%, respectively. For the years ended December 31, 2023, 2022 and 2021, interest expense on FHLB advances were $6.9 million, $2.2 million and $1.7 million, respectively, and the weighted-average interest rates were 3.48%, 1.52% and 1.17%, respectively.

Note 10 — Subordinated Debentures

On August 20, 2021, the Company issued Fixed-to-Floating Subordinated Notes (“2031 Notes”) of $110.0 million with a final maturity date of September 1, 2031. The 2031 Notes have an initial fixed interest rate of 3.75% per annum, payable semi-annually in arrears on March 1 and September 1 of each year, up to but excluding September 1, 2026. From and including September 1, 2026 and thereafter, the 2031 Notes will bear interest at a floating rate per annum equal to the Benchmark rate (which is expected to be the Three-Month Term SOFR) plus 310 basis points, payable quarterly in arrears on March 1, June 1, September 1 and December 1 of each year. If the then current three-month term SOFR rate is less than zero, the three-month SOFR will be deemed to be zero. Debt issuance cost was $2.1 million, which is being amortized through the 2031 Notes maturity date. At December 31, 2023 and 2022, the balance of the 2031 Notes included in the Company’s Consolidated Balance Sheet, net of debt issuance cost, was $108.3 million and $108.2 million, respectively. The amortization of debt issuance cost was $183,000, $176,000 and $62,000 for the years ended December 31, 2023, 2022 and 2021, respectively.

The Company issued Fixed-to-Floating Subordinated Notes (“2027 Notes”) of $100.0 million on March 21, 2017, with a final maturity on March 30, 2027. The Notes have an initial fixed interest rate of 5.45% per annum, payable semi-annually on March 30 and September 30 of each year. From and including March 30, 2022 and thereafter, the 2027 Notes bear interest

at a floating rate equal to the then current three-month LIBOR, as calculated on each applicable date of determination, plus 3.315% payable quarterly. If the then current three-month LIBOR is less than zero, three-month LIBOR will be deemed to be zero. Debt issuance cost was $2.3 million, which is being amortized through the Note’s maturity date.

During the year ended December 31, 2022, the Company redeemed its 2027 Notes. A portion of the redemption was funded with the proceeds from the Company’s 2021 subordinated debt offering. The redemption price for each of the 2027 Notes equaled 100% of the outstanding principal amount redeemed, plus any accrued and unpaid interest thereon. All interest accrued on the 2027 Notes ceased to accrue on and after March 30, 2022. Upon the redemption, the Company recognized a pre-tax charge of $1.1 million for the remaining unamortized debt issuance costs associated with the 2027 Notes. The amortization of debt issuance cost was $1.1 million and $0.3 million for the years ended December 31, 2022 and 2021, respectively.

At December 31, 2023 and 2022, the balance of Fixed-to-Floating Subordinated Notes included in the Company’s Consolidated Balance Sheet, net of debt issuance cost, was $108.3 million and $108.2 million, respectively.

The Company assumed Junior Subordinated Deferrable Interest Debentures (“Subordinated Debentures”) as a result of an acquisition in 2014 with an unpaid principal balance of $26.8 million and an estimated fair value of $18.5 million. The $8.3 million discount is being amortized to interest expense through the debentures’ maturity date of March 15, 2036. A trust was formed in 2005 which issued $26.0 million of Trust Preferred Securities (“TPS”) at a 6.26% fixed rate for the first five years and a variable rate at the three-month LIBOR plus 140 basis points thereafter and invested the proceeds in the Subordinated Debentures. The rate on the TPS at December 31, 2023 was 7.05%. Beginning September 15, 2023, the variable rate on the TPS changed to the three-month SOFR plus approximately 166 basis points, representing a credit spread of 140 basis points and an approximate 26 basis point adjustment to convert three-month LIBOR to three-month SOFR. The Company may redeem the Subordinated Debentures at an earlier date if certain conditions are met. The TPS will be subject to mandatory redemption if the Subordinated Debentures are repaid by the Company. Interest is payable quarterly, and the Company has the option to defer interest payments on the Subordinated Debentures from time to time for a period not to exceed five consecutive years. At December 31, 2023 and 2022, the balance of Subordinated Debentures included in the Company’s Consolidated Balance Sheets, net of discount of $5.1 million and $5.6 million, was $21.7 million and $21.2 million, respectively. The amortization of discount was $420,000, $412,000 and $402,000 for the years ended December 31, 2023, 2022 and 2021, respectively.

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Income Taxes

12 Months Ended

Dec. 31, 2023

Income Tax Disclosure [Abstract]

Income Taxes

Note 11 — Income Taxes

In accordance with the provisions of ASC 740, the Company periodically reviews its income tax positions based on tax laws and regulations and financial reporting considerations, and records adjustments as appropriate. This review takes into consideration the status of current taxing authorities’ examinations of the Company’s tax returns, recent positions taken by the taxing authorities on similar transactions, if any, and the overall tax environment.

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:

	Year Ended December 31,
	2023		2022		2021
	(in thousands)
Unrecognized tax benefits at beginning of year	$	258	$	258	$	—
Gross increase for new tax positions		—		—		258
Unrecognized tax benefits at end of year	$	258	$	258	$	258

The total amount of unrecognized tax benefits that would affect our effective tax rate if recognized was $258,000 as of December 31, 2023, 2022 and 2021. The Company records interest expense and penalties related to unrecognized tax benefits in income tax expense. The amount of accrued interest was $71,000 and $33,000 at December 31, 2023 and 2022, respectively. The amount of penalties accrued was $112,000 and $44,000 at December 31, 2023 and 2022, respectively.

For the years ended December 31, 2023 and 2022, there was no change to unrecognized tax benefits related to California Enterprise Zone hiring credits. For the year ended December 31, 2021, unrecognized tax benefits increased by $258,000 related to California Enterprise Zone hiring credits.

We account for interest and penalties related to uncertain tax positions as part of our provision for federal and state income taxes. Accrued interest and penalties are included within accrued expenses and liabilities on the Consolidated Balance Sheets.

As of December 31, 2023, the Company is subject to examination by federal and various state tax authorities for certain years ending December 31, 2019 through 2022. As of December 31, 2023, the Company is under audit with the state of California for tax years 2020 and 2021.

A summary of the provision for income taxes was as follows:

	Year Ended December 31,
	2023			2022		2021
	(in thousands)
Current expense:
Federal	$	26,336		$	1,310	$	21,805
State		13,610			304		10,901
Total current expense		39,946			1,614		32,706
Deferred expense (benefit):
Federal	$	(4,980	)		27,674		4,914
State		(426	)		10,045		(803	)
Total deferred expense		(5,406	)		37,719		4,111
Income tax expense	$	34,540		$	39,333	$	36,817

Deferred tax assets and liabilities were as follows:

	Year Ended December 31,
	2023			2022			2021
	(in thousands)
Deferred tax assets:
Provision for credit losses	$	20,745		$	21,626		$	21,671
Purchase accounting		1,467			2,149			3,360
Net operating loss carryforward		13,712			14,590			15,316
Unrealized loss on securities available for sale		29,120			35,973			3,421
Lease liability		13,729			13,029			14,712
Tax credits		—			1,711			—
State taxes		2,741			54			2,318
Other		4,283			3,793			4,032
Total deferred tax assets		85,797			92,925			64,830
Deferred tax liabilities:
Mark to market		(32,992	)		(38,916	)		(3,531	)
Depreciation		(333	)		(1,292	)		(1,292	)
Leases - right of use assets		(12,592	)		(11,932	)		(13,738	)
Other		(2,790	)		(2,836	)		(2,650	)
Total deferred tax liabilities		(48,707	)		(54,976	)		(21,211	)
Valuation allowance		(1,864	)		(1,276	)		(1,644	)
Net deferred tax assets	$	35,226		$	36,673		$	41,975

As of each reporting date, management considers the realization of deferred tax assets based on management’s judgment of various future events and uncertainties, including the timing and amount of future income, as well as the implementation of various tax planning strategies to maximize realization of deferred tax assets. A valuation allowance is provided when it is more likely than not that some portion of deferred tax assets will not be realized. As of December 31, 2023, management determined that a valuation allowance of $1.9 million was appropriate against certain state net operating losses. For all other deferred tax assets, management believes it was more likely than not that these deferred tax assets will be realized principally through future taxable income and reversal of existing taxable temporary differences. As of December 31, 2022, management determined that a valuation allowance of $1.3 million was appropriate against certain state net operating losses.

As of December 31, 2023, the Company had net operating loss carryforwards of $7.2 million and $190.9 million for federal and state income tax purposes, respectively. The federal net operating loss carryforwards of $7.2 million expire at various dates from 2034 to 2035. The state net operating loss carryforwards include California of $128.9 million which expire at various dates from 2031 through 2035, and Illinois of $62.0 million which expire at various dates from 2035-2036. Management determined that a partial valuation allowance was required against the Illinois net operating loss carryforwards. As of December 31, 2023, the Company had no remaining low income housing tax credit carryforwards.

Reconciliation between the federal statutory income tax rate and the effective tax rate is shown in the following table:

	Year Ended December 31,
	2023			2022			2021
Federal statutory income tax rate		21.00	%		21.00	%		21.00	%
State taxes, net of federal tax benefits		9.06			7.33			5.81
Tax credit - federal		(1.52	)		(1.30	)		(1.16	)
Low-income housing amortization		1.64			1.34			1.37
Other		(0.03	)		(0.42	)		0.16
Effective tax rate		30.15	%		27.95	%		27.18	%

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Accumulated Other Comprehensive Income (Loss)

12 Months Ended

Dec. 31, 2023

Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]

Accumulated Other Comprehensive Income (Loss)

Note 12 — Accumulated Other Comprehensive Income (Loss)

Activity in accumulated other comprehensive income for the year ended December 31, 2023, 2022 and 2021 was as follows:

	Unrealized Gains and Losses on Available for Sale Securities			Unrealized Gains and Losses on Cash Flow Hedge		Tax Benefit (Expense)			Total
	(in thousands)
For the year ended December 31, 2023
Balance at beginning of period	$	(124,958	)	$	—	$	35,973		$	(88,985	)
Other comprehensive income (loss) before reclassification		21,795			306		(6,351	)		15,750
Reclassification from accumulated other comprehensive income		1,871			—		(564	)		1,307
Net current period other comprehensive income		23,666			306		(6,915	)		17,057
Balance at end of period	$	(101,292	)	$	306	$	29,058		$	(71,928	)
For the year ended December 31, 2022
Balance at beginning of period	$	(11,864	)	$	—	$	3,421		$	(8,443	)
Other comprehensive income (loss) before reclassification		(113,094	)		—		32,552			(80,542	)
Net current period other comprehensive income		(113,094	)		—		32,552			(80,542	)
Balance at end of period	$	(124,958	)	$	—	$	35,973		$	(88,985	)
For the year ended December 31, 2021
Balance at beginning of period	$	4,323		$	—	$	(1,247	)	$	3,076
Other comprehensive income (loss) before reclassification		(16,686	)		—		4,668			(12,018	)
Reclassification from accumulated other comprehensive income		499			—		—			499
Net current period other comprehensive income		(16,187	)		—		4,668			(11,519	)
Balance at end of period	$	(11,864	)	$	—	$	3,421		$	(8,443	)

For the year ended December 31, 2023, there was a $1.9 million reclassification from accumulated other comprehensive income to net loss on sales of securities in noninterest income. Net unrealized losses of $1.7 million related to these sold securities had previously been recorded in accumulated other comprehensive income or loss.

For the year ended December 31, 2022, there was no sale of securities.

For the year ended December 31, 2021, there was a $0.5 million reclassification from accumulated other comprehensive income to net loss on sales of securities in noninterest income. Net unrealized losses of $0.1 million related to these sold securities had previously been recorded in accumulated other comprehensive income or loss.

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Regulatory Matters

12 Months Ended

Dec. 31, 2023

Regulatory Capital Requirements Under Banking Regulations [Abstract]

Regulatory Matters

Note 13 — Regulatory Matters

Risk-Based Capital

Federal bank regulatory agencies require bank holding companies and banks to maintain a minimum ratio of qualifying total capital to risk-weighted assets of 8.00% and a minimum ratio of Tier 1 capital to risk-weighted assets of 6.00%. 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 4.00%.

In order for banks to be considered “well capitalized,” federal bank regulatory agencies require them to maintain a minimum ratio of qualifying total capital to risk-weighted assets of 10.00% and a minimum ratio of Tier 1 capital to

risk-weighted assets of 8.00%. 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 5.00%.

At December 31, 2023, the Bank’s capital ratios exceeded the minimum requirements to place the Bank in the “well capitalized” category and the Company exceeded all of its applicable minimum regulatory capital ratio requirements.

A capital conservation buffer of 2.50% 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 6.27% and 5.86% and the Company's capital conservation buffer was 6.20% and 5.71% as of December 31, 2023 and 2022, respectively.

The capital ratios of Hanmi Financial and the Bank as of December 31, 2023 and 2022 were as follows:

	Actual					Minimum Regulatory Requirement					Minimum to be Categorized as “Well Capitalized”
	Amount		Ratio			Amount		Ratio			Amount		Ratio
	(dollars in thousands)
December 31, 2023
Total capital (to risk-weighted assets):
Hanmi Financial	$	947,286		14.95	%	$	506,891		8.00	%	N/A		N/A
Hanmi Bank	$	904,153		14.27	%	$	506,741		8.00	%	$	633,426		10.00	%
Tier 1 capital (to risk-weighted assets):
Hanmi Financial	$	773,179		12.20	%	$	380,168		6.00	%	N/A		N/A
Hanmi Bank	$	840,046		13.26	%	$	380,056		6.00	%	$	506,741		8.00	%
Common equity Tier 1 capital (to risk-weighted assets)
Hanmi Financial	$	751,516		11.86	%	$	285,126		4.50	%	N/A		N/A
Hanmi Bank	$	840,046		13.26	%	$	285,042		4.50	%	$	411,727		6.50	%
Tier 1 capital (to average assets):
Hanmi Financial	$	773,179		10.37	%	$	298,277		4.00	%	N/A		N/A
Hanmi Bank	$	840,046		11.32	%	$	296,948		4.00	%	$	371,185		5.00	%
December 31, 2022
Total capital (to risk-weighted assets):
Hanmi Financial	$	901,239		14.49	%	$	497,508		8.00	%	N/A		N/A
Hanmi Bank	$	860,503		13.86	%	$	496,607		8.00	%	$	620,758		10.00	%
Tier 1 capital (to risk-weighted assets):
Hanmi Financial	$	728,344		11.71	%	$	373,131		6.00	%	N/A		N/A
Hanmi Bank	$	797,608		12.85	%	$	372,455		6.00	%	$	496,607		8.00	%
Common equity Tier 1 capital (to risk-weighted assets)
Hanmi Financial	$	707,101		11.37	%	$	279,848		4.50	%	N/A		N/A
Hanmi Bank	$	797,608		12.85	%	$	279,341		4.50	%	$	403,493		6.50	%
Tier 1 capital (to average assets):
Hanmi Financial	$	728,344		10.07	%	$	289,311		4.00	%	N/A		N/A
Hanmi Bank	$	797,608		11.07	%	$	288,110		4.00	%	$	360,137		5.00	%

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Fair Value Measurements

12 Months Ended

Dec. 31, 2023

Fair Value Disclosures [Abstract]

Fair Value Measurements

Note 14 — Fair Value Measurements

Fair Value Measurements

ASC 820, Fair Value Measurements and Disclosures, defines fair value, establishes a framework for measuring fair value including a three-level valuation hierarchy, and expands disclosures about fair value measurements. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The three-level fair value hierarchy requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The three levels of inputs that may be used to measure fair value are defined as follows:

•Level 1 - Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date.

•Level 2 - Significant other observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, and other inputs that are observable or can be corroborated by observable market data.

•Level 3 - Significant unobservable inputs that reflect a company’s own assumptions about the assumptions that market participants would use in pricing an asset or liability.

Fair value is used on a recurring basis for certain assets and liabilities in which fair value is the primary basis of accounting. Additionally, fair value is used on a non-recurring basis to evaluate assets or liabilities for impairment or for disclosure purposes.

We record securities available for sale at fair value on a recurring basis. Certain other assets, such as loans held for sale, nonperforming loans, OREO, bank-owned premises, and core deposit intangible, are recorded at fair value on a non-recurring basis. Non-recurring fair value measurements typically involve assets that are periodically evaluated for impairment and for which any impairment is recorded in the period in which the re-measurement is performed.

The following methods and assumptions were used to estimate the fair value of each class of financial instrument below:

Securities available for sale - The fair values of securities available for sale are determined by obtaining quoted prices on nationally recognized securities exchanges. If quoted prices are not available, fair values are measured using matrix pricing, which is a mathematical technique used widely in the industry to value debt securities without relying exclusively on quoted prices for the specific securities but rather by relying on the securities’ relationship to other benchmark quoted securities, or other model-based valuation techniques requiring observable inputs other than quoted prices such as yield curve, prepayment speeds, and default rates. Level 1 securities include U.S. Treasury securities and mutual funds that are traded on an active exchange or by dealers or brokers in active over-the-counter markets. The fair value of these securities is determined by quoted prices on an active exchange or over-the-counter market. Level 2 securities primarily include mortgage-backed securities, collateralized mortgage obligations, U.S. government agency securities and municipal bonds in markets that are active. In determining the fair value of the securities categorized as Level 2, we obtain reports from an investment accounting service provider detailing the fair value of each investment security held as of each reporting date. The investment accounting service provider obtains prices from nationally recognized pricing services. We review the prices obtained for reasonableness based on our understanding of the marketplace, and also consider any credit issues related to the bonds. As we have not made any adjustments to the market quotes provided to us and as they are based on observable market data, they have been categorized as Level 2 within the fair value hierarchy. Level 3 securities are instruments that are not traded in the market. Therefore, no observable market data for the instrument is available, which necessitates the use of significant unobservable inputs.

Derivatives – The fair values of derivatives are based on valuation models using observable market data as of the measurement date (Level 2). Our derivatives are traded in an over-the-counter market where quoted market prices are not always available. Therefore, the fair values of derivatives are determined using quantitative models that utilize multiple market inputs. The inputs will vary based on the type of derivative, but could include interest rates, prices and indices to generate continuous yield or pricing curves, prepayment rates, and volatility factors to value the position. The majority of market inputs are actively quoted and can be validated through external sources, including brokers, market transactions and third-party pricing services.

Loans held for sale – All loans held for sale are SBA loans carried at the lower of cost or fair value. Management obtains quotes, bids or pricing indication sheets on all, or, part of these loans directly from the purchasing financial institutions.

Premiums received, or, to be received on the quotes, bids or pricing indication sheets are indicative of the fact that cost is lower than fair value. At December 31, 2023 and 2022, the entire balance of SBA loans held for sale was recorded at its cost. We record SBA loans held for sale on a nonrecurring basis with Level 2 inputs.

Nonperforming loans – Nonaccrual loans receivable and performing restructured loans receivable are considered nonperforming for reporting purposes and are measured and recorded at fair value on a non-recurring basis. All nonperforming loans with a carrying balance over $250,000 are individually evaluated for the amount of expected credit losses, if any. Nonperforming loans with a carrying balance of $250,000 or less are evaluated collectively. However, from time to time, nonrecurring fair value adjustments to collateral dependent nonperforming loans are recorded based on either the current appraised value of the collateral, a Level 3 measurement, or management’s judgment and estimation of value reported on older appraisals that are then adjusted based on recent market trends, also a Level 3 measurement.

OREO – Fair value of OREO is based primarily on third-party appraisals, less costs to sell and result in a Level 3 classification of the inputs for determining fair value. Appraisals are required annually and may be updated more frequently as circumstances require and the fair value adjustments are made to OREO based on the updated appraised value of the property.

Servicing assets - On a quarterly basis, the Company utilizes a third-party service to evaluate servicing assets related to loans sold to unaffiliated parties with servicing retained, which results in a Level 3 classification. Servicing assets are assessed for impairment or increased obligation based on fair value at each reporting date.

Other repossessed assets – Fair value of equipment from leasing contracts is based primarily on a third-party valuation service, less costs to sell and result in a Level 3 classification of the inputs for determining fair value. Valuations are required at the time the asset is repossessed and may be subsequently updated periodically due to the Company’s short-term possession of the asset prior to its sale, or, as circumstances require and the fair value adjustments are made to the asset based on its value prior to sale.

Assets and Liabilities Measured at Fair Value on a Recurring Basis

As of December 31, 2023 and 2022, 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		Total Fair Value
	(in thousands)
December 31, 2023
Assets:
Securities available for sale:
U.S. Treasury securities	$	85,488	$	—	$	—	$	85,488
U.S. government agency and sponsored agency obligations:
Mortgage-backed securities - residential		—		442,328		—		442,328
Mortgage-backed securities - commercial		—		47,991		—		47,991
Collateralized mortgage obligations		—		97,411		—		97,411
Debt securities		—		124,625		—		124,625
Total U.S. government agency and sponsored agency obligations		—		712,355		—		712,355
Municipal bonds-tax exempt		—		67,896		—		67,896
Total securities available for sale	$	85,488	$	780,251	$	—	$	865,739
Derivative financial instruments	$	—	$	6,245	$	—	$	6,245
Liabilities:
Derivative financial instruments	$	—	$	5,920	$	—	$	5,920
December 31, 2022
Assets:
Securities available for sale:
U.S. Treasury securities	$	48,026	$	—	$	—	$	48,026
U.S. government agency and sponsored agency obligations:
Mortgage-backed securities - residential		—		465,152		—		465,152
Mortgage-backed securities - commercial		—		51,292		—		51,292
Collateralized mortgage obligations		—		85,485		—		85,485
Debt securities		—		138,499		—		138,499
Total U.S. government agency and sponsored agency obligations		—		740,428		—		740,428
Municipal bonds-tax exempt		—		65,384		—		65,384
Total securities available for sale	$	48,026	$	805,812	$	—	$	853,838
Derivative financial instruments	$	—	$	7,507	$	—	$	7,507
Liabilities:
Derivative financial instruments	$	—	$	7,375	$	—	$	7,375

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

As of December 31, 2023 and 2022, assets and liabilities measured at fair value on a non-recurring basis are as follows:

			Level 1		Level 2		Level 3
	Total		Prices in Active Markets for Identical Assets		Observable Inputs with No Active Market with Identical Characteristics		Significant Unobservable Inputs
	(in thousands)
December 31, 2023
Assets:
Collateral dependent loans (1)	$	7,352	$	—	$	—	$	7,352
Other real estate owned		117		—		—		117
Repossessed personal property		1,305		—		—		1,305
December 31, 2022
Assets:
Collateral dependent loans (2)	$	2,694	$	—	$	—	$	2,694
Other real estate owned		117		—		—		117
Repossessed personal property		467		—		—		467
Servicing assets		7,176		—		—		7,176

(1) Consisted of real estate loans of $2.2 million and commercial and industrial loans of $5.2 million.

(2) Consisted of real estate loans of $2.7 million.

The following table represents quantitative information about Level 3 fair value assumptions for assets measured at fair value on a non-recurring basis at December 31, 2023 and 2022:

	Fair Value		Valuation Techniques	Unobservable Input(s)	Range (Weighted Average)
	(dollars in thousands)
December 31, 2023
Collateral dependent loans:
Real estate loans:
Commercial property
Retail	$	1,530	Market approach	Adjustments to market data	5% to 20% / 15%	(1)
Hospitality		338	Market approach	Adjustments to market data	(30)% to 35% / (1)%	(1)
Other		305	Market approach	Adjustments to market data	(6)% to 1% / (2)%	(1)
Residential		1	Market approach	Adjustments to market data	(15)% to 3% / (6)%	(1)
Total real estate loans		2,174
Commercial and industrial loans		5,178	Market approach	Adjustments to market data	(20)% to 55% / (2)%	(1)
Total	$	7,352
Other real estate owned	$	117	Market approach	Adjustments to market data	(10)% to 5% / (2)%	(1)
Repossessed personal property		1,305	Market approach	Adjustments to market data		(2)
December 31, 2022
Collateral dependent loans:
Real estate loans:
Commercial property
Retail	$	1,930	Market approach	Adjustments to market data	5% to 25% / 16%	(1)
Other		256	Market approach	Adjustments to market data	(42)% to 3% / (24)%	(1)
Residential		508	Market approach	Adjustments to market data	(15)% to 3% / (1)%	(1)
Total real estate loans		2,694
Total	$	2,694
Other real estate owned	$	117	Market approach	Adjustments to market data	(20)% to 20% / (2)%	(1)
Repossessed personal property		467	Market approach	Adjustments to market data		(2)
Servicing assets		7,176	Market approach	Prepayment rate Discount rate	11% to 17% / 16% 22% to 25% / 22%	(3)

(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 adjustment represent decreases.

(2)The equipment is usually too low 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.

(3)Fair value is based on a valuation model using the present value of estimated future cash flows, prepayment speeds, default rates, and discount rates. Servicing assets are subsequently measured using the amortization method which requires servicing rights to be amortized into income over the period of the estimated future net servicing income of the underlying loans.

ASC 825, Financial Instruments, requires disclosure of the fair value of financial assets and financial liabilities, including those financial assets and financial liabilities that are not measured and reported at fair value on a recurring basis or non-recurring basis. The methodologies for estimating the fair value of financial assets and financial liabilities that are measured on a recurring basis or non-recurring basis are discussed above.

The estimated fair value of financial instruments has been determined by using available market information and appropriate valuation methodologies. However, considerable judgment is required to interpret market data in order to develop estimates of fair value. Accordingly, the estimates presented herein are not necessarily indicative of the amounts that we could realize in a current market exchange. The use of different market assumptions and/or estimation methodologies may have a material effect on the estimated fair value amounts.

Effective January 1, 2018, the Company adopted ASU 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities (Topic 825). This standard, among other provisions, requires public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes. Other than certain financial instruments for which we have concluded that the carrying amounts approximate fair value, the fair value estimates shown below are based on an exit price notion as of December 31, 2023 and 2022, as required by ASU 2016-01. The financial instruments for which we have concluded that the carrying amounts approximate fair value include: cash and due from banks, accrued interest receivable and payable, and noninterest-bearing deposits.

The estimated fair values of financial instruments were as follows:

	December 31, 2023
	Carrying		Fair Value
	Amount		Level 1		Level 2		Level 3
	(in thousands)
Financial assets:
Cash and due from banks	$	302,324	$	302,324	$	—	$	—
Securities available for sale		865,739		85,488		780,251		—
Loans held for sale		12,013		—		12,238		—
Loans receivable, net of allowance for credit losses		6,112,972		—		—		6,007,975
Accrued interest receivable		23,371		23,371		—		—
Financial liabilities:
Noninterest-bearing deposits		2,003,596		—		2,003,596		—
Interest-bearing deposits		4,276,978		—		—		4,271,711
Borrowings and subordinated debentures		455,012		—		323,491		128,229
Accrued interest payable		39,306		39,306		—		—

	December 31, 2022
	Carrying		Fair Value
	Amount		Level 1		Level 2		Level 3
	(in thousands)
Financial assets:
Cash and due from banks	$	352,421	$	352,421	$	—	$	—
Securities available for sale		853,838		48,026		805,812		—
Loans held for sale		8,043		—		8,423		—
Loans receivable, net of allowance for credit losses		5,895,610		—		—		5,808,190
Accrued interest receivable		18,537		18,537		—		—
Financial liabilities:
Noninterest-bearing deposits		2,539,602		—		2,539,602		—
Interest-bearing deposits		3,628,470		—		—		3,623,827
Borrowings and subordinated debentures		479,409		—		345,867		126,828
Accrued interest payable		7,792		7,792		—		—

The methods and assumptions used to estimate the fair value of each class of financial instruments for which it was practicable to estimate that value are explained below:

Cash and due from banks – The carrying amounts of cash and due from banks approximate fair value due to the short-term nature of these instruments (Level 1).

Securities – The fair value of securities, consisting of securities available for sale, is generally obtained from market bids for similar or identical securities, from independent securities brokers or dealers, or from other model-based valuation techniques described above (Level 1 and 2).

Loans held for sale – Loans held for sale, representing the guaranteed portion of SBA loans, are carried at the lower of aggregate cost or fair market value, as determined based upon quotes, bids or sales contract prices (Level 2).

Loans receivable, net of allowance for credit losses – The fair value of loans receivable is estimated based on the discounted cash flow approach. To estimate the fair value of the loans, certain loan characteristics such as account types, remaining terms, annual interest rates or coupons, interest types, past delinquencies, timing of principal and interest payments, current market rates, loan-to-value ratios, loss exposures, and remaining balances are considered. Additionally, the Company’s prior charge-off rates and loss ratios as well as various other assumptions relating to credit, interest, and prepayment risks are used as part of valuing the loan portfolio. Subsequently, the loans were individually evaluated by sorting and pooling them based on loan types, credit risk grades, and payment types. Consistent with the requirements of ASU 2016-01 which was adopted by the Company on January 1, 2018, the fair value of the Company's loans receivable is considered to be an exit price notion as of December 31, 2023 (Level 3).

The fair value of collateral dependent loans is estimated based on the net realizable fair value of the collateral or the observable market price of the most recent sale or quoted price from loans held for sale. The Company does not record loans at fair value on a recurring basis. Nonrecurring fair value adjustments to collateral dependent loans are recorded based on the current appraised value of the collateral (Level 3).

Accrued interest receivable – The carrying amount of accrued interest receivable approximates its fair value (Level 1).

Noninterest-bearing deposits – The fair value of noninterest-bearing deposits is the amount payable on demand at the reporting date (Level 2).

Interest-bearing deposits – The fair value of interest-bearing deposits, such as savings accounts, money market checking, and certificates of deposit, is estimated based on discounted cash flows. The cash flows for non-maturity deposits, including savings accounts and money market checking, are estimated based on their historical decaying experiences. The discount rate used for fair valuation is based on interest rates currently being offered by the Bank on comparable deposits as to amount and term (Level 3).

Borrowings and subordinated debentures – Borrowings consist of FHLB advances, subordinated debentures and other borrowings. Discounted cash flows based on current market rates for borrowings with similar remaining maturities are used to estimate the fair value of borrowings (Level 2 and 3).

Accrued interest payable – The carrying amount of accrued interest payable approximates its fair value (Level 1).

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Share-Based Compensation

12 Months Ended

Dec. 31, 2023

Share-Based Payment Arrangement [Abstract]

Share-Based Compensation

Note 15 — Share-Based Compensation

At December 31, 2023, we maintained the 2021 Equity Compensation Plan (the “2021 Plan”), which became effective on May 26, 2021 and the 2013 Equity Compensation Plan (the “2013 Plan” and collectively with the 2021 Plan, the “Plans”). Once the 2021 Plan was adopted, no further grants were permitted to be made under the 2013 Plan. Outstanding awards granted under the 2013 Plan continue to be governed by the 2013 Plan.

The Company may provide awards of options, stock appreciation rights, restricted stock awards, restricted stock unit awards, shares granted as a bonus or in lieu of another award, dividend equivalents, other stock-based awards or performance awards, together with any other right or interest to a participant. Participants include executives and other employees, officers, directors, consultants and other persons who provide services to the Company or its related entities. Under the 2021 Plan, we may grant equity incentive awards for up to 1,500,000 shares of common stock. As of December 31, 2023, 1,116,555 shares were still available for issuance under the 2021 Plan.

The table below provides the share-based compensation expense and related tax benefits for the periods indicated:

	Year Ended December 31,
	2023		2022		2021
	(in thousands)
Share-based compensation expense	$	2,681	$	2,595	$	2,436
Related tax benefits	$	808	$	752	$	703

As of December 31, 2023, unrecognized share-based compensation expense was $3.8 million with an average expected recognition period of 1.8 years.

2013 and 2021 Equity Compensation Plans

Stock Options

All stock options granted under the Plans have an exercise price equal to the fair market value of the underlying common stock on the date of grant. Stock options granted generally vest based on three to five years of continuous service and expire ten years from the date of grant. New shares of common stock are issued or treasury shares are utilized upon the exercise of stock options. There were no options granted during the three years ended December 31, 2023, 2022 or 2021.

The following information under the Plans is presented for the periods indicated:

	Year Ended December 31,
	2023		2022		2021
	(in thousands)
Total intrinsic value of options exercised (1)	$	343	$	20	$	—
Cash received from options exercised	$	—	$	19	$	—

(1)Intrinsic value represents the difference between the closing stock price on the exercise date and the exercise price, multiplied by the number of options.

The following is a summary of stock option transactions under the Plans for the periods indicated:

	Year Ended December 31,
	2023					2022					2021
	Number of Shares			Weighted- Average Exercise Price Per Share		Number of Shares			Weighted- Average Exercise Price Per Share		Number of Shares			Weighted- Average Exercise Price Per Share
Options outstanding at beginning of period		111,000		$	19.89		115,938		$	19.58		125,938		$	19.59
Options exercised		(50,000	)	23.29			(1,500	)	$	12.54		—		$	—
Options forfeited		—		$	—		—		$	—		(10,000	)	$	19.74
Options expired		—		$	—		(3,438	)	$	12.54		—		$	—
Options outstanding at end of period		61,000		$	22.73		111,000		$	19.89		115,938		$	19.58
Options exercisable at end of period		61,000		$	22.73		111,000		$	19.89		115,938		$	19.58

As of December 31, 2023, there was no unrecognized compensation cost as all stock options issued under the Plans had fully vested.

As of December 31, 2023, stock options outstanding under the Plans were as follows:

	Options Outstanding									Options Exercisable
	Number of Shares		Intrinsic Value (1)			Weighted- Average Exercise Price Per Share		Weighted- Average Remaining Contractual Life		Number of Shares		Intrinsic Value (1)			Weighted- Average Exercise Price Per Share		Weighted- Average Remaining Contractual Life
$20.00 to $21.49		3,000	$	(7	)	$	20.64		0.59		3,000	$	(7	)	$	20.64		0.59
$21.50 to $23.49		55,000		(247	)	$	22.73		0.82		55,000		(247	)	$	22.73		0.82
$23.50 to $24.83		3,000		(20	)		24.83		1.48		3,000		(20	)		24.83		1.48
		61,000	$	(274	)	$	22.73		0.84		61,000	$	(274	)	$	22.73		0.84

(1)Intrinsic value represents the difference between the closing stock price on the last trading day of the period, which was $19.40 as of December 31, 2023, and the exercise price, multiplied by the number of options. This value is presented in thousands.

Restricted Stock Awards

Restricted stock awards under the Plans become fully vested after a certain number of years or after certain performance criteria are met. Hanmi Financial becomes entitled to an income tax deduction in an amount equal to the taxable income reported by the holders of the restricted shares when the restrictions are released and the shares are issued. Restricted shares are forfeited if officers and employees terminate prior to the lapsing of restrictions. Forfeitures of restricted stock are treated as canceled shares.

The table below provides information for restricted stock awards under the Plans for the periods indicated:

	2023					2022					2021
	Number of Shares			Weighted- Average Grant Date Fair Value Per Share		Number of Shares			Weighted- Average Grant Date Fair Value Per Share		Number of Shares			Weighted- Average Grant Date Fair Value Per Share
Restricted stock at beginning of period		156,174		$	21.29		152,087		$	17.24		243,708		$	15.60
Restricted stock granted		131,021		$	18.86		101,271		$	24.56		75,679		$	19.62
Restricted stock vested		(83,968	)	$	19.34		(89,699	)	$	23.95		(134,659	)	$	16.01
Restricted stock forfeited		(6,782	)	$	23.08		(7,485	)	$	23.46		(32,641	)	$	15.02
Restricted stock at end of period		196,445		$	20.72		156,174		$	21.29		152,087		$	17.24

As of December 31, 2023, there was $2.5 million of total unrecognized compensation cost related to nonvested shares granted under the Plans. The cost is expected to be recognized over a weighted-average period of 1.8 years. The total fair value of shares vested during the years ended December 31, 2023, 2022 and 2021 was $1.4 million, $2.1 million, and $2.7 million, respectively.

Performance Stock Units

During the twelve months ended December 31, 2023, the Company granted to members of executive management 53,696 performance stock units (“PSUs”) from the 2021 Plan with a grant date fair value of $1.0 million. PSUs are similar to restricted stock awards, except the recipient does not receive the stock immediately, but instead receives it in accordance to a vesting plan and distribution schedule after achieving required performance milestones and upon remaining with the Company for a particular length of time. Each PSU that vests entitles the recipient to receive one share of the Company’s common stock on a specified issuance date.

PSUs granted vest into shares based on a three-year cliff vesting subject to achievement of a total shareholder return (“TSR”) performance metric and, for 2023, were determined to have a grant date fair value of $21.08 per share. The fair value of the performance PSUs at the grant date was determined using a Monte Carlo simulation method. The number of PSUs subject to the TSR that ultimately vest at the end of the three-year vesting performance period, if any, will be based on the relative rank of the Company’s TSR among the TSRs of a peer group of 50 regional banks. Although the recipient does receive dividend equivalent rights for any dividends paid during the performance period based on the target shares granted, no stockholder rights, including voting, or liquidation rights will be conferred upon the recipient until becoming the record holder of those shares.

The table below provides information for performance stock units under the 2021 Plans for the periods indicated:

	2023					2022				2021
	Number of Shares			Weighted- Average Grant Date Fair Value Per Share		Number of Shares		Weighted- Average Grant Date Fair Value Per Share		Number of Shares		Weighted- Average Grant Date Fair Value Per Share
Performance stock at beginning of period		104,599		$	18.83		66,563	$	15.25		23,937	$	9.65
Performance stock granted		53,696		$	21.08		38,036	$	25.10		42,626	$	18.40
Performance stock vested		(23,937	)	$	9.65		—	$	—		—	$	—
Performance stock at end of period		134,358		$	21.37		104,599	$	18.83		66,563	$	15.25

As of December 31, 2023, there was $1.3 million of total unrecognized compensation cost related to units granted under the 2021 Plan. The cost is expected to be recognized over a weighted-average period of 1.9 years.

Compensation expense for these units is based on the fair value of the grants at the grant date and is amortized on a straight-line basis over the vesting period. For the twelve months ended December 31, 2023, total compensation expense for the PSUs was $0.7 million. The total fair value of the PSUs at December 31, 2023 was $2.6 million.

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Earnings per Share

12 Months Ended

Dec. 31, 2023

Earnings Per Share [Abstract]

Earnings per Share

Note 16 — Earnings per Share

The following table is a reconciliation of the components used to derive basic and diluted EPS for the periods indicated:

			Weighted-
	Net		Average		Per
	Income		Shares		Share
	(Numerator)		(Denominator)		Amount (1)
	(dollars in thousands except share and per share data)
Year Ended December 31, 2023
Basic EPS
Net income	$	80,041		30,269,740	$	2.64
Less: income allocated to unvested restricted stock		505		30,269,740		0.02
Basic EPS	$	79,536		30,269,740	$	2.63
Effect of dilutive securities - options and unvested restricted stock		—		60,518		—
Diluted EPS
Net income	$	80,041		30,330,258	$	2.64
Less: income allocated to unvested restricted stock		505		30,330,258		0.02
Diluted EPS	$	79,536		30,330,258	$	2.62
Year Ended December 31, 2022
Basic EPS
Net income	$	101,394		30,299,148	$	3.35
Less: income allocated to unvested restricted stock		558		30,299,148		0.02
Basic EPS	$	100,836		30,299,148	$	3.33
Effect of dilutive securities - options and unvested restricted stock		—		92,909		—
Diluted EPS
Net income	$	101,394		30,392,057	$	3.34
Less: income allocated to unvested restricted stock		558		30,392,057		0.02
Diluted EPS	$	100,836		30,392,057	$	3.32
Year Ended December 31, 2021
Basic EPS
Net income	$	98,677		30,393,559	$	3.25
Less: income allocated to unvested restricted stock		671		30,393,559		0.02
Basic EPS	$	98,006		30,393,559	$	3.22
Effect of dilutive securities - options and unvested restricted stock		—		78,188		—
Diluted EPS
Net income	$	98,677		30,471,747	$	3.24
Less: income allocated to unvested restricted stock		671		30,471,747		0.02
Diluted EPS	$	98,006		30,471,747	$	3.22

(1)Per share amounts may not be able to be recalculated using net income and weighted-average shares presented above due to rounding.

There were no anti-dilutive options outstanding for the years ended December 31, 2023, 2022 and 2021.

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Employee Benefits

12 Months Ended

Dec. 31, 2023

Postemployment Benefits [Abstract]

Employee Benefits

Note 17 — Employee Benefits

401(k) Plan

We have a 401(k) plan for the benefit of substantially all of our employees. We match 75% of participant contributions to the 401(k) plan up to 8% of each 401(k) plan participant’s annual compensation. Contributions to the 401(k) plan were $3.1 million, $2.8 million and $2.6 million for the years ended December 31, 2023, 2022 and 2021, respectively.

Personal Paid Time Off

Full time employees of the Bank are provided a benefit for personal paid time off for vacation and sick time based on their length of employment. As of December 31, 2023 and 2022, the accrued expense liability for personal paid time off was $3.0 million and $2.4 million, respectively.

Bank-Owned Life Insurance

As of December 31, 2023 and 2022, the cash surrender value of bank-owned life insurance was $56.3 million and $55.5 million, respectively. The Bank is the main beneficiary under each policy, although certain current and former employees named on a policy are eligible for their heirs to be paid upon their death. In the event of the death of a covered officer, we will receive the specified insurance benefit from the insurance carrier.

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Commitments and Contingencies

12 Months Ended

Dec. 31, 2023

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Note 18 — Commitments and Contingencies

In the normal course of business, we are involved in various legal claims. Management has reviewed all legal claims against us with in-house or outside legal counsel and has taken into consideration the views of such counsel as to the outcome of the claims. In management’s opinion, the final disposition of all such claims will not have a material adverse effect on our financial position or results of operations.

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Off-Balance Sheet Commitments

12 Months Ended

Dec. 31, 2023

Risks and Uncertainties [Abstract]

Off-Balance Sheet Commitments

Note 19 — Off-Balance Sheet Commitments

The Bank is a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of our customers. These financial instruments include commitments to extend credit and standby letters of credit. These instruments involve, to varying degrees, elements of credit and interest rate risk similar to the risk involved with on-balance sheet items recognized in the Consolidated Balance Sheets and may expire without ever being utilized.

The Bank’s exposure to credit losses in the event of non-performance by the other party to commitments to extend credit and standby letters of credit is represented by the contractual notional amount of those instruments. The Bank uses the same credit policies in making commitments and conditional obligations as it does for extending loan facilities to customers. The Bank evaluates each customer’s creditworthiness on a case-by-case basis. The amount of collateral obtained, if deemed necessary by the Bank upon an extension of credit, was based on management’s credit evaluation of the counterparty. Collateral held varies but may include accounts receivable, inventory, premises and equipment, and income-producing or borrower-occupied properties.

Some of the commitments to fund existing loans, lines of credit and letters of credit are expected to expire without being drawn upon. Therefore, the total commitments do not necessarily represent future cash requirements. As of December 31, 2023, the Bank was obligated on $120.0 million of letters of credit to the FHLBSF which were being used as collateral for public fund deposits, including $120.0 million of deposits from the State of California.

The following table shows the distribution of undisbursed loan commitments as of the dates indicated:

	December 31,
	2023		2022
	(in thousands)
Commitments to extend credit	$	813,960	$	780,543
Standby letters of credit		83,725		71,829
Commercial letters of credit		33,140		19,945
Total undisbursed loan commitments	$	930,825	$	872,317

The allowance for credit losses related to off-balance sheet items is maintained at a level believed to be sufficient to absorb probable losses related to these unfunded credit facilities. The determination of the allowance adequacy is based on periodic evaluations of the unfunded credit facilities including an assessment of the probability of commitment usage, credit risk factors for loans outstanding to these same customers, and the terms and expiration dates of the unfunded credit facilities. Net adjustments to the allowance for credit losses related to off-balance sheet items are included in other operating expenses.

Activity in the allowance for credit losses related to off-balance sheet items was as follows for the periods indicated:

	As of and for the Year Ended December 31,
	2023			2022		2021
	(in thousands)
Balance at beginning of period	$	3,114		$	2,586	$	2,792
Provision (recovery) for credit losses		(640	)		528		(206	)
Balance at end of period	$	2,474		$	3,114	$	2,586

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Derivatives and Hedging Activities

12 Months Ended

Dec. 31, 2023

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivatives and Hedging Activities

Note 20 — Derivatives and Hedging Activities

Risk Management Objective of Using Derivative

The Company is exposed to certain risk arising from both its business operations and economic conditions. The Company principally manages its exposures to a wide variety of business and operational risks through management of its core business activities. The Company manages economic risks, including interest rate, liquidity, and credit risk, primarily by managing the amount, sources, and duration of its assets and liabilities and through the use of derivative financial instruments. Specifically, the Company enters into derivative financial instruments to manage exposures that arise from business activities that result in the receipt or payment of future known and uncertain cash amounts, the value of which are determined by interest rates.

Derivatives Designated as Hedging Instruments - Cash Flow Hedges of Interest Rate Risk

The Company’s objectives in using interest rate derivatives are to add stability to interest income and to manage its exposure to interest rate movements. To accomplish this objective, the Company primarily uses interest rate swaps as part of its interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of fixed-rate amounts from a counterparty in exchange for the Company making variable-rate payments over the life of the agreements without exchange of the underlying notional amount. Such derivatives were used to hedge the variable cash flows associated with existing variable-rate assets. During the fourth quarter of 2023, the Company entered into a $100.0 million notional interest rate swap designated as a cash flow hedge, with an effective date of May 1, 2024 and a maturity date of May 1, 2026, to hedge a pool of Prime-indexed loans against falling rates.

For derivatives designated and that qualify as cash flow hedges of interest rate risk, the gain or loss on the derivative is recorded in Accumulated Other Comprehensive Income and subsequently reclassified into interest income in the same period(s) during which the hedged transaction affects earnings. Amounts reported in accumulated other comprehensive income related to derivatives will be reclassified to interest income as interest payments are received on the Company’s variable-rate asset. During the next 12 months, the Company estimates that an additional $0.4 million will be reclassified as an increase to interest income.

Derivatives Not Designated as Hedging Instruments

The Company also enters into interest rate swap agreements between the Company and its customers and other third-party counterparties. The Company enters into “back to back swap” arrangements whereby the Company executes interest rate swap agreements with its customers and acquires an offsetting swap position from a third-party counterparty. These derivative financial statements are accounted for at fair value, with changes in fair value recognized in the Company’s Consolidated Statements of Income.

The table below presents the fair value of the Company’s derivative financial instruments as well as their classification on the Balance Sheet as of December 31, 2023 and 2022.

As of December 31, 2023	Derivative Assets					Derivative Liabilities
	Notional Amount		Balance Sheet Location	Fair Value		Notional Amount		Balance Sheet Location	Fair Value
	(in thousands)
Derivatives not designated as hedging instruments
Interest rate products	$	104,571	Other Assets	$	5,939	$	104,571	Other Liabilities	$	5,920
Total derivatives not designated as hedging instruments				$	5,939				$	5,920
Derivatives designated as hedging instruments
Interest rate products	$	100,000	Other Assets	$	306	$	—	Other Liabilities	$	—
Total derivatives designated as hedging instruments				$	306				$	—
As of December 31, 2022	Derivative Assets					Derivative Liabilities
	Notional Amount		Balance Sheet Location	Fair Value		Notional Amount		Balance Sheet Location	Fair Value
	(in thousands)
Derivatives not designated as hedging instruments
Interest rate products	$	61,460	Other Assets	$	7,507	$	61,460	Other Liabilities	$	7,375
Total derivatives not designated as hedging instruments				$	7,507				$	7,375

The table below presents the effect of cash flow hedge accounting on Accumulated Other Comprehensive Income as of December 31, 2023.

As of December 31, 2023
Derivatives in Subtopic 815-20 Hedging Relationships	Amount of Gain or (Loss) Recognized in OCI on Derivative		Amount of Gain or (Loss) Recognized in OCI Included Component		Amount of Gain or (Loss) Recognized in OCI Excluded Component		Location of Gain or (Loss) Recognized from Accumulated Other Comprehensive Income into Income	Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income		Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income Included Component		Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income Excluded Component
	(in thousands)
Derivatives in Cash Flow Hedging Relationships
Interest Rate Products	$	306	$	306	$	—	Interest Income	$	—	$	—	$	—
Total	$	306	$	306	$	—		$	—	$	—	$	—

The table below presents the effect of the Company’s derivative financial instruments that are not designated as hedging instruments on the Income Statement as of December 31, 2023, 2022 and 2021.

Derivatives Not Designated as Hedging Instruments under Subtopic 815-20	Location of Gain or (Loss) Recognized in Income on Derivative	Amount of Gain or (Loss) Recognized in Income on Derivative
		For the Year Ended December 31,
		2023			2022		2021
		(in thousands)
Interest rate products	Other income	$	(114	)	$	113	$	80
Total		$	(114	)	$	113	$	80

The Company recognized $0.6 million of fee income from its derivative financial instruments for the twelve months ended December 31, 2023. There were no derivative financial instruments fee income recognized for the twelve months ended December 31, 2022 and 2021.

The table below presents a gross presentation, the effects of offsetting, and a net presentation of the Company’s derivatives as of December 31, 2023 and 2022. The net amounts of derivative assets or liabilities can be reconciled to the tabular disclosure of fair value. The tabular disclosure of fair value provides the location that derivative assets and liabilities are presented on the Balance Sheet.

Offsetting of Derivative Assets
As of December 31, 2023
							Gross Amounts Not Offset in the Consolidated Balance Sheets
	Gross Amounts of Recognized Assets		Gross Amounts Offset in the Statement of Financial Position		Net Amounts of Assets presented in the Statement of Financial Position		Financial Instruments		Cash Collateral Received		Net Amount
	(in thousands)
Derivatives	$	6,245	$	—	$	6,245	$	284	$	5,731	$	230
Offsetting of Derivative Liabilities
As of December 31, 2023
							Gross Amounts Not Offset in the Consolidated Balance Sheets
	Gross Amounts of Recognized Liabilities		Gross Amounts Offset in the Statement of Financial Position		Net Amounts of Liabilities presented in the Statement of Financial Position		Financial Instruments		Cash Collateral Provided		Net Amount
	(in thousands)
Derivatives	$	5,920	$	—	$	5,920	$	284	$	—	$	5,636
Offsetting of Derivative Assets
As of December 31, 2022
							Gross Amounts Not Offset in the Consolidated Balance Sheets
	Gross Amounts of Recognized Assets		Gross Amounts Offset in the Statement of Financial Position		Net Amounts of Assets presented in the Statement of Financial Position		Financial Instruments		Cash Collateral Received		Net Amount
	(in thousands)
Derivatives	$	7,507	$	—	$	7,507	$	7,375	$	132	$	—
Offsetting of Derivative Liabilities
As of December 31, 2022
							Gross Amounts Not Offset in the Consolidated Balance Sheets
	Gross Amounts of Recognized Liabilities		Gross Amounts Offset in the Statement of Financial Position		Net Amounts of Liabilities presented in the Statement of Financial Position		Financial Instruments		Cash Collateral Provided		Net Amount
	(in thousands)
Derivatives	$	7,375	$	—	$	7,375	$	7,375	$	—	$	—

The Company has agreements with each of its derivative counterparties that contain a provision stating if the Company either defaults or is capable of being declared in default on any of its indebtedness, then the Company could also be declared in default on its derivative obligations. In addition, these agreements may also require the Company to post additional collateral should it fail to maintain its status as a well- or adequately-capitalized institution.

As of December 31, 2023 and 2022, the fair value of derivatives in a net liability position, which includes accrued interest but excludes any adjustment for nonperformance risk, related to these agreements was $0. As of December 31, 2023 and 2022, no collateral was provided related to these agreements.

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Qualified Affordable Housing Project Investments

12 Months Ended

Dec. 31, 2023

Investments in Affordable Housing Projects [Abstract]

Qualified Affordable Housing Project Investments

Note 21 — Qualified Affordable Housing Project Investments

The Company invests in qualified affordable housing projects. At December 31, 2023 and 2022, the balance of the investment for qualified affordable housing projects was $16.6 million and $5.9 million, respectively. This balance is reflected in prepaid expenses and other assets on the consolidated balance sheets. Total unfunded commitments related to the investments

in qualified affordable housing projects aggregated $10.0 million and $27,000 at December 31, 2023 and 2022, respectively. The Company expects to fulfill the majority of these commitments over the next five years.

For each of the twelve months ended December 31, 2023, 2022 and 2021, the Company recognized amortization expense of $1.9 million, which was included within income tax expense on the consolidated statements of income.

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Liquidity

12 Months Ended

Dec. 31, 2023

Liquidity [Abstract]

Liquidity

Note 22 — Liquidity

Hanmi Financial

At December 31, 2023 and 2022, Hanmi Financial had $7.5 million and $10.6 million, respectively, in cash on deposit with the Bank. In addition, at December 31, 2023, Hanmi Financial had $32.4 million of securities available for sale that consisted solely of U.S. Treasury securities.

Hanmi Bank

The principal objective of our liquidity management program is to maintain the Bank’s ability to meet the day-to-day cash flow requirements of our customers who either wish to withdraw funds or to draw upon credit facilities to meet their cash needs. Management believes that the Bank, on a stand-alone basis, has adequate liquid assets to meet its current obligations. The Bank’s primary funding source will continue to be deposits originating from its branch platform. The Bank’s wholesale funds historically consisted of FHLB advances, brokered deposits, as well as State of California time deposits. As of December 31, 2023 and 2022, the Bank had $325.0 million and $350.0 million of FHLB advances, $58.3 million and $83.3 million of brokered deposits, and $120.0 million and $120.0 million of State of California time deposits, respectively.

We monitor the sources and uses of funds on a regular basis to maintain an acceptable liquidity position. The Bank’s primary source of borrowings is the FHLB, from which the Bank is eligible to borrow up to 30% of its assets. As of December 31, 2023, the total borrowing capacity available based on pledged collateral and the remaining available borrowing capacity were $1.54 billion and $1.09 billion, respectively, compared to $1.54 billion and $1.07 billion, respectively, as of December 31, 2022.

The amount that the FHLB is willing to advance differs based on the quality and character of qualifying collateral pledged by the Bank, and the advance rates for qualifying collateral may be adjusted upwards or downwards by the FHLB from time to time. To the extent deposit renewals and deposit growth are not sufficient to fund maturing and withdrawable deposits, repay maturing borrowings, fund existing and future loans, securities, and otherwise fund working capital needs and capital expenditures, the Bank may utilize the remaining borrowing capacity from its FHLB borrowing arrangement.

As a means of augmenting its liquidity, the Bank had an available borrowing source of $23.2 million from the Federal Reserve Discount Window and the BTFP, to which the Bank pledged securities with a market value of $24.8 million, and had no borrowings as of December 31, 2023. The BTFP facility is available until March 11, 2024. The Bank also maintains a line of credit for repurchase agreements up to $100.0 million. The Bank also had three unsecured federal funds lines of credit totaling $115.0 million with no outstanding balances as of December 31, 2023.

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Condensed Financial Information of Parent Company

12 Months Ended

Dec. 31, 2023

Condensed Financial Information Disclosure [Abstract]

Condensed Financial Information of Parent Company

Note 23 — Condensed Financial Information of Parent Company

Balance Sheets

	At December 31,
	2023		2022
	(in thousands)
Assets
Cash	$	7,492	$	10,558
Securities available for sale		32,389		17,660
Investments in consolidated subsidiaries		790,425		728,172
Other assets		3,551		12,611
Total assets	$	833,857	$	769,001
Liabilities and stockholders' equity
Liabilities
Subordinated debentures	$	130,012	$	129,409
Other liabilities		1,954		2,077
Total liabilities		131,966		131,486
Stockholders' equity		701,891		637,515
Total liabilities and stockholders' equity	$	833,857	$	769,001

Statements of Income

	Year Ended December 31,
	2023			2022			2021
	(in thousands)
Dividends from bank subsidiaries	$	44,500		$	57,000		$	20,639
Interest income on securities		1,094			191			—
Interest expense		(6,482	)		(8,037	)		(8,273	)
Other expense		(5,817	)		(5,174	)		(4,891	)
Income before taxes and undistributed income of subsidiary		33,295			43,980			7,475
Income tax benefit		1,403			4,026			3,962
Income before undistributed income of subsidiary		34,698			48,006			11,437
Equity in undistributed income of subsidiary		45,343			53,388			87,239
Net income	$	80,041		$	101,394		$	98,676

Statements of Cash Flows

	Year Ended December 31,
	2023			2022			2021
	(in thousands)
Cash Flows from Operating Activities:
Net income	$	80,041		$	101,394		$	98,676
Adjustments to reconcile net income to net cash used in operating activities
Undistributed income of subsidiary		(45,343	)		(53,388	)		(87,239	)
Depreciation and amortization		409			1,703			1,148
Share-based compensation expense		2,680			2,596			2,437
Change in other assets and liabilities		8,879			(2,019	)		(9,076	)
Net cash provided by operating activities		46,666			50,286			5,946
Cash Flows from Investing Activities:
Purchases of securities		(21,328	)		(17,956	)		—
Proceeds from matured, called and repayment of securities		7,000			—			—
Net cash used in investing activities		(14,328	)		(17,956	)		—
Cash Flows from Financing Activities:
Proceeds from exercise of stock options		—			19			—
Issuance of subordinated debentures		—			—			107,929
Redemption of subordinated debentures, net of treasury debentures		—			(87,300	)		(13,043	)
Cash paid for employee vested shares surrendered due to employee tax liability		(785	)		(732	)		(572	)
Repurchase of common stock		(4,084	)		—			(6,135	)
Cash dividends paid		(30,535	)		(28,636	)		(16,514	)
Net cash provided by (used in) financing activities		(35,404	)		(116,649	)		71,665
Net increase (decrease) in cash		(3,066	)		(84,319	)		77,611
Cash at beginning of year		10,558			94,877			17,266
Cash at end of year	$	7,492		$	10,558		$	94,877

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Subsequent Events

12 Months Ended

Dec. 31, 2023

Subsequent Events [Abstract]

Subsequent Events

Note 24 — Subsequent Events

Cash Dividend

On January 25, 2024, the Company announced that the Board of Directors of the Company declared a quarterly cash dividend of $0.25 per share to be paid on February 22, 2024 to stockholders of record as of the close of business on February 5, 2024.

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Summary of Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2023

Accounting Policies [Abstract]

Summary of Operations

Summary of Operations

Hanmi Financial Corporation (“Hanmi Financial,” the “Company,” “we,” “us” or “our”) is the holding company of Hanmi Bank (the “Bank”).

The Bank is a California state-chartered financial institution, the deposits of which are insured by the FDIC, up to applicable limits. The Bank is a state nonmember bank and the FDIC is its primary federal bank regulator. The California Department of Financial Protection and Innovation is the Bank's primary state bank regulator.

The Bank’s primary operations are related to traditional banking activities, including the acceptance of deposits and originating loans and investing in securities. The Bank is a community bank conducting general business banking, with its primary market encompassing the Korean-American and other ethnic communities. The Bank’s full-service offices are located in markets where many of the businesses are owned by immigrants and other minority groups. The Bank’s client base reflects the multi-ethnic composition of these communities. As of December 31, 2023, the Bank maintained a network of 35 full-service branch offices and eight loan production offices in California, Texas, Illinois, Virginia, New Jersey, New York, Colorado, Georgia and Washington.

Basis of Presentation

Basis of Presentation

The accounting and reporting policies of Hanmi Financial and subsidiaries conform, in all material respects, to U.S. generally accepted accounting principles (“GAAP”) and general practices within the banking industry. The information set forth in the following notes is presented on a continuing operations basis. The following is a summary of the significant accounting policies consistently applied in the preparation of the accompanying Consolidated Financial Statements.

Principles of Consolidation

Principles of Consolidation

The Consolidated Financial Statements include the accounts of Hanmi Financial and its wholly-owned subsidiaries, the Bank, and Hanmi Financial Corporation Statutory Trust I. All intercompany transactions and balances have been eliminated in consolidation.

Use of Estimates in the Preparation of Financial Statements

Use of Estimates in the Preparation of Financial Statements

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Reclassifications

Reclassifications

Certain amounts in the prior years' financial statements and related disclosures were reclassified to conform to the current year presentation with no effect on previously reported net income, stockholders’ equity or cash flows.

Segment Reporting

Segment Reporting

Through our branch network and lending units, we provide a broad range of financial products and services to individuals and companies. These products include demand, time and savings deposits; and commercial and industrial, real estate and consumer lending. While our chief decision makers monitor the revenue streams of our various products and services, operations are managed and financial performance is evaluated on a company-wide basis. Accordingly, we consider all of our operations to be aggregated in one reportable operating segment.

Cash and Due from Banks

Cash and Due from Banks

Cash and due from banks include cash, deposits with other financial institutions, and federal funds sold. Net cash flows are reported for customer loan and deposit transactions, interest bearing deposits in other financial institutions, and federal funds purchased and repurchase agreements.

Securities

Securities

Securities are classified into three categories and accounted for as follows:

(i)Securities that we have the positive intent and ability to hold to maturity are classified as “held to maturity” and reported at amortized cost;

(ii)Securities that are bought and held principally for the purpose of selling them in the near future are classified as “trading securities” and reported at fair value. Unrealized gains and losses are recognized in earnings;

(iii)Securities not classified as held to maturity or trading securities are classified as “available for sale” and reported at fair value. Unrealized gains and losses are reported either in earnings or as a separate component of stockholders’ equity as accumulated other comprehensive income, net of income taxes.

All of the securities held by the Company are available for sale debt securities. For available for sale debt securities in an unrealized loss position, the Company first assesses whether it intends to sell, or it is more likely than not that it will be required to sell, the security before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the security’s amortized cost basis is written down to fair value through income. For available for sale debt securities that do not meet the aforementioned criteria, the Company evaluates whether the decline in fair value has resulted from credit losses or other factors. In making this assessment, management considers the extent to which fair value is less than amortized cost, any changes to the rating of the security by a rating agency, and adverse conditions specifically related to the security, among other factors. If this assessment indicates that a credit loss exists, the present value of cash flows expected to be collected from the security are compared to the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis, a credit loss is recorded and an allowance for credit losses is established, limited by the amount that the fair value is less than the amortized cost basis. Any impairment that has not been recorded through an allowance for credit losses is recognized in other comprehensive income.

Changes in the allowance for credit losses are recorded as a provision for or recovery of credit loss expense. Losses are charged against the allowance when management believes the risk of default of an available for sale security is confirmed or when either of the criteria regarding intent or requirement to sell is met.

Accrued interest receivable on available for sale debt securities totaled $3.3 million and $2.4 million at December 31, 2023 and 2022, respectively, and was excluded from the estimate of credit losses.

Loans Receivable

Loans receivable

Originated loans: Loans (other than SBA loans) are primarily originated by the Company with the intent to hold them for investment and are stated at the principal amount outstanding, net of deferred fees and costs. Net deferred fees and costs include nonrefundable loan fees, direct loan origination costs and initial direct costs. Net deferred fees or costs are recognized as an adjustment to interest income over the contractual life of the loans using the effective interest method or taken into income when the related loans are paid off or sold. The amortization of loan fees or costs is discontinued when a loan is placed on nonaccrual status. Interest income is recorded on an accrual basis in accordance with the terms of the respective loan and includes prepayment penalties. Equipment financing agreements are similar to commercial business loans in that the financing agreements are typically made on the basis of the borrower’s ability to make repayment from the cash flows of the borrower’s business.

Nonaccrual loans and nonperforming assets: Loans are placed on nonaccrual status when, in the opinion of management, the full timely collection of principal or interest is in doubt. Generally, the accrual of interest is discontinued when principal or interest payments become 90 or more days past due, unless management believes the loan is adequately collateralized and is in the process of collection. However, in certain instances, we may place a loan on nonaccrual status earlier, depending upon the individual circumstances surrounding the loan’s status. When an asset is placed on nonaccrual, previously accrued but unpaid interest is reversed against current interest income. Subsequent collections of cash are applied as principal reductions when received, except when the ultimate collectability of principal is probable, in which case interest payments are credited to income. Nonaccrual loans may be restored to accrual status when principal and interest become current and full repayment is expected, which generally occurs after payments of six months.

Nonperforming assets consist of loans on nonaccrual status, loans 90 days or more past due and still accruing interest, and OREO.

Loans Held for Sale

Loans held for sale

Loans originated, or transferred from loans receivable, and intended for sale in the secondary market are carried at the lower of aggregate cost or fair market value. Fair market value, if lower than cost, is determined based on valuations obtained from market participants or the value of underlying collateral, calculated individually. A valuation allowance is established if the market value of such loans is lower than their cost and net unrealized losses, if any, are recognized through a valuation allowance by charges to income. Origination fees on loans held for sale, net of certain costs of processing and closing the loans, are deferred until the time of sale and are included in the computation of the gain or loss from the sale of the related loans.

Allowance for Credit Losses

Allowance for credit losses

The Company calculates its allowance for credit losses by estimating expected credit losses on a collective basis for loans that share similar risk characteristics. Loans that do not share similar risk characteristics with other loans are evaluated for credit losses on an individual basis. The Company segments loans primarily by loan types, including the collateral type, loan purpose, contract term, amortization and payment structure, considering that the same type of loans share considerable similar risk characteristics. Depending on the type of the pool of financial assets with similar risk characteristics, the Company uses a DCF method, a PD/LGD method, or a WARM method to estimate expected credit losses.

The Company’s methodologies for estimating the allowance for credit losses consider available relevant information about the collectability of cash flows, including information about past events, current conditions, and reasonable and supportable forecasts. The methodologies apply historical loss information, adjusted for asset-specific characteristics, economic conditions at the measurement date, and forecasts about future economic conditions expected to exist through the contractual lives of the financial assets that were reasonable and supportable, to the identified pools of financial assets with similar risk characteristics. For all methodologies, the Company determined that four quarters represented a reasonable and supportable forecast period and revert to a historical loss rate over twelve quarters on a straight-line basis. The Company leverages quarterly economic projections from the Federal Open Market Committee and Moody’s Analytics to inform its loss driver forecasts over the four-quarter forecast period, utilizing the national unemployment rate forecast as the primary loss driver. The Company applies an expected loss ratio based on internal historical losses adjusted as appropriate for qualitative factors. The Company's evaluation of market, industry or business specific data, changes in the underlying portfolio composition, trends relating to credit quality, delinquencies, and reasonable and supportable forecasts of economic conditions informed the estimate of qualitative factors.

The Company estimated the allowance for credit losses on loans based on the underlying assets’ amortized cost basis. In the event that collection of principal becomes uncertain, the Company has policies in place to reverse accrued interest in a timely manner. Therefore, the Company has a policy to exclude accrued interest from the measurement of allowance for credit losses.

Expected credit losses are reflected in the allowance for credit losses through a charge to credit loss expense. When the Company deems all or a portion of a financial asset to be uncollectible, the appropriate amount is written off and the allowance for credit losses is reduced by the same amount. Subsequent recoveries, if any, are credited to the allowance for credit losses when received.

Credit Losses on Off-Balance Sheet Credit Exposures

Credit Losses on Off-Balance Sheet Credit Exposures

The Company has credit loss exposure for off-balance sheet lending commitments. The Company estimates expected credit losses for off-balance sheet exposures over the contractual period in which it is exposed to credit risk via a contractual obligation to extend credit, unless that obligation is unconditionally cancellable by the Company. The estimate includes consideration of the likelihood that funding will occur and an estimate of expected credit losses on commitments expected to be funded over its estimated life. Adjustments to the allowance for credit losses on off-balance sheet credit exposures is recognized as a provision for credit loss expense.

Individually Evaluated Loans

Individually Evaluated Loans

Individually evaluated loans are measured for expected credit losses based on the present value of expected cash flows discounted at the effective interest rate, the observable market price, or the fair value of collateral. The allowance for collateral dependent loans is calculated as the difference between the outstanding loan balance and the value of the collateral as determined by recent appraisals, less estimated costs to sell. The allowance for collateral dependent loans varies based on the collateral coverage of the loan at the time of the designation as nonperforming. We continue to monitor the collateral coverage on these loans on a quarterly basis, based on recent appraisals, and adjust the allowance accordingly.

Premises and Equipment

Premises and Equipment

Premises and equipment are stated at cost, less accumulated depreciation and amortization. Depreciation and amortization are computed on the straight-line method over the estimated useful lives of the various classes of assets. The ranges of useful lives for the principal classes of assets are as follows:

Buildings and improvements	10 to 30 years
Furniture and equipment	3 to 10 years
Leasehold improvements	Term of lease or useful life, whichever is shorter
Software	3 to 7 years

Impairment of Long-Lived Assets

Impairment of Long-Lived Assets

We review long-lived assets and certain identifiable intangibles for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future net undiscounted cash flows expected to be generated by the asset. If such assets are considered to be nonperforming, the individual amount to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell.

Other Real Estate Owned and Repossessed Personal Property

Other Real Estate Owned and Repossessed Personal Property

Other real estate owned includes real estate acquired through foreclosure and other real estate holdings that are not used in the operation of the Company’s business. Repossessed personal property consists of equipment repossessed on defaulted equipment financing agreements. Other real estate owned and repossessed personal property are recorded at the lower of cost or fair value less estimated costs to sell. Subsequent declines in fair value are recorded through expense.

Servicing Assets

Servicing Assets

Servicing assets are initially recorded at fair value, which represents the price paid, and amortized in proportion to, and over the period of, estimated net servicing income.

Servicing assets are recorded based on the present value of the contractually specified servicing fee, net of adequate compensation cost, for the estimated life of the loan, using a discount rate and a constant prepayment rate. Management periodically evaluates the servicing assets for impairment. Impairment, if it occurs, is recognized in a valuation allowance in the period of impairment.

Goodwill and Other Intangible Assets

Goodwill and Other Intangible Assets

Goodwill and other intangible assets consist of acquired intangible assets arising from acquisitions, including core deposit and third-party originator intangibles. The acquired intangible assets are initially measured at fair value and then are amortized on the straight-line method over their estimated useful lives while goodwill is not amortized.

Goodwill and other intangible assets are assessed for impairment annually or whenever events or changes in circumstances indicate the carrying amount may not be recoverable. The Company performed its annual impairment test and determined no impairment existed as of December 31, 2023.

Federal Home Loan Bank Stock

Federal Home Loan Bank Stock

The Bank is a member of the FHLB of San Francisco and is required to own common stock in the FHLB based upon the Bank’s balance of outstanding FHLB advances. FHLB stock is carried at cost and may be sold back to the FHLB at its carrying

value. FHLB stock is periodically evaluated for impairment based on ultimate recovery of par value. Both cash and stock dividends received are reported as dividend income.

Bank-Owned Life Insurance

Bank-Owned Life Insurance

We have purchased single premium life insurance policies (“bank-owned life insurance”) on certain current and former officers. The Bank and named beneficiaries of various current and former covered officers are the beneficiaries under each policy. In the event of the death of a covered officer, the Bank and named beneficiaries of the covered officer will receive the specified insurance benefit from the insurance carrier. Bank-owned life insurance is recorded at the amount that can be realized under the insurance contract at the balance sheet date, which is the cash surrender value adjusted for other charges or other amounts due, if any, that are probable at settlement. Under the Split Dollar Death Benefit Agreements, upon death of an active or former employee, the designated beneficiary(ies) are eligible to receive benefits, which in the aggregate, totaled $2.5 million at December 31, 2023.

Revenue Recognition

Revenue Recognition

ASU 2014-09, Revenue from Contracts with Customers (Topic 606), established a principles-based approach to recognizing revenue that applies to all contracts other than those covered by other authoritative U.S. GAAP guidance. Quantitative and qualitative disclosures regarding the nature, amount, timing and uncertainty of revenue and cash flows are also required. The standard’s core principle is that a company shall recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. In doing so, companies generally are required to use more judgment and make more estimates than under prior guidance. These may include identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation.

Since the guidance does not apply to revenue associated with financial instruments, including loans and securities that are accounted for under GAAP, the new guidance did not have an impact on revenue most closely associated with our financial instruments, including interest income and expense. The Company completed its overall assessment of revenue streams and review of related contracts potentially affected by the ASU, including revenue streams associated with our noninterest income. Based on this assessment, the Company concluded that ASU 2014-09 did not change the method in which the Company currently recognizes revenue for these revenue streams.

The Company's noninterest income primarily includes service charges on deposit accounts, trade finance and other service charges and fees, servicing income, bank-owned life insurance income and gains or losses on sale of SBA loans and securities. Based on our assessment of revenue streams related to the Company's noninterest income, we concluded that the Company's performance obligations for such revenue streams are typically satisfied as services are rendered. If applicable, the Company records contract liabilities, or deferred revenue, when payments from customers are received or due in advance of providing services to customers, and records contract assets when services are provided to customers before payment is received or before payment is due. The Company’s noninterest revenue streams are largely based on transactional activities and since the Company generally receives payments for its services during the period or at the time services are provided, there are no contract asset or receivable balances as of December 31, 2023 and 2022. Consideration is often received immediately or shortly after the Company satisfies its performance obligations and revenue is recognized.

The Company also completed its evaluation of certain costs related to these revenue streams to determine whether such costs should be presented as expenses or contra-revenue (i.e., gross versus net) and concluded that our Consolidated Statements of Income do not include any revenue streams that are impacted by such gross versus net provisions of the standard.

Income Tax

Income Tax

We provide for income taxes using the asset and liability method. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is provided when it is more likely than not that some portion or all of the deferred tax assets will not be realized.

The Company has invested in limited partnerships formed to develop and operate affordable housing units for lower income tenants throughout California. The partnership interests are accounted for utilizing the proportional amortization method with amortization expense and tax benefits recognized through the income tax provision.

Share-Based Compensation

Share-Based Compensation

The Company may provide awards of options, stock appreciation rights, restricted stock awards, restricted stock unit awards, shares granted as a bonus or in lieu of another award, dividend equivalents, other stock-based awards, or performance awards, together with any other right or interest to a participant. Plan participants may include executives and other employees, officers, directors, consultants and other persons who provide services to the Company or its related entities. All stock options granted under its stock-based benefit plans have an exercise price equal to the fair market value of the underlying common stock on the date of grant. Stock options granted generally vest based on three to five years of continuous service and expire 10 years from the date of grant. Restricted stock awards become fully vested after a certain number of years or after certain performance criteria are met. Performance stock units vest upon achievement of certain criteria and may have dividend equivalent rights associated with them. Hanmi Financial becomes entitled to an income tax deduction in an amount equal to the taxable income reported by the holders of the restricted shares when the restrictions are released and the shares are issued. Restricted shares are forfeited if officers and employees terminate employment prior to the lapsing of restrictions or if certain market condition criteria are not met. Forfeitures of restricted stock are treated as canceled shares.

Excess tax benefits from the exercise or vesting of share-based awards are included as a reduction in the provision for income tax expense in the period in which the exercise or vesting occurs.

Earnings per Share

Earnings per Share

Earnings per share (“EPS”) is calculated on both a basic and a diluted basis. Basic EPS excludes dilution and is computed by dividing income available to common stockholders by the weighted-average number of common shares outstanding for the period. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted from the issuance of common stock that then shared in earnings. For diluted EPS, the weighted-average number of common shares included the impact of unvested restricted stock under the treasury method.

Unvested restricted stock containing rights to non-forfeitable dividends are considered participating securities prior to vesting and have been included in the earnings allocation in computing basic and diluted EPS under the two-class method.

Treasury Stock

Treasury Stock

In January 2019, the Company's board of directors adopted a stock repurchase program, under which the Company may repurchase up to 5.0% of its then outstanding shares, or approximately 1.5 million shares of its common stock. The program permits shares to be repurchased in open market or private transactions, through block trades, and pursuant to any trading plan that may be adopted in accordance with Rule 10b5-1 of the Securities and Exchange Commission. The repurchase program may be suspended, terminated or modified at any time for any reason, including market conditions, the cost of repurchasing shares, the availability of alternative investment opportunities, liquidity, and other factors deemed appropriate. These factors may also affect the timing and amount of share repurchases. The repurchase program does not obligate the Company to purchase any particular number of shares. During the year ended December 31, 2023, there were 250,000 shares repurchased, for a total cost of $4.1 million.

We use the cost method of accounting for treasury stock. The cost method requires us to record the reacquisition cost of treasury stock as a deduction from stockholders’ equity on the Consolidated Balance Sheets.

Fair Value of Financial Instruments

Fair Value of Financial Instruments

Fair values of financial instruments are estimated using relevant market information and other assumptions, as more fully disclosed in a separate note. Fair value estimates involve uncertainties and matters of significant judgment regarding interest rates, credit risk, prepayments, and other factors, especially in the absence of broad markets for particular items. Changes in assumptions or in market conditions could significantly affect these estimates.

Recently Issued Accounting Standards

Accounting Standards Adopted in 2023

ASU 2022-02, Troubled Debt Restructurings and Vintage Disclosures (Topic 326): The FASB amended the accounting and disclosure requirements for expected credit losses by removing the recognition and measurement guidance on TDRs and enhancing disclosures pertaining to certain loan refinancings and restructurings by creditors made to borrowers experiencing financial difficulty. Additionally, this standard requires disclosure of current-period gross write-offs by year of origination for financing receivables.

The standard became effective for the Company for the interim and annual periods beginning on January 1, 2023. The adoption of ASU 2022-02 did not have a material effect on the Company’s operating results or financial condition.

ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting: In March 2020, the FASB issued ASU 2020-04 to ease the potential burden in accounting for reference rate reform. The amendments in ASU 2020-04 are elective and apply to all entities that have contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued due to reference rate reform.

ASU 2022-06, Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848: In March 2021, it was announced LIBOR would cease on June 30, 2023. Because the current relief in Topic 848 may not cover a period of time during which a significant number of modifications may take place, the amendments in this ASU will be deferred to December 31, 2024.

The new guidance on Topic 848 provided several optional expedients that reduce costs and complexity of accounting for reference rate reform, including measures to simplify or modify accounting issues resulting from reference rate reform for contract modifications, hedges, and debt securities.

The adoption of ASU 2020-04 did not have a material effect on the Company’s operating results or financial condition.

Recently Issued Accounting Standards Not Yet Effective

ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures: In December 2023, the FASB issued ASU 2023-09 to enhance the transparency and decision usefulness of income tax disclosures primarily related to income tax rate reconciliation and income taxes information. The amendments in ASU 2023-09 are effective for fiscal years beginning after December 15, 2024. The adoption of ASU 2023-09 is not expected to have material effect on the Company’s operating results or financial condition.

ASU 2023-07, Segment Reporting (Topic 280): Segment Reporting: In November 2023, the FASB issued ASU 2023-07 to provide updates that improve reportable segment disclosure requirements, primarily through enhanced disclosures on significant segment expenses. The amendments in ASU 2023-07 are effective for fiscal years beginning after December 15, 2024. The adoption of ASU 2023-07 is not expected to have material effect on the Company’s operating results or financial condition.

Fair Value Measurements

ASC 820, Fair Value Measurements and Disclosures, defines fair value, establishes a framework for measuring fair value including a three-level valuation hierarchy, and expands disclosures about fair value measurements. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The three-level fair value hierarchy requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The three levels of inputs that may be used to measure fair value are defined as follows:

•Level 1 - Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date.

•Level 2 - Significant other observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, and other inputs that are observable or can be corroborated by observable market data.

•Level 3 - Significant unobservable inputs that reflect a company’s own assumptions about the assumptions that market participants would use in pricing an asset or liability.

Fair value is used on a recurring basis for certain assets and liabilities in which fair value is the primary basis of accounting. Additionally, fair value is used on a non-recurring basis to evaluate assets or liabilities for impairment or for disclosure purposes.

We record securities available for sale at fair value on a recurring basis. Certain other assets, such as loans held for sale, nonperforming loans, OREO, bank-owned premises, and core deposit intangible, are recorded at fair value on a non-recurring basis. Non-recurring fair value measurements typically involve assets that are periodically evaluated for impairment and for which any impairment is recorded in the period in which the re-measurement is performed.

The following methods and assumptions were used to estimate the fair value of each class of financial instrument below:

Securities available for sale - The fair values of securities available for sale are determined by obtaining quoted prices on nationally recognized securities exchanges. If quoted prices are not available, fair values are measured using matrix pricing, which is a mathematical technique used widely in the industry to value debt securities without relying exclusively on quoted prices for the specific securities but rather by relying on the securities’ relationship to other benchmark quoted securities, or other model-based valuation techniques requiring observable inputs other than quoted prices such as yield curve, prepayment speeds, and default rates. Level 1 securities include U.S. Treasury securities and mutual funds that are traded on an active exchange or by dealers or brokers in active over-the-counter markets. The fair value of these securities is determined by quoted prices on an active exchange or over-the-counter market. Level 2 securities primarily include mortgage-backed securities, collateralized mortgage obligations, U.S. government agency securities and municipal bonds in markets that are active. In determining the fair value of the securities categorized as Level 2, we obtain reports from an investment accounting service provider detailing the fair value of each investment security held as of each reporting date. The investment accounting service provider obtains prices from nationally recognized pricing services. We review the prices obtained for reasonableness based on our understanding of the marketplace, and also consider any credit issues related to the bonds. As we have not made any adjustments to the market quotes provided to us and as they are based on observable market data, they have been categorized as Level 2 within the fair value hierarchy. Level 3 securities are instruments that are not traded in the market. Therefore, no observable market data for the instrument is available, which necessitates the use of significant unobservable inputs.

Derivatives – The fair values of derivatives are based on valuation models using observable market data as of the measurement date (Level 2). Our derivatives are traded in an over-the-counter market where quoted market prices are not always available. Therefore, the fair values of derivatives are determined using quantitative models that utilize multiple market inputs. The inputs will vary based on the type of derivative, but could include interest rates, prices and indices to generate continuous yield or pricing curves, prepayment rates, and volatility factors to value the position. The majority of market inputs are actively quoted and can be validated through external sources, including brokers, market transactions and third-party pricing services.

Loans held for sale – All loans held for sale are SBA loans carried at the lower of cost or fair value. Management obtains quotes, bids or pricing indication sheets on all, or, part of these loans directly from the purchasing financial institutions.

Premiums received, or, to be received on the quotes, bids or pricing indication sheets are indicative of the fact that cost is lower than fair value. At December 31, 2023 and 2022, the entire balance of SBA loans held for sale was recorded at its cost. We record SBA loans held for sale on a nonrecurring basis with Level 2 inputs.

Nonperforming loans – Nonaccrual loans receivable and performing restructured loans receivable are considered nonperforming for reporting purposes and are measured and recorded at fair value on a non-recurring basis. All nonperforming loans with a carrying balance over $250,000 are individually evaluated for the amount of expected credit losses, if any. Nonperforming loans with a carrying balance of $250,000 or less are evaluated collectively. However, from time to time, nonrecurring fair value adjustments to collateral dependent nonperforming loans are recorded based on either the current appraised value of the collateral, a Level 3 measurement, or management’s judgment and estimation of value reported on older appraisals that are then adjusted based on recent market trends, also a Level 3 measurement.

OREO – Fair value of OREO is based primarily on third-party appraisals, less costs to sell and result in a Level 3 classification of the inputs for determining fair value. Appraisals are required annually and may be updated more frequently as circumstances require and the fair value adjustments are made to OREO based on the updated appraised value of the property.

Servicing assets - On a quarterly basis, the Company utilizes a third-party service to evaluate servicing assets related to loans sold to unaffiliated parties with servicing retained, which results in a Level 3 classification. Servicing assets are assessed for impairment or increased obligation based on fair value at each reporting date.

Other repossessed assets – Fair value of equipment from leasing contracts is based primarily on a third-party valuation service, less costs to sell and result in a Level 3 classification of the inputs for determining fair value. Valuations are required at the time the asset is repossessed and may be subsequently updated periodically due to the Company’s short-term possession of the asset prior to its sale, or, as circumstances require and the fair value adjustments are made to the asset based on its value prior to sale.

The following table represents quantitative information about Level 3 fair value assumptions for assets measured at fair value on a non-recurring basis at December 31, 2023 and 2022:

	Fair Value		Valuation Techniques	Unobservable Input(s)	Range (Weighted Average)
	(dollars in thousands)
December 31, 2023
Collateral dependent loans:
Real estate loans:
Commercial property
Retail	$	1,530	Market approach	Adjustments to market data	5% to 20% / 15%	(1)
Hospitality		338	Market approach	Adjustments to market data	(30)% to 35% / (1)%	(1)
Other		305	Market approach	Adjustments to market data	(6)% to 1% / (2)%	(1)
Residential		1	Market approach	Adjustments to market data	(15)% to 3% / (6)%	(1)
Total real estate loans		2,174
Commercial and industrial loans		5,178	Market approach	Adjustments to market data	(20)% to 55% / (2)%	(1)
Total	$	7,352
Other real estate owned	$	117	Market approach	Adjustments to market data	(10)% to 5% / (2)%	(1)
Repossessed personal property		1,305	Market approach	Adjustments to market data		(2)
December 31, 2022
Collateral dependent loans:
Real estate loans:
Commercial property
Retail	$	1,930	Market approach	Adjustments to market data	5% to 25% / 16%	(1)
Other		256	Market approach	Adjustments to market data	(42)% to 3% / (24)%	(1)
Residential		508	Market approach	Adjustments to market data	(15)% to 3% / (1)%	(1)
Total real estate loans		2,694
Total	$	2,694
Other real estate owned	$	117	Market approach	Adjustments to market data	(20)% to 20% / (2)%	(1)
Repossessed personal property		467	Market approach	Adjustments to market data		(2)
Servicing assets		7,176	Market approach	Prepayment rate Discount rate	11% to 17% / 16% 22% to 25% / 22%	(3)

(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 adjustment represent decreases.

(2)The equipment is usually too low 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.

(3)Fair value is based on a valuation model using the present value of estimated future cash flows, prepayment speeds, default rates, and discount rates. Servicing assets are subsequently measured using the amortization method which requires servicing rights to be amortized into income over the period of the estimated future net servicing income of the underlying loans.

ASC 825, Financial Instruments, requires disclosure of the fair value of financial assets and financial liabilities, including those financial assets and financial liabilities that are not measured and reported at fair value on a recurring basis or non-recurring basis. The methodologies for estimating the fair value of financial assets and financial liabilities that are measured on a recurring basis or non-recurring basis are discussed above.

The estimated fair value of financial instruments has been determined by using available market information and appropriate valuation methodologies. However, considerable judgment is required to interpret market data in order to develop estimates of fair value. Accordingly, the estimates presented herein are not necessarily indicative of the amounts that we could realize in a current market exchange. The use of different market assumptions and/or estimation methodologies may have a material effect on the estimated fair value amounts.

Effective January 1, 2018, the Company adopted ASU 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities (Topic 825). This standard, among other provisions, requires public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes. Other than certain financial instruments for which we have concluded that the carrying amounts approximate fair value, the fair value estimates shown below are based on an exit price notion as of December 31, 2023 and 2022, as required by ASU 2016-01. The financial instruments for which we have concluded that the carrying amounts approximate fair value include: cash and due from banks, accrued interest receivable and payable, and noninterest-bearing deposits.

Derivative Instruments and Hedging Activities

Derivative Instruments and Hedging Activities

FASB ASC 815, Derivatives and Hedging (“ASC 815”), provides the disclosure requirements for derivatives and hedging activities with the intent to provide users of financial statements with an enhanced understanding of: (a) how and why an entity uses derivative instruments, (b) how the entity accounts for derivative instruments and related hedged items, and (c) how derivative instruments and related hedged items affect an entity’s financial position, financial performance, and cash flows. Further, qualitative disclosures are required that explain the Company’s objectives and strategies for using derivatives, as well as quantitative disclosures about the fair value of and gains and losses on derivative instruments, and disclosures about credit-risk-related contingent features in derivative instruments.

As required by ASC 815, the Company records all derivatives on the balance sheet at fair value. The accounting for changes in the fair value of derivatives depends on the intended use of the derivative, whether the Company has elected to designate a derivative in a hedging relationship and apply hedge accounting and whether the hedging relationship has satisfied the criteria necessary to apply hedge accounting. Derivatives designated and qualifying as a hedge of the exposure to changes in the fair value of an asset, liability, or firm commitment attributable to a particular risk, such as interest rate risk, are considered fair value hedges. Derivatives designated and qualifying as a hedge of the exposure to variability in expected future cash flows, or other types of forecasted transactions, are considered cash flow hedges. Derivatives may also be designated as hedges of the foreign currency exposure of a net investment in a foreign operation. Hedge accounting generally provides for the matching of the timing of gain or loss recognition on the hedging instrument with the recognition of the changes in the fair value of the hedged asset or liability that are attributable to the hedged risk in a fair value hedge or the earnings effect of the hedged forecasted transactions in a cash flow hedge. The Company may enter into derivative contracts that are intended to economically hedge a certain level of its risk, even though hedge accounting does not apply or the Company elects not to apply hedge accounting.

In accordance with the FASB’s fair value measurement guidance in ASU 2011-04, Fair Value Measurement (Topic 820), the Company made an accounting policy election to measure the credit risk of its derivative financial instruments that are subject to master netting agreements on a net basis by counterparty portfolio.

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Summary of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2023

Accounting Policies [Abstract]

Useful Lives for Principal Classes of Assets

The ranges of useful lives for the principal classes of assets are as follows:

Buildings and improvements	10 to 30 years
Furniture and equipment	3 to 10 years
Leasehold improvements	Term of lease or useful life, whichever is shorter
Software	3 to 7 years

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Securities (Tables)

12 Months Ended

Dec. 31, 2023

Investments, Debt and Equity Securities [Abstract]

Summary of Investment Securities Available for Sale

The following is a summary of securities available for sale as of December 31, 2023 and 2022:

			Gross		Gross			Estimated
	Amortized		Unrealized		Unrealized			Fair
	Cost		Gain		Loss			Value
	(in thousands)
December 31, 2023
U.S. Treasury securities	$	86,355	$	173	$	(1,040	)	$	85,488
U.S. government agency and sponsored agency obligations:
Mortgage-backed securities - residential		504,544		481		(62,697	)		442,328
Mortgage-backed securities - commercial		59,973		—		(11,982	)		47,991
Collateralized mortgage obligations		106,823		237		(9,649	)		97,411
Debt securities		132,215		—		(7,590	)		124,625
Total U.S. government agency and sponsored agency obligations		803,555		718		(91,918	)		712,355
Municipal bonds-tax exempt		77,121		—		(9,225	)		67,896
Total securities available for sale	$	967,031	$	891	$	(102,183	)	$	865,739
December 31, 2022
U.S. Treasury securities	$	49,690	$	—	$	(1,664	)	$	48,026
U.S. government agency and sponsored agency obligations:
Mortgage-backed securities - residential		540,590		63		(75,501	)		465,152
Mortgage-backed securities - commercial		61,799		—		(10,507	)		51,292
Collateralized mortgage obligations		98,236		—		(12,751	)		85,485
Debt securities		150,338		—		(11,839	)		138,499
Total U.S. government agency and sponsored agency obligations		850,963		63		(110,598	)		740,428
Municipal bonds-tax exempt		78,143		—		(12,759	)		65,384
Total securities available for sale	$	978,796	$	63	$	(125,021	)	$	853,838

Schedule of Amortized Cost and Estimated Fair Value of Investment Securities by Contractual Maturity

The amortized cost and estimated fair value of securities as of December 31, 2023, by contractual or expected maturity, are shown below. Collateralized mortgage obligations are included in the table shown below based on their expected maturities. All other securities are included based on their contractual maturities. Mortgage-backed securities included in the table below may mature before their contractual maturities.

	Available for Sale
	Amortized		Estimated
	Cost		Fair Value
	(in thousands)
Within one year	$	62,521	$	61,828
Over one year through five years		169,176		160,983
Over five years through ten years		83,720		77,608
Over ten years		651,614		565,320
Total	$	967,031	$	865,739

Summary of Debt Securities Available for Sale in an Unrealized Loss Position for Which an Allowance for Credit Losses Has Not Been Recorded

The following table summarizes debt securities available for sale in an unrealized loss position for which an allowance for credit losses has not been recorded at December 31, 2023 and 2022, aggregated by major security type and length of time in a continuous unrealized loss position:

	Holding Period
	Less than 12 Months							12 Months or More							Total
	Gross Unrealized Loss			Estimated Fair Value		Number of Securities		Gross Unrealized Loss			Estimated Fair Value		Number of Securities		Gross Unrealized Loss			Estimated Fair Value		Number of Securities
	(in thousands, except number of securities)
December 31, 2023
U.S. Treasury securities	$	(57	)	$	21,024		7	$	(983	)	$	32,449		11	$	(1,040	)	$	53,473		18
U.S. government agency and sponsored agency obligations:
Mortgage-backed securities - residential		(11	)		2,324		5		(62,686	)		411,417		118		(62,697	)		413,741		123
Mortgage-backed securities - commercial		—			—		—		(11,982	)		47,991		15		(11,982	)		47,991		15
Collateralized mortgage obligations		(38	)		7,074		2		(9,611	)		63,610		24		(9,649	)		70,684		26
Debt securities		—			—		—		(7,590	)		124,625		26		(7,590	)		124,625		26
Total U.S. government agency and sponsored agency obligations		(49	)		9,398		7		(91,869	)		647,643		183		(91,918	)		657,041		190
Municipal bonds-tax exempt		—			—		—		(9,225	)		67,896		19		(9,225	)		67,896		19
Total	$	(106	)	$	30,422		14	$	(102,077	)	$	747,988		213	$	(102,183	)	$	778,410		227
December 31, 2022
U.S. Treasury securities	$	(414	)	$	33,812		14	$	(1,250	)	$	14,215		4	$	(1,664	)	$	48,027		18
U.S. government agency and sponsored agency obligations:
Mortgage-backed securities - residential		(1,712	)		36,009		18		(73,789	)		424,302		105		(75,501	)		460,311		123
Mortgage-backed securities - commercial		(84	)		4,069		1		(10,423	)		47,221		14		(10,507	)		51,290		15
Collateralized mortgage obligations		(1,011	)		23,606		8		(11,740	)		61,879		20		(12,751	)		85,485		28
Debt securities		(1,103	)		31,714		8		(10,736	)		106,785		22		(11,839	)		138,499		30
Total U.S. government agency and sponsored agency obligations		(3,910	)		95,398		35		(106,688	)		640,187		161		(110,598	)		735,585		196
Municipal bonds-tax exempt		—			—		—		(12,759	)		65,385		19		(12,759	)		65,385		19
Total	$	(4,324	)	$	129,210		49	$	(120,697	)	$	719,787		184	$	(125,021	)	$	848,997		233

Realized Gains and Losses on Sales of Investment Securities

Realized gains and losses on sales of securities and proceeds from sales of securities were as follows for the periods indicated:

	Year Ended December 31,
	2023			2022		2021
	(in thousands)
Gross realized gains on sales of securities	$	—		$	—	$	99
Gross realized losses on sales of securities		(1,871	)		—		(598	)
Net realized gains (losses) on sales of securities	$	(1,871	)	$	—	$	(499	)
Proceeds from sales of securities	$	8,149			—		55,884

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Loans Receivable (Tables)

12 Months Ended

Dec. 31, 2023

Receivables [Abstract]

Loans Receivable

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

	December 31,
	2023			2022
	(in thousands)
Real estate loans:
Commercial property
Retail	$	1,107,360		$	1,023,608
Hospitality		740,519			646,893
Office		574,981			499,946
Other (1)		1,366,534			1,553,729
Total commercial property loans		3,789,394			3,724,176
Construction		100,345			109,205
Residential (2)		962,661			734,472
Total real estate loans		4,852,400			4,567,853
Commercial and industrial loans (3)		747,819			804,492
Equipment financing agreements		582,215			594,788
Loans receivable		6,182,434			5,967,133
Allowance for credit losses		(69,462	)		(71,523	)
Loans receivable, net	$	6,112,972		$	5,895,610

(1)Includes, among other property types, mixed-use, gas station, apartment, industrial, faith-based facilities and warehouse; the remaining real estate categories represent less than 1% of the Bank's total loans receivable.

(2)Includes $1.9 million and $2.4 million of home equity loans and lines, and $4.5 million and $4.6 million of personal loans at December 31, 2023 and 2022, respectively.

(3)At December 31, 2023 and 2022, PPP loans were $0.2 million and $0.9 million, respectively.

Information on SBA Loans Held for Sale

The following table details the information on SBA loans held for sale by portfolio segment for the years ended December 31, 2023 and 2022:

	Real Estate			Commercial and Industrial			Total
	(in thousands)
December 31, 2023
Balance at beginning of period	$	3,775		$	4,268		$	8,043
Originations and transfers		65,705			39,293			104,998
Sales		(60,611	)		(39,903	)		(100,514	)
Principal paydowns and amortization		(77	)		(437	)		(514	)
Balance at end of period	$	8,792		$	3,221		$	12,013
December 31, 2022
Balance at beginning of period	$	6,954		$	6,388		$	13,342
Originations and transfers		99,547			51,278			150,825
Sales		(102,720	)		(53,389	)		(156,109	)
Principal paydowns and amortization		(6	)		(9	)		(15	)
Balance at end of period	$	3,775		$	4,268		$	8,043

Loans Purchased by Portfolio Segment

The following table presents loans purchased by portfolio segment for the years ended December 31, 2023 and 2022:

	Commercial Real Estate		Commercial and Industrial		Residential Real Estate		Total
	(in thousands)
2023	$	—	$	9,657	$	—	$	9,657
2022	$	11,030	$	180	$	18,715	$	29,925

Allowance for Credit Losses by Portfolio Segment

The following table details the information on the allowance for credit losses by portfolio segment for the years ended December 31, 2023, 2022 and 2021:

	Real Estate			Commercial and Industrial			Equipment Financing Agreements			Total
	(in thousands)
December 31, 2023
Allowance for credit losses:
Beginning balance	$	44,026		$	15,267		$	12,230		$	71,523
Charge-offs		(627	)		(6,657	)		(8,806	)		(16,090	)
Recoveries		312			7,089			1,646			9,047
Provision (recovery) for credit losses		1,788			(5,442	)		8,636			4,982
Ending balance	$	45,499		$	10,257		$	13,706		$	69,462
December 31, 2022
Allowance for credit losses:
Beginning balance	$	48,890		$	12,418		$	11,249		$	72,557
Charge-offs		(1,886	)		(524	)		(2,312	)		(4,722	)
Recoveries		848			1,178			1,322			3,348
Provision (recovery) for credit losses		(3,826	)		2,195			1,971			340
Ending balance	$	44,026		$	15,267		$	12,230		$	71,523
December 31, 2021
Allowance for credit losses:
Beginning balance	$	51,876		$	21,410		$	17,140		$	90,426
Charge-offs		(1,427	)		(546	)		(4,400	)		(6,373	)
Recoveries		10,807			897			946			12,650
Provision (recovery) for credit losses		(12,366	)		(9,343	)		(2,437	)		(24,146	)
Ending balance	$	48,890		$	12,418		$	11,249		$	72,557

The table below presents the allowance for credit losses by portfolio segment as a percentage of the total allowance for credit losses and loans by portfolio segment as a percentage of the aggregate investment of loans receivable for the years ended December 31, 2023 and 2022:

	December 31, 2023										December 31, 2022
	Allowance Amount		Percentage of Total Allowance			Total Loans		Percentage of Total Loans			Allowance Amount		Percentage of Total Allowance			Total Loans		Percentage of Total Loans
	(dollars in thousands)
Real estate loans:
Commercial property
Retail	$	10,264		14.8	%	$	1,107,360		17.9	%	$	7,872		11.0	%	$	1,023,608		17.2	%
Hospitality		15,534		22.4			740,519		12.0			13,407		18.7			646,893		10.8
Office		3,024		4.4			574,981		9.3			2,293		3.2			499,946		8.4
Other		8,663		12.4			1,366,534		22.1			13,056		18.3			1,553,729		26.0
Total commercial property loans		37,485		54.0			3,789,394		61.3			36,628		51.2			3,724,176		62.4
Construction		2,756		4.0			100,345		1.6			4,022		5.7			109,205		1.8
Residential		5,258		7.5			962,661		15.6			3,376		4.7			734,472		12.4
Total real estate loans		45,499		65.5			4,852,400		78.5			44,026		61.6			4,567,853		76.6
Commercial and industrial loans		10,257		14.8			747,819		12.1			15,267		21.3			804,492		13.4
Equipment financing agreements		13,706		19.7			582,215		9.4			12,230		17.1			594,788		10.0
Total	$	69,462		100.0	%	$	6,182,434		100.0	%	$	71,523		100.0	%	$	5,967,133		100.0	%

Summary of Amortized Cost Basis of Collateral Dependent Loans By Class of Loans

The following table represents the amortized cost basis of collateral dependent loans by class of loans as of December 31, 2023 and 2022, for which repayment is expected to be obtained through the sale of the underlying collateral and any collateral dependent loans that are still accruing but are considered nonperforming.

	December 31,
	2023		2022
	(in thousands)
Real estate loans:
Commercial property
Retail	$	1,530	$	1,930
Hospitality		338		—
Other (1)		305		256
Total commercial property loans		2,173		2,186
Residential		1		508
Total real estate loans		2,174		2,694
Commercial and industrial loans		5,178		—
Total	$	7,352	$	2,694

(1)Includes, among other property types, mixed-use, gas station, apartment, industrial, faith-based facilities and warehouse; the remaining real estate categories represent less than one percent of the Bank's total loans receivable.

Credit Quality of Loan Portfolio

Loans by Vintage Year and Risk Rating

	Term Loans
	Amortized Cost Basis by Origination Year (1)
	2023		2022		2021			2020		2019		Prior			Revolving Loans Amortized Cost Basis			Total
	(in thousands)
December 31, 2023
Real estate loans:
Commercial property
Risk Rating
Pass / Pass Watch	$	683,819	$	986,822	$	858,821		$	572,950	$	378,067	$	238,400		$	30,236		$	3,749,115
Special Mention		4,400		3,997		3,271			5,670		711		2,310			1,406			21,765
Classified		3,065		1,080		4,899			—		5,578		3,892			—			18,514
Total commercial property		691,284		991,899		866,991			578,620		384,356		244,602			31,642			3,789,394
YTD gross charge-offs		—		—		—			411		—		216			—			627
YTD net charge-offs (recoveries)		—		—		—			403		—		(81	)		—			322
Construction
Risk Rating
Pass / Pass Watch		72,039		—		—			—		—		—			—			72,039
Special Mention		—		—		28,306			—		—		—			—			28,306
Classified		—		—		—			—		—		—			—			—
Total construction		72,039		—		28,306			—		—		—			—			100,345
YTD gross charge-offs		—		—		—			—		—		—			—			—
YTD net charge-offs (recoveries)		—		—		—			—		—		—			—			—
Residential
Risk Rating
Pass / Pass Watch		290,196		375,712		158,618			12,656		217		119,736			5,025			962,160
Special Mention		—		—		—			—		—		—			500			500
Classified		—		—		—			—		—		1			—			1
Total residential		290,196		375,712		158,618			12,656		217		119,737			5,525			962,661
YTD gross charge-offs		—		—		—			—		—		—			—			—
YTD net charge-offs (recoveries)		—		—		—			—		—		(7	)		—			(7	)
Total real estate loans
Risk Rating
Pass / Pass Watch		1,046,054		1,362,534		1,017,439			585,606		378,284		358,136			35,261			4,783,314
Special Mention		4,400		3,997		31,577			5,670		711		2,310			1,906			50,571
Classified		3,065		1,080		4,899			—		5,578		3,893			—			18,515
Total real estate loans		1,053,519		1,367,611		1,053,915			591,276		384,573		364,339			37,167			4,852,400
YTD gross charge-offs		—		—		—			411		—		216			—			627
YTD net charge-offs (recoveries)		—		—		—			403		—		(88	)		—			315
Commercial and industrial loans:
Risk Rating
Pass / Pass Watch		177,864		169,209		84,198			31,348		9,971		12,920			242,044			727,554
Special Mention		—		14,578		—			102		—		65			(1	)		14,744
Classified		329		—		—			—		79		174			4,939			5,521
Total commercial and industrial loans		178,193		183,787		84,198			31,450		10,050		13,159			246,982			747,819
YTD gross charge-offs		—		17		—			—		110		410			6,120			6,657
YTD net charge-offs (recoveries)		—		5		(7	)		—		101		(6,621	)		6,090			(432	)
Equipment financing agreements:
Risk Rating
Pass / Pass Watch		215,670		211,228		101,622			24,340		18,832		3,192			—			574,884
Special Mention		—		—		—			—		—		—			—			—
Classified		392		4,171		1,945			365		401		57			—			7,331
Total equipment financing agreements		216,062		215,399		103,567			24,705		19,233		3,249			—			582,215
YTD gross charge-offs		178		3,944		3,267			386		799		232			—			8,806
YTD net charge-offs (recoveries)		178		3,744		2,858			244		250		(114	)		—			7,160
Total loans receivable:
Risk Rating
Pass / Pass Watch		1,439,588		1,742,971		1,203,259			641,294		407,087		374,248			277,305			6,085,752
Special Mention		4,400		18,575		31,577			5,772		711		2,375			1,905			65,315
Classified		3,786		5,251		6,844			365		6,058		4,124			4,939			31,367
Total loans receivable	$	1,447,774	$	1,766,797	$	1,241,680		$	647,431	$	413,856	$	380,747		$	284,149		$	6,182,434
YTD gross charge-offs		178		3,961		3,267			797		909		858			6,120			16,090
YTD net charge-offs (recoveries)		178		3,749		2,851			647		351		(6,823	)		6,090			7,043

(1)Includes extensions, renewals, or modifications of credit contracts, which consist of a new credit decision

	Term Loans
	Amortized Cost Basis by Origination Year (1)
	2022		2021		2020		2019		2018		Prior		Revolving Loans Amortized Cost Basis		Total
	(in thousands)
December 31, 2022
Real estate loans:
Commercial property
Risk Rating
Pass / Pass Watch	$	1,184,361	$	901,029	$	600,740	$	404,786	$	301,950	$	207,861	$	50,877	$	3,651,604
Special Mention		847		13,384		5,857		7,115		—		6,080		1,701		34,984
Classified		—		—		412		4,312		12,304		20,560		—		37,588
Total commercial property		1,185,208		914,413		607,009		416,213		314,254		234,501		52,578		3,724,176
Construction
Risk Rating
Pass / Pass Watch		41,662		67,543		—		—		—		—		—		109,205
Special Mention		—		—		—		—		—		—		—		—
Classified		—		—		—		—		—		—		—		—
Total construction		41,662		67,543		—		—		—		—		—		109,205
Residential
Risk Rating
Pass / Pass Watch		405,975		173,236		13,102		232		731		134,766		5,422		733,464
Special Mention		—		—		—		—		—		—		500		500
Classified		12		—		—		—		—		496		—		508
Total residential		405,987		173,236		13,102		232		731		135,262		5,922		734,472
Total real estate loans
Risk Rating
Pass / Pass Watch		1,631,998		1,141,808		613,842		405,018		302,681		342,627		56,299		4,494,273
Special Mention		847		13,384		5,857		7,115		—		6,080		2,201		35,484
Classified		12		—		412		4,312		12,304		21,056		—		38,096
Total real estate loans		1,632,857		1,155,192		620,111		416,445		314,985		369,763		58,500		4,567,853
Commercial and industrial loans:
Risk Rating
Pass / Pass Watch		368,778		100,537		39,577		24,117		7,342		12,282		205,951		758,584
Special Mention		—		9,285		—		—		29		102		34,113		43,529
Classified		—		—		171		1,097		81		391		639		2,379
Total commercial and industrial loans		368,778		109,822		39,748		25,214		7,452		12,775		240,703		804,492
Equipment financing agreements:
Risk Rating
Pass / Pass Watch		305,249		165,313		46,970		52,133		17,608		1,798		—		589,071
Special Mention		—		—		—		—		—		—		—		—
Classified		630		2,542		311		1,581		565		88		—		5,717
Total equipment financing agreements		305,879		167,855		47,281		53,714		18,173		1,886		—		594,788
Total loans receivable:
Risk Rating
Pass / Pass Watch		2,306,025		1,407,658		700,389		481,268		327,631		356,707		262,250		5,841,928
Special Mention		847		22,669		5,857		7,115		29		6,182		36,314		79,013
Classified		642		2,542		894		6,990		12,950		21,535		639		46,192
Total loans receivable	$	2,307,514	$	1,432,869	$	707,140	$	495,373	$	340,610	$	384,424	$	299,203	$	5,967,133

(1)Includes extensions, renewals, or modifications of credit contracts, which consist of a new credit decision

Loans by Vintage Year and Payment Performance

	Term Loans
	Amortized Cost Basis by Origination Year (1)
	2023		2022		2021			2020		2019		Prior			Revolving Loans Amortized Cost Basis		Total
	(in thousands)
December 31, 2023
Real estate loans:
Commercial property
Payment performance
Performing	$	689,449	$	991,899	$	866,841		$	578,620	$	384,275	$	243,819		$	31,642	$	3,786,545
Nonperforming		1,835		—		150			—		81		783			—		2,849
Total commercial property		691,284		991,899		866,991			578,620		384,356		244,602			31,642		3,789,394
YTD gross charge-offs		—		—		—			411		—		216			—		627
YTD net charge-offs (recoveries)		—		—		—			403		—		(81	)		—		322
Construction
Payment performance
Performing		72,039		—		28,306			—		—		—			—		100,345
Nonperforming		—		—		—			—		—		—			—		—
Total construction		72,039		—		28,306			—		—		—			—		100,345
YTD gross charge-offs		—		—		—			—		—		—			—		—
YTD net charge-offs (recoveries)		—		—		—			—		—		—			—		—
Residential
Payment performance
Performing		290,196		375,712		158,618			12,656		217		119,736			5,525		962,660
Nonperforming		—		—		—			—		—		1			—		1
Total residential		290,196		375,712		158,618			12,656		217		119,737			5,525		962,661
YTD gross charge-offs		—		—		—			—		—		—			—		—
YTD net charge-offs (recoveries)		—		—		—			—		—		(7	)		—		(7	)
Total real estate loans
Payment performance
Performing		1,051,684		1,367,611		1,053,765			591,276		384,492		363,555			37,167		4,849,550
Nonperforming		1,835		—		150			—		81		784			—		2,850
Total real estate loans		1,053,519		1,367,611		1,053,915			591,276		384,573		364,339			37,167		4,852,400
YTD gross charge-offs		—		—		—			411		—		216			—		627
YTD net charge-offs (recoveries)		—		—		—			403		—		(88	)		—		315
Commercial and industrial loans:
Payment performance
Performing		177,864		183,787		84,198			31,415		10,050		13,066			242,134		742,514
Nonperforming		329		—		—			35		—		93			4,848		5,305
Total commercial and industrial loans		178,193		183,787		84,198			31,450		10,050		13,159			246,982		747,819
YTD gross charge-offs		—		17		—			—		110		410			6,120		6,657
YTD net charge-offs (recoveries)		—		5		(7	)		—		101		(6,621	)		6,090		(432	)
Equipment financing agreements:
Payment performance
Performing		215,670		211,228		101,622			24,340		18,844		3,192			—		574,896
Nonperforming		392		4,171		1,945			365		389		57			—		7,319
Total equipment financing agreements		216,062		215,399		103,567			24,705		19,233		3,249			—		582,215
YTD gross charge-offs		178		3,944		3,267			386		799		232			—		8,806
YTD net charge-offs (recoveries)		178		3,744		2,858			244		250		(114	)		—		7,160
Total loans receivable:
Payment performance
Performing		1,445,218		1,762,626		1,239,585			647,031		413,386		379,813			279,301		6,166,960
Nonperforming		2,556		4,171		2,095			400		470		934			4,848		15,474
Total loans receivable	$	1,447,774	$	1,766,797	$	1,241,680		$	647,431	$	413,856	$	380,747		$	284,149	$	6,182,434
YTD gross charge-offs		178		3,961		3,267			797		909		858			6,120		16,090
YTD net charge-offs (recoveries)		178		3,749		2,851			647		351		(6,823	)		6,090		7,043

(1)Includes extensions, renewals, or modifications of credit contracts, which consist of a new credit decision

	Term Loans
	Amortized Cost Basis by Origination Year (1)
	2022		2021		2020		2019		2018		Prior		Revolving Loans Amortized Cost Basis		Total
	(in thousands)
December 31, 2022
Real estate loans:
Commercial property
Payment performance
Performing	$	1,185,208	$	914,413	$	606,597	$	416,213	$	312,324	$	233,643	$	52,578	$	3,720,976
Nonperforming		—		—		412		—		1,930		858				3,200
Total commercial property		1,185,208		914,413		607,009		416,213		314,254		234,501		52,578		3,724,176
Construction
Payment performance
Performing		41,662		67,543		—		—		—		—		—		109,205
Nonperforming		—		—		—		—		—		—		—		—
Total construction		41,662		67,543		—		—		—		—		—		109,205
Residential
Payment performance
Performing		405,975		173,236		13,102		232		731		134,766		5,922		733,964
Nonperforming		12		—		—		—		—		496		—		508
Total residential		405,987		173,236		13,102		232		731		135,262		5,922		734,472
Total real estate loans
Payment performance
Performing		1,632,845		1,155,192		619,699		416,445		313,055		368,409		58,500		4,564,145
Nonperforming		12		—		412		—		1,930		1,354		—		3,708
Total real estate loans		1,632,857		1,155,192		620,111		416,445		314,985		369,763		58,500		4,567,853
Commercial and industrial loans:
Payment performance
Performing		368,778		109,822		39,577		25,199		7,452		12,539		240,703		804,070
Nonperforming		—		—		171		15		—		236		—		422
Total commercial and industrial loans		368,778		109,822		39,748		25,214		7,452		12,775		240,703		804,492
Equipment financing agreements:
Payment performance
Performing		305,249		165,313		46,970		52,133		17,608		1,798		—		589,071
Nonperforming		630		2,542		311		1,581		565		88		—		5,717
Total equipment financing agreements		305,879		167,855		47,281		53,714		18,173		1,886		—		594,788
Total loans receivable:
Payment performance
Performing		2,306,872		1,430,327		706,246		493,777		338,115		382,746		299,203		5,957,286
Nonperforming		642		2,542		894		1,596		2,495		1,678		—		9,847
Total loans receivable	$	2,307,514	$	1,432,869	$	707,140	$	495,373	$	340,610	$	384,424	$	299,203	$	5,967,133

(1)Includes extensions, renewals, or modifications of credit contracts, which consist of a new credit decision

Schedule of Amortized Cost Basis of Loans on Nonaccrual Status and Loans Past Due 90 Days and Still Accruing

The following tables represent the amortized cost basis of loans on nonaccrual status and loans past due 90 days and still accruing as of December 31, 2023 and 2022.

	December 31, 2023
	Nonaccrual Loans With No Allowance for Credit Losses		Nonaccrual Loans With Allowance for Credit Losses		Loans Past Due 90 Days Still Accruing		Total Nonperforming Loans
	(in thousands)
Real estate loans:
Commercial property
Retail	$	1,717	$	321	$	—	$	2,038
Hospitality		338		150		—		488
Office		—		—		—		—
Other		305		18		—		323
Total commercial property loans		2,360		489		—		2,849
Residential		1		—		—		1
Total real estate loans		2,361		489		—		2,850
Commercial and industrial loans		5,213		92		—		5,305
Equipment financing agreements		570		6,749		—		7,319
Total	$	8,144	$	7,330	$	—	$	15,474
	December 31, 2022
	Nonaccrual Loans With No Allowance for Credit Losses		Nonaccrual Loans With Allowance for Credit Losses		Loans Past Due 90 Days Still Accruing		Total Nonperforming Loans
	(in thousands)
Real estate loans:
Commercial property
Retail	$	1,929	$	—	$	—	$	1,929
Other		540		731		—		1,271
Total commercial property loans		2,469		731		—		3,200
Residential		508		—		—		508
Total real estate loans		2,977		731		—		3,708
Commercial and industrial loans		—		422		—		422
Equipment financing agreements		215		5,501		—		5,716
Total	$	3,192	$	6,654	$	—	$	9,846

The Company recognized $0.2 million, $46,000 and $0.7 million of interest income on nonaccrual loans for the twelve months ended December 31, 2023, 2022 and 2021, respectively.

Analysis of Past Due Loans, Disaggregated by Loan Class

The following is an aging analysis of loans, disaggregated by loan class, as of the dates indicated:

	30-59 Days Past Due		60-89 Days Past Due		90 Days or More Past Due		Total Past Due		Current		Total
	(in thousands)
December 31, 2023
Real estate loans:
Commercial property
Retail	$	632	$	—	$	—	$	632	$	1,106,728	$	1,107,360
Hospitality		—		150		22		172		740,347		740,519
Office		—		—		—		—		574,981		574,981
Other		592		—		—		592		1,365,942		1,366,534
Total commercial property loans		1,224		150		22		1,396		3,787,998		3,789,394
Construction		—		—		—		—		100,345		100,345
Residential		521		336		1		858		961,803		962,661
Total real estate loans		1,745		486		23		2,254		4,850,146		4,852,400
Commercial and industrial loans		76		120		5,178		5,374		742,445		747,819
Equipment financing agreements		7,138		2,134		4,551		13,823		568,392		582,215
Total loans receivable	$	8,959	$	2,740	$	9,752	$	21,451	$	6,160,983	$	6,182,434
December 31, 2022
Real estate loans:
Commercial property
Retail	$	—	$	—	$	—	$	—	$	1,023,608	$	1,023,608
Hospitality		—		—		—		—		646,893		646,893
Office		—		—		—		—		499,946		499,946
Other		—		494		—		494		1,553,235		1,553,729
Total commercial property loans		—		494		—		494		3,723,682		3,724,176
Construction		—		—		—		—		109,205		109,205
Residential		313		804		7		1,124		733,348		734,472
Total real estate loans		313		1,298		7		1,618		4,566,235		4,567,853
Commercial and industrial loans		77		79		—		156		804,336		804,492
Equipment financing agreements		5,825		1,271		2,949		10,045		584,743		594,788
Total loans receivable	$	6,215	$	2,648	$	2,956	$	11,819	$	5,955,314	$	5,967,133

Non-Performing Assets

The following table details nonperforming assets as of the dates indicated:

	As of December 31,
	2023		2022
	(in thousands)
Nonaccrual loans	$	15,474	$	9,846
Loans receivable 90 days or more past due and still accruing		—		—
Total nonperforming loans receivable		15,474		9,846
Other real estate owned ("OREO")		117		117
Total nonperforming assets	$	15,591	$	9,963

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Servicing Assets (Tables)

12 Months Ended

Dec. 31, 2023

Transfers and Servicing [Abstract]

Summary of Changes in Servicing Assets

The changes in servicing assets for the years ended December 31, 2023 and 2022 were as follows:

	As of December 31,
	2023			2022
	(in thousands)
Balance at beginning of period	$	7,176		$	7,080
Additions related to sale of SBA loans		1,965			3,153
Amortization		(2,456	)		(2,672	)
Change in valuation allowance		385			(385	)
Balance at end of period	$	7,070		$	7,176

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Premises and Equipment (Tables)

12 Months Ended

Dec. 31, 2023

Property, Plant and Equipment [Abstract]

Summary of Major Components of Premises and Equipment

The following is a summary of the major components of premises and equipment:

	As of December 31,
	2023			2022
	(in thousands)
Land	$	5,319		$	6,850
Building and improvements		9,420			12,643
Furniture and equipment		31,014			30,341
Leasehold improvements		20,130			18,246
Fixed assets in process		1,059			32
		66,942			68,112
Accumulated depreciation and amortization		(44,983	)		(45,262	)
Total premises and equipment, net	$	21,959		$	22,850

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Leases (Tables)

12 Months Ended

Dec. 31, 2023

Leases [Abstract]

Future Minimum Annual Rental Commitments Under Non-Cancelable Operating Leases

At December 31, 2023, future minimum annual rental commitments under these non-cancelable operating leases, with initial or remaining terms of one year or more, were as follows:

	Amount
	(in thousands)
2024	$	8,861
2025		8,052
2026		6,898
2027		6,576
2028		6,145
Thereafter		14,927
Remaining lease commitments		51,459
Interest		(5,057	)
Present value of lease liability	$	46,402

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Goodwill and Other Intangibles (Tables)

12 Months Ended

Dec. 31, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

Summary of Goodwill and Other Intangible Assets

The Company's intangible assets were as follows for the periods indicated:

		December 31, 2023							December 31, 2022
	Amortization Period	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
		(in thousands)
Core deposit intangible	10 years	$	2,213	$	(2,145	)	$	68	$	2,213	$	(2,031	)	$	182
Third-party originators intangible	7 years		483		(483	)		—		483		(471	)		12
Goodwill	N/A		11,031		—			11,031		11,031		—			11,031
Total intangible assets		$	13,727	$	(2,628	)	$	11,099	$	13,727	$	(2,502	)	$	11,225

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Deposits (Tables)

12 Months Ended

Dec. 31, 2023

Deposits [Abstract]

Scheduled Maturities of Time Deposits

At December 31, 2023, the scheduled maturities of time deposits were as follows:

Year Ending December 31,	Time Deposits More Than $250,000		Other Time Deposits		Total
	(in thousands)
2024	$	995,830	$	1,444,509	$	2,440,339
2025		3,928		6,205		10,133
2026		263		3,142		3,405
2027		—		572		572
2028 & thereafter		—		418		418
Total	$	1,000,021	$	1,454,846	$	2,454,867

Summary of Interest Expense on Deposits

A summary of interest expense on deposits was as follows for the periods indicated:

	Year Ended December 31,
	2023		2022		2021
	(in thousands)
Demand: interest-bearing	$	117	$	100	$	61
Money market and savings		44,066		12,753		5,199
Time deposits more than $250,000		42,762		4,457		726
Other time deposits		47,763		8,628		5,669
Total interest expense on deposits	$	134,708	$	25,938	$	11,655

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Borrowings (Tables)

12 Months Ended

Dec. 31, 2023

Debt Disclosure [Abstract]

Schedule of Borrowings

The following is a summary of contractual maturities of FHLB advances:

	As of December 31,
	2023					2022
	Outstanding Balance		Weighted Average Rate			Outstanding Balance		Weighted Average Rate
	(dollars in thousands)
Open advances	$	212,500		5.70	%	$	250,000		4.65	%
Advances due within 12 months		37,500		0.40			50,000		0.97
Advances due over 12 months through 24 months		12,500		1.90			37,500		0.40
Advances due over 24 months through 36 months		62,500		4.37			12,500		1.90
Outstanding advances	$	325,000		4.69	%	$	350,000		3.57	%

Summary of Financial Data Pertaining to Federal Home Loan Bank Advances

The following is financial data pertaining to FHLB advances:

	As of December 31,
	2023			2022			2021
	(dollars in thousands)
Weighted-average interest rate at end of year		4.69	%		3.57	%		1.05	%
Weighted-average interest rate during the year		3.48	%		1.52	%		1.17	%
Average balance of FHLB advances	$	197,390		$	148,027		$	145,277
Maximum amount outstanding at any month-end	$	450,000		$	350,000		$	162,500

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Income Taxes (Tables)

12 Months Ended

Dec. 31, 2023

Income Tax Disclosure [Abstract]

Reconciliation of Unrecognized Tax Benefits

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:

	Year Ended December 31,
	2023		2022		2021
	(in thousands)
Unrecognized tax benefits at beginning of year	$	258	$	258	$	—
Gross increase for new tax positions		—		—		258
Unrecognized tax benefits at end of year	$	258	$	258	$	258

Summary of Provision for Income Taxes

A summary of the provision for income taxes was as follows:

	Year Ended December 31,
	2023			2022		2021
	(in thousands)
Current expense:
Federal	$	26,336		$	1,310	$	21,805
State		13,610			304		10,901
Total current expense		39,946			1,614		32,706
Deferred expense (benefit):
Federal	$	(4,980	)		27,674		4,914
State		(426	)		10,045		(803	)
Total deferred expense		(5,406	)		37,719		4,111
Income tax expense	$	34,540		$	39,333	$	36,817

Summary of Deferred Tax Assets and Liabilities

Deferred tax assets and liabilities were as follows:

	Year Ended December 31,
	2023			2022			2021
	(in thousands)
Deferred tax assets:
Provision for credit losses	$	20,745		$	21,626		$	21,671
Purchase accounting		1,467			2,149			3,360
Net operating loss carryforward		13,712			14,590			15,316
Unrealized loss on securities available for sale		29,120			35,973			3,421
Lease liability		13,729			13,029			14,712
Tax credits		—			1,711			—
State taxes		2,741			54			2,318
Other		4,283			3,793			4,032
Total deferred tax assets		85,797			92,925			64,830
Deferred tax liabilities:
Mark to market		(32,992	)		(38,916	)		(3,531	)
Depreciation		(333	)		(1,292	)		(1,292	)
Leases - right of use assets		(12,592	)		(11,932	)		(13,738	)
Other		(2,790	)		(2,836	)		(2,650	)
Total deferred tax liabilities		(48,707	)		(54,976	)		(21,211	)
Valuation allowance		(1,864	)		(1,276	)		(1,644	)
Net deferred tax assets	$	35,226		$	36,673		$	41,975

Reconciliation between Federal Statutory Income Tax Rate and Effective Tax Rate

Reconciliation between the federal statutory income tax rate and the effective tax rate is shown in the following table:

	Year Ended December 31,
	2023			2022			2021
Federal statutory income tax rate		21.00	%		21.00	%		21.00	%
State taxes, net of federal tax benefits		9.06			7.33			5.81
Tax credit - federal		(1.52	)		(1.30	)		(1.16	)
Low-income housing amortization		1.64			1.34			1.37
Other		(0.03	)		(0.42	)		0.16
Effective tax rate		30.15	%		27.95	%		27.18	%

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Accumulated Other Comprehensive Income (Loss) (Tables)

12 Months Ended

Dec. 31, 2023

Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]

Activity in Accumulated Other Comprehensive Income

Activity in accumulated other comprehensive income for the year ended December 31, 2023, 2022 and 2021 was as follows:

	Unrealized Gains and Losses on Available for Sale Securities			Unrealized Gains and Losses on Cash Flow Hedge		Tax Benefit (Expense)			Total
	(in thousands)
For the year ended December 31, 2023
Balance at beginning of period	$	(124,958	)	$	—	$	35,973		$	(88,985	)
Other comprehensive income (loss) before reclassification		21,795			306		(6,351	)		15,750
Reclassification from accumulated other comprehensive income		1,871			—		(564	)		1,307
Net current period other comprehensive income		23,666			306		(6,915	)		17,057
Balance at end of period	$	(101,292	)	$	306	$	29,058		$	(71,928	)
For the year ended December 31, 2022
Balance at beginning of period	$	(11,864	)	$	—	$	3,421		$	(8,443	)
Other comprehensive income (loss) before reclassification		(113,094	)		—		32,552			(80,542	)
Net current period other comprehensive income		(113,094	)		—		32,552			(80,542	)
Balance at end of period	$	(124,958	)	$	—	$	35,973		$	(88,985	)
For the year ended December 31, 2021
Balance at beginning of period	$	4,323		$	—	$	(1,247	)	$	3,076
Other comprehensive income (loss) before reclassification		(16,686	)		—		4,668			(12,018	)
Reclassification from accumulated other comprehensive income		499			—		—			499
Net current period other comprehensive income		(16,187	)		—		4,668			(11,519	)
Balance at end of period	$	(11,864	)	$	—	$	3,421		$	(8,443	)

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Regulatory Matters (Tables)

12 Months Ended

Dec. 31, 2023

Regulatory Capital Requirements Under Banking Regulations [Abstract]

Capital Ratios of Hanmi Financial and Bank

The capital ratios of Hanmi Financial and the Bank as of December 31, 2023 and 2022 were as follows:

	Actual					Minimum Regulatory Requirement					Minimum to be Categorized as “Well Capitalized”
	Amount		Ratio			Amount		Ratio			Amount		Ratio
	(dollars in thousands)
December 31, 2023
Total capital (to risk-weighted assets):
Hanmi Financial	$	947,286		14.95	%	$	506,891		8.00	%	N/A		N/A
Hanmi Bank	$	904,153		14.27	%	$	506,741		8.00	%	$	633,426		10.00	%
Tier 1 capital (to risk-weighted assets):
Hanmi Financial	$	773,179		12.20	%	$	380,168		6.00	%	N/A		N/A
Hanmi Bank	$	840,046		13.26	%	$	380,056		6.00	%	$	506,741		8.00	%
Common equity Tier 1 capital (to risk-weighted assets)
Hanmi Financial	$	751,516		11.86	%	$	285,126		4.50	%	N/A		N/A
Hanmi Bank	$	840,046		13.26	%	$	285,042		4.50	%	$	411,727		6.50	%
Tier 1 capital (to average assets):
Hanmi Financial	$	773,179		10.37	%	$	298,277		4.00	%	N/A		N/A
Hanmi Bank	$	840,046		11.32	%	$	296,948		4.00	%	$	371,185		5.00	%
December 31, 2022
Total capital (to risk-weighted assets):
Hanmi Financial	$	901,239		14.49	%	$	497,508		8.00	%	N/A		N/A
Hanmi Bank	$	860,503		13.86	%	$	496,607		8.00	%	$	620,758		10.00	%
Tier 1 capital (to risk-weighted assets):
Hanmi Financial	$	728,344		11.71	%	$	373,131		6.00	%	N/A		N/A
Hanmi Bank	$	797,608		12.85	%	$	372,455		6.00	%	$	496,607		8.00	%
Common equity Tier 1 capital (to risk-weighted assets)
Hanmi Financial	$	707,101		11.37	%	$	279,848		4.50	%	N/A		N/A
Hanmi Bank	$	797,608		12.85	%	$	279,341		4.50	%	$	403,493		6.50	%
Tier 1 capital (to average assets):
Hanmi Financial	$	728,344		10.07	%	$	289,311		4.00	%	N/A		N/A
Hanmi Bank	$	797,608		11.07	%	$	288,110		4.00	%	$	360,137		5.00	%

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Fair Value Measurements (Tables)

12 Months Ended

Dec. 31, 2023

Fair Value Disclosures [Abstract]

Assets and Liabilities Measured at Fair Value on Recurring Basis

As of December 31, 2023 and 2022, 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		Total Fair Value
	(in thousands)
December 31, 2023
Assets:
Securities available for sale:
U.S. Treasury securities	$	85,488	$	—	$	—	$	85,488
U.S. government agency and sponsored agency obligations:
Mortgage-backed securities - residential		—		442,328		—		442,328
Mortgage-backed securities - commercial		—		47,991		—		47,991
Collateralized mortgage obligations		—		97,411		—		97,411
Debt securities		—		124,625		—		124,625
Total U.S. government agency and sponsored agency obligations		—		712,355		—		712,355
Municipal bonds-tax exempt		—		67,896		—		67,896
Total securities available for sale	$	85,488	$	780,251	$	—	$	865,739
Derivative financial instruments	$	—	$	6,245	$	—	$	6,245
Liabilities:
Derivative financial instruments	$	—	$	5,920	$	—	$	5,920
December 31, 2022
Assets:
Securities available for sale:
U.S. Treasury securities	$	48,026	$	—	$	—	$	48,026
U.S. government agency and sponsored agency obligations:
Mortgage-backed securities - residential		—		465,152		—		465,152
Mortgage-backed securities - commercial		—		51,292		—		51,292
Collateralized mortgage obligations		—		85,485		—		85,485
Debt securities		—		138,499		—		138,499
Total U.S. government agency and sponsored agency obligations		—		740,428		—		740,428
Municipal bonds-tax exempt		—		65,384		—		65,384
Total securities available for sale	$	48,026	$	805,812	$	—	$	853,838
Derivative financial instruments	$	—	$	7,507	$	—	$	7,507
Liabilities:
Derivative financial instruments	$	—	$	7,375	$	—	$	7,375

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

As of December 31, 2023 and 2022, assets and liabilities measured at fair value on a non-recurring basis are as follows:

			Level 1		Level 2		Level 3
	Total		Prices in Active Markets for Identical Assets		Observable Inputs with No Active Market with Identical Characteristics		Significant Unobservable Inputs
	(in thousands)
December 31, 2023
Assets:
Collateral dependent loans (1)	$	7,352	$	—	$	—	$	7,352
Other real estate owned		117		—		—		117
Repossessed personal property		1,305		—		—		1,305
December 31, 2022
Assets:
Collateral dependent loans (2)	$	2,694	$	—	$	—	$	2,694
Other real estate owned		117		—		—		117
Repossessed personal property		467		—		—		467
Servicing assets		7,176		—		—		7,176

(1) Consisted of real estate loans of $2.2 million and commercial and industrial loans of $5.2 million.

(2) Consisted of real estate loans of $2.7 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 December 31, 2023 and 2022:

	Fair Value		Valuation Techniques	Unobservable Input(s)	Range (Weighted Average)
	(dollars in thousands)
December 31, 2023
Collateral dependent loans:
Real estate loans:
Commercial property
Retail	$	1,530	Market approach	Adjustments to market data	5% to 20% / 15%	(1)
Hospitality		338	Market approach	Adjustments to market data	(30)% to 35% / (1)%	(1)
Other		305	Market approach	Adjustments to market data	(6)% to 1% / (2)%	(1)
Residential		1	Market approach	Adjustments to market data	(15)% to 3% / (6)%	(1)
Total real estate loans		2,174
Commercial and industrial loans		5,178	Market approach	Adjustments to market data	(20)% to 55% / (2)%	(1)
Total	$	7,352
Other real estate owned	$	117	Market approach	Adjustments to market data	(10)% to 5% / (2)%	(1)
Repossessed personal property		1,305	Market approach	Adjustments to market data		(2)
December 31, 2022
Collateral dependent loans:
Real estate loans:
Commercial property
Retail	$	1,930	Market approach	Adjustments to market data	5% to 25% / 16%	(1)
Other		256	Market approach	Adjustments to market data	(42)% to 3% / (24)%	(1)
Residential		508	Market approach	Adjustments to market data	(15)% to 3% / (1)%	(1)
Total real estate loans		2,694
Total	$	2,694
Other real estate owned	$	117	Market approach	Adjustments to market data	(20)% to 20% / (2)%	(1)
Repossessed personal property		467	Market approach	Adjustments to market data		(2)
Servicing assets		7,176	Market approach	Prepayment rate Discount rate	11% to 17% / 16% 22% to 25% / 22%	(3)

(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 adjustment represent decreases.

(2)The equipment is usually too low 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.

(3)Fair value is based on a valuation model using the present value of estimated future cash flows, prepayment speeds, default rates, and discount rates. Servicing assets are subsequently measured using the amortization method which requires servicing rights to be amortized into income over the period of the estimated future net servicing income of the underlying loans.

Estimated Fair Values of Financial Instruments

The estimated fair values of financial instruments were as follows:

	December 31, 2023
	Carrying		Fair Value
	Amount		Level 1		Level 2		Level 3
	(in thousands)
Financial assets:
Cash and due from banks	$	302,324	$	302,324	$	—	$	—
Securities available for sale		865,739		85,488		780,251		—
Loans held for sale		12,013		—		12,238		—
Loans receivable, net of allowance for credit losses		6,112,972		—		—		6,007,975
Accrued interest receivable		23,371		23,371		—		—
Financial liabilities:
Noninterest-bearing deposits		2,003,596		—		2,003,596		—
Interest-bearing deposits		4,276,978		—		—		4,271,711
Borrowings and subordinated debentures		455,012		—		323,491		128,229
Accrued interest payable		39,306		39,306		—		—

	December 31, 2022
	Carrying		Fair Value
	Amount		Level 1		Level 2		Level 3
	(in thousands)
Financial assets:
Cash and due from banks	$	352,421	$	352,421	$	—	$	—
Securities available for sale		853,838		48,026		805,812		—
Loans held for sale		8,043		—		8,423		—
Loans receivable, net of allowance for credit losses		5,895,610		—		—		5,808,190
Accrued interest receivable		18,537		18,537		—		—
Financial liabilities:
Noninterest-bearing deposits		2,539,602		—		2,539,602		—
Interest-bearing deposits		3,628,470		—		—		3,623,827
Borrowings and subordinated debentures		479,409		—		345,867		126,828
Accrued interest payable		7,792		7,792		—		—

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Share-Based Compensation (Tables)

12 Months Ended

Dec. 31, 2023

Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]

Share-Based Compensation Expense and Related Tax Benefits

The table below provides the share-based compensation expense and related tax benefits for the periods indicated:

	Year Ended December 31,
	2023		2022		2021
	(in thousands)
Share-based compensation expense	$	2,681	$	2,595	$	2,436
Related tax benefits	$	808	$	752	$	703

Summary of Information under Plans

The following information under the Plans is presented for the periods indicated:

	Year Ended December 31,
	2023		2022		2021
	(in thousands)
Total intrinsic value of options exercised (1)	$	343	$	20	$	—
Cash received from options exercised	$	—	$	19	$	—

(1)Intrinsic value represents the difference between the closing stock price on the exercise date and the exercise price, multiplied by the number of options.

Summary of Stock Option Transactions under Plans

The following is a summary of stock option transactions under the Plans for the periods indicated:

	Year Ended December 31,
	2023					2022					2021
	Number of Shares			Weighted- Average Exercise Price Per Share		Number of Shares			Weighted- Average Exercise Price Per Share		Number of Shares			Weighted- Average Exercise Price Per Share
Options outstanding at beginning of period		111,000		$	19.89		115,938		$	19.58		125,938		$	19.59
Options exercised		(50,000	)	23.29			(1,500	)	$	12.54		—		$	—
Options forfeited		—		$	—		—		$	—		(10,000	)	$	19.74
Options expired		—		$	—		(3,438	)	$	12.54		—		$	—
Options outstanding at end of period		61,000		$	22.73		111,000		$	19.89		115,938		$	19.58
Options exercisable at end of period		61,000		$	22.73		111,000		$	19.89		115,938		$	19.58

Summary of Stock Options Outstanding under Plans

As of December 31, 2023, stock options outstanding under the Plans were as follows:

	Options Outstanding									Options Exercisable
	Number of Shares		Intrinsic Value (1)			Weighted- Average Exercise Price Per Share		Weighted- Average Remaining Contractual Life		Number of Shares		Intrinsic Value (1)			Weighted- Average Exercise Price Per Share		Weighted- Average Remaining Contractual Life
$20.00 to $21.49		3,000	$	(7	)	$	20.64		0.59		3,000	$	(7	)	$	20.64		0.59
$21.50 to $23.49		55,000		(247	)	$	22.73		0.82		55,000		(247	)	$	22.73		0.82
$23.50 to $24.83		3,000		(20	)		24.83		1.48		3,000		(20	)		24.83		1.48
		61,000	$	(274	)	$	22.73		0.84		61,000	$	(274	)	$	22.73		0.84

(1)Intrinsic value represents the difference between the closing stock price on the last trading day of the period, which was $19.40 as of December 31, 2023, and the exercise price, multiplied by the number of options. This value is presented in thousands.

Restricted stock awards

Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]

Schedule of Restricted Stock Awards and Performance Stock Units under 2013 And 2021 Plan

The table below provides information for restricted stock awards under the Plans for the periods indicated:

	2023					2022					2021
	Number of Shares			Weighted- Average Grant Date Fair Value Per Share		Number of Shares			Weighted- Average Grant Date Fair Value Per Share		Number of Shares			Weighted- Average Grant Date Fair Value Per Share
Restricted stock at beginning of period		156,174		$	21.29		152,087		$	17.24		243,708		$	15.60
Restricted stock granted		131,021		$	18.86		101,271		$	24.56		75,679		$	19.62
Restricted stock vested		(83,968	)	$	19.34		(89,699	)	$	23.95		(134,659	)	$	16.01
Restricted stock forfeited		(6,782	)	$	23.08		(7,485	)	$	23.46		(32,641	)	$	15.02
Restricted stock at end of period		196,445		$	20.72		156,174		$	21.29		152,087		$	17.24

Performance Stock Units

Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]

Schedule of Restricted Stock Awards and Performance Stock Units under 2013 And 2021 Plan

The table below provides information for performance stock units under the 2021 Plans for the periods indicated:

	2023					2022				2021
	Number of Shares			Weighted- Average Grant Date Fair Value Per Share		Number of Shares		Weighted- Average Grant Date Fair Value Per Share		Number of Shares		Weighted- Average Grant Date Fair Value Per Share
Performance stock at beginning of period		104,599		$	18.83		66,563	$	15.25		23,937	$	9.65
Performance stock granted		53,696		$	21.08		38,036	$	25.10		42,626	$	18.40
Performance stock vested		(23,937	)	$	9.65		—	$	—		—	$	—
Performance stock at end of period		134,358		$	21.37		104,599	$	18.83		66,563	$	15.25

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Earnings per Share (Tables)

12 Months Ended

Dec. 31, 2023

Earnings Per Share [Abstract]

Reconciliation of Components Used to Derive Basic and Diluted EPS

The following table is a reconciliation of the components used to derive basic and diluted EPS for the periods indicated:

			Weighted-
	Net		Average		Per
	Income		Shares		Share
	(Numerator)		(Denominator)		Amount (1)
	(dollars in thousands except share and per share data)
Year Ended December 31, 2023
Basic EPS
Net income	$	80,041		30,269,740	$	2.64
Less: income allocated to unvested restricted stock		505		30,269,740		0.02
Basic EPS	$	79,536		30,269,740	$	2.63
Effect of dilutive securities - options and unvested restricted stock		—		60,518		—
Diluted EPS
Net income	$	80,041		30,330,258	$	2.64
Less: income allocated to unvested restricted stock		505		30,330,258		0.02
Diluted EPS	$	79,536		30,330,258	$	2.62
Year Ended December 31, 2022
Basic EPS
Net income	$	101,394		30,299,148	$	3.35
Less: income allocated to unvested restricted stock		558		30,299,148		0.02
Basic EPS	$	100,836		30,299,148	$	3.33
Effect of dilutive securities - options and unvested restricted stock		—		92,909		—
Diluted EPS
Net income	$	101,394		30,392,057	$	3.34
Less: income allocated to unvested restricted stock		558		30,392,057		0.02
Diluted EPS	$	100,836		30,392,057	$	3.32
Year Ended December 31, 2021
Basic EPS
Net income	$	98,677		30,393,559	$	3.25
Less: income allocated to unvested restricted stock		671		30,393,559		0.02
Basic EPS	$	98,006		30,393,559	$	3.22
Effect of dilutive securities - options and unvested restricted stock		—		78,188		—
Diluted EPS
Net income	$	98,677		30,471,747	$	3.24
Less: income allocated to unvested restricted stock		671		30,471,747		0.02
Diluted EPS	$	98,006		30,471,747	$	3.22

(1)Per share amounts may not be able to be recalculated using net income and weighted-average shares presented above due to rounding.

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Off-Balance Sheet Commitments (Tables)

12 Months Ended

Dec. 31, 2023

Risks and Uncertainties [Abstract]

Distribution of Undisbursed Loan Commitments

The following table shows the distribution of undisbursed loan commitments as of the dates indicated:

	December 31,
	2023		2022
	(in thousands)
Commitments to extend credit	$	813,960	$	780,543
Standby letters of credit		83,725		71,829
Commercial letters of credit		33,140		19,945
Total undisbursed loan commitments	$	930,825	$	872,317

Allowance for Credit Losses Related to Off-Balance Sheet Items

Activity in the allowance for credit losses related to off-balance sheet items was as follows for the periods indicated:

	As of and for the Year Ended December 31,
	2023			2022		2021
	(in thousands)
Balance at beginning of period	$	3,114		$	2,586	$	2,792
Provision (recovery) for credit losses		(640	)		528		(206	)
Balance at end of period	$	2,474		$	3,114	$	2,586

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Derivatives and Hedging Activities (Tables)

12 Months Ended

Dec. 31, 2023

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of Fair Value of Derivative Financial Instruments as well as their Classification on Balance Sheet

The table below presents the fair value of the Company’s derivative financial instruments as well as their classification on the Balance Sheet as of December 31, 2023 and 2022.

As of December 31, 2023	Derivative Assets					Derivative Liabilities
	Notional Amount		Balance Sheet Location	Fair Value		Notional Amount		Balance Sheet Location	Fair Value
	(in thousands)
Derivatives not designated as hedging instruments
Interest rate products	$	104,571	Other Assets	$	5,939	$	104,571	Other Liabilities	$	5,920
Total derivatives not designated as hedging instruments				$	5,939				$	5,920
Derivatives designated as hedging instruments
Interest rate products	$	100,000	Other Assets	$	306	$	—	Other Liabilities	$	—
Total derivatives designated as hedging instruments				$	306				$	—
As of December 31, 2022	Derivative Assets					Derivative Liabilities
	Notional Amount		Balance Sheet Location	Fair Value		Notional Amount		Balance Sheet Location	Fair Value
	(in thousands)
Derivatives not designated as hedging instruments
Interest rate products	$	61,460	Other Assets	$	7,507	$	61,460	Other Liabilities	$	7,375
Total derivatives not designated as hedging instruments				$	7,507				$	7,375

Summary of Effect of Cash Flow Hedge Accounting on Accumulated Other Comprehensive Income

The table below presents the effect of cash flow hedge accounting on Accumulated Other Comprehensive Income as of December 31, 2023.

As of December 31, 2023
Derivatives in Subtopic 815-20 Hedging Relationships	Amount of Gain or (Loss) Recognized in OCI on Derivative		Amount of Gain or (Loss) Recognized in OCI Included Component		Amount of Gain or (Loss) Recognized in OCI Excluded Component		Location of Gain or (Loss) Recognized from Accumulated Other Comprehensive Income into Income	Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income		Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income Included Component		Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income Excluded Component
	(in thousands)
Derivatives in Cash Flow Hedging Relationships
Interest Rate Products	$	306	$	306	$	—	Interest Income	$	—	$	—	$	—
Total	$	306	$	306	$	—		$	—	$	—	$	—

Effect of Derivative Financial Instruments that are Not Designated as Hedging Instruments on Income Statement

The table below presents the effect of the Company’s derivative financial instruments that are not designated as hedging instruments on the Income Statement as of December 31, 2023, 2022 and 2021.

Derivatives Not Designated as Hedging Instruments under Subtopic 815-20	Location of Gain or (Loss) Recognized in Income on Derivative	Amount of Gain or (Loss) Recognized in Income on Derivative
		For the Year Ended December 31,
		2023			2022		2021
		(in thousands)
Interest rate products	Other income	$	(114	)	$	113	$	80
Total		$	(114	)	$	113	$	80

Summary of Gross Presentation, Effects of Offsetting and a Net Presentation of Derivatives

The table below presents a gross presentation, the effects of offsetting, and a net presentation of the Company’s derivatives as of December 31, 2023 and 2022. The net amounts of derivative assets or liabilities can be reconciled to the tabular disclosure of fair value. The tabular disclosure of fair value provides the location that derivative assets and liabilities are presented on the Balance Sheet.

Offsetting of Derivative Assets
As of December 31, 2023
							Gross Amounts Not Offset in the Consolidated Balance Sheets
	Gross Amounts of Recognized Assets		Gross Amounts Offset in the Statement of Financial Position		Net Amounts of Assets presented in the Statement of Financial Position		Financial Instruments		Cash Collateral Received		Net Amount
	(in thousands)
Derivatives	$	6,245	$	—	$	6,245	$	284	$	5,731	$	230
Offsetting of Derivative Liabilities
As of December 31, 2023
							Gross Amounts Not Offset in the Consolidated Balance Sheets
	Gross Amounts of Recognized Liabilities		Gross Amounts Offset in the Statement of Financial Position		Net Amounts of Liabilities presented in the Statement of Financial Position		Financial Instruments		Cash Collateral Provided		Net Amount
	(in thousands)
Derivatives	$	5,920	$	—	$	5,920	$	284	$	—	$	5,636
Offsetting of Derivative Assets
As of December 31, 2022
							Gross Amounts Not Offset in the Consolidated Balance Sheets
	Gross Amounts of Recognized Assets		Gross Amounts Offset in the Statement of Financial Position		Net Amounts of Assets presented in the Statement of Financial Position		Financial Instruments		Cash Collateral Received		Net Amount
	(in thousands)
Derivatives	$	7,507	$	—	$	7,507	$	7,375	$	132	$	—
Offsetting of Derivative Liabilities
As of December 31, 2022
							Gross Amounts Not Offset in the Consolidated Balance Sheets
	Gross Amounts of Recognized Liabilities		Gross Amounts Offset in the Statement of Financial Position		Net Amounts of Liabilities presented in the Statement of Financial Position		Financial Instruments		Cash Collateral Provided		Net Amount
	(in thousands)
Derivatives	$	7,375	$	—	$	7,375	$	7,375	$	—	$	—

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Condensed Financial Information of Parent Company (Tables)

12 Months Ended

Dec. 31, 2023

Condensed Financial Information Disclosure [Abstract]

Balance Sheets of Parent Company

Balance Sheets

	At December 31,
	2023		2022
	(in thousands)
Assets
Cash	$	7,492	$	10,558
Securities available for sale		32,389		17,660
Investments in consolidated subsidiaries		790,425		728,172
Other assets		3,551		12,611
Total assets	$	833,857	$	769,001
Liabilities and stockholders' equity
Liabilities
Subordinated debentures	$	130,012	$	129,409
Other liabilities		1,954		2,077
Total liabilities		131,966		131,486
Stockholders' equity		701,891		637,515
Total liabilities and stockholders' equity	$	833,857	$	769,001

Statement of Income of Parent Company

Statements of Income

	Year Ended December 31,
	2023			2022			2021
	(in thousands)
Dividends from bank subsidiaries	$	44,500		$	57,000		$	20,639
Interest income on securities		1,094			191			—
Interest expense		(6,482	)		(8,037	)		(8,273	)
Other expense		(5,817	)		(5,174	)		(4,891	)
Income before taxes and undistributed income of subsidiary		33,295			43,980			7,475
Income tax benefit		1,403			4,026			3,962
Income before undistributed income of subsidiary		34,698			48,006			11,437
Equity in undistributed income of subsidiary		45,343			53,388			87,239
Net income	$	80,041		$	101,394		$	98,676

Statement of Cash Flows of Parent Company

Statements of Cash Flows

	Year Ended December 31,
	2023			2022			2021
	(in thousands)
Cash Flows from Operating Activities:
Net income	$	80,041		$	101,394		$	98,676
Adjustments to reconcile net income to net cash used in operating activities
Undistributed income of subsidiary		(45,343	)		(53,388	)		(87,239	)
Depreciation and amortization		409			1,703			1,148
Share-based compensation expense		2,680			2,596			2,437
Change in other assets and liabilities		8,879			(2,019	)		(9,076	)
Net cash provided by operating activities		46,666			50,286			5,946
Cash Flows from Investing Activities:
Purchases of securities		(21,328	)		(17,956	)		—
Proceeds from matured, called and repayment of securities		7,000			—			—
Net cash used in investing activities		(14,328	)		(17,956	)		—
Cash Flows from Financing Activities:
Proceeds from exercise of stock options		—			19			—
Issuance of subordinated debentures		—			—			107,929
Redemption of subordinated debentures, net of treasury debentures		—			(87,300	)		(13,043	)
Cash paid for employee vested shares surrendered due to employee tax liability		(785	)		(732	)		(572	)
Repurchase of common stock		(4,084	)		—			(6,135	)
Cash dividends paid		(30,535	)		(28,636	)		(16,514	)
Net cash provided by (used in) financing activities		(35,404	)		(116,649	)		71,665
Net increase (decrease) in cash		(3,066	)		(84,319	)		77,611
Cash at beginning of year		10,558			94,877			17,266
Cash at end of year	$	7,492		$	10,558		$	94,877

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Summary of Significant Accounting Policies - Additional Information (Detail) $ in Thousands	12 Months Ended
	Dec. 31, 2023 USD ($) Branch Segment shares	Dec. 31, 2021 USD ($)	Dec. 31, 2022 USD ($)	Jan. 24, 2019 shares
Financing Receivable, Recorded Investment, Past Due [Line Items]
Number of reportable segments | Segment	1
Accrued interest receivable on available-for-sale debt securities	$ 3,300		$ 2,400
Debt Securities, Available-for-Sale, Accrued Interest, after Allowance for Credit Loss, Statement of Financial Position [Extensible Enumeration]	Accrued interest		Accrued interest
Retained earnings	$ 319,048		$ 269,542
Impairment of intangible assets	0
Goodwill impairment loss	0
Bank-owned life insurance	$ 56,335		$ 55,544
Stock options, expiration term from date of grant	10 years
Number of shares authorized for repurchase (percent)				5.00%
Number of shares authorized for repurchase under program (shares) | shares				1,500,000
Shares repurchased (shares) | shares	250,000
Shares repurchased	$ 4,084	$ 6,135
Minimum
Financing Receivable, Recorded Investment, Past Due [Line Items]
Period of continuous service	3 years
Maximum
Financing Receivable, Recorded Investment, Past Due [Line Items]
Period of continuous service	5 years
Split Dollar Death Benefit Agreement
Financing Receivable, Recorded Investment, Past Due [Line Items]
Bank-owned life insurance	$ 2,500
Full Service
Financing Receivable, Recorded Investment, Past Due [Line Items]
Number of branches | Branch	35
Loan Production
Financing Receivable, Recorded Investment, Past Due [Line Items]
Number of branches | Branch	8

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Summary of Significant Accounting Policies - Summary of Impact of ASU on Allowance for Credit Losses (Detail) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]
Loans receivable, allowance for credit losses	$ 69,462	$ 71,523
Real Estate
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]
Loans receivable, allowance for credit losses	45,499	44,026
Real Estate | Retail
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]
Loans receivable, allowance for credit losses	10,264	7,872
Real Estate | Hospitality
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]
Loans receivable, allowance for credit losses	15,534	13,407
Real Estate | Other
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]
Loans receivable, allowance for credit losses	8,663	13,056
Real Estate | Total commercial property loans
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]
Loans receivable, allowance for credit losses	37,485	36,628
Real Estate | Construction
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]
Loans receivable, allowance for credit losses	2,756	4,022
Commercial and Industrial
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]
Loans receivable, allowance for credit losses	10,257	15,267
Equipment Financing Agreements
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]
Loans receivable, allowance for credit losses	$ 13,706	$ 12,230

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Summary of Significant Accounting Policies - Useful Lives for Principal Classes of Assets (Detail)	12 Months Ended
	Dec. 31, 2023
Buildings and improvements | Minimum
Property, Plant and Equipment [Line Items]
Premises and equipment useful life	10 years
Buildings and improvements | Maximum
Property, Plant and Equipment [Line Items]
Premises and equipment useful life	30 years
Furniture and equipment | Minimum
Property, Plant and Equipment [Line Items]
Premises and equipment useful life	3 years
Furniture and equipment | Maximum
Property, Plant and Equipment [Line Items]
Premises and equipment useful life	10 years
Leasehold improvements
Property, Plant and Equipment [Line Items]
Premises and equipment useful life	Term of lease or useful life, whichever is shorter
Software | Minimum
Property, Plant and Equipment [Line Items]
Premises and equipment useful life	3 years
Software | Maximum
Property, Plant and Equipment [Line Items]
Premises and equipment useful life	7 years

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Securities - Summary of Investment Securities Available for Sale (Detail) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	$ 967,031	$ 978,796
Gross Unrealized Gain	891	63
Gross Unrealized Loss	(102,183)	(125,021)
Estimated Fair Value	865,739	853,838
U.S. Treasury securities
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	86,355	49,690
Gross Unrealized Gain	173
Gross Unrealized Loss	(1,040)	(1,664)
Estimated Fair Value	85,488	48,026
Mortgage-backed securities - residential
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	504,544	540,590
Gross Unrealized Gain	481	63
Gross Unrealized Loss	(62,697)	(75,501)
Estimated Fair Value	442,328	465,152
Mortgage-backed securities - commercial
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	59,973	61,799
Gross Unrealized Loss	(11,982)	(10,507)
Estimated Fair Value	47,991	51,292
Collateralized mortgage obligations
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	106,823	98,236
Gross Unrealized Gain	237
Gross Unrealized Loss	(9,649)	(12,751)
Estimated Fair Value	97,411	85,485
Debt securities
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	132,215	150,338
Gross Unrealized Loss	(7,590)	(11,839)
Estimated Fair Value	124,625	138,499
Total U.S. government agency and sponsored agency obligations
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	803,555	850,963
Gross Unrealized Gain	718	63
Gross Unrealized Loss	(91,918)	(110,598)
Estimated Fair Value	712,355	740,428
Municipal bonds-tax exempt
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	77,121	78,143
Gross Unrealized Gain
Gross Unrealized Loss	(9,225)	(12,759)
Estimated Fair Value	$ 67,896	$ 65,384

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Securities - Schedule of Amortized Cost and Estimated Fair Value of Investment Securities by Contractual Maturity (Detail) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Investments, Debt and Equity Securities [Abstract]
Available-for-Sale Within one year, Amortized Cost	$ 62,521
Available-for-Sale Over one year through five years, Amortized Cost	169,176
Available-for-Sale Over five years through ten years, Amortized Cost	83,720
Available-for-Sale Over ten years, Amortized Cost	651,614
Amortized Cost	967,031	$ 978,796
Available-for-Sale Within one year, Estimated Fair Value	61,828
Available-for-Sale Over one year through five years, Estimated Fair Value	160,983
Available-for-Sale Over five years through ten years, Estimated Fair Value	77,608
Available-for-Sale Over ten years, Estimated Fair Value	565,320
Estimated fair value	$ 865,739	$ 853,838

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Securities - Summary of Debt Securities Available for Sale in an Unrealized Loss Position for Which an Allowance for Credit Losses Has Not Been Recorded (Detail) $ in Thousands	Dec. 31, 2023 USD ($) Security	Dec. 31, 2022 USD ($) Security
Summary of Investment Holdings [Line Items]
Available-for-Sale Within One Year, Gross Unrealized Loss	$ (106)	$ (4,324)
Available-for-Sale Within One Year, Estimated Fair Value	$ 30,422	$ 129,210
Available-for-Sale Within One Year, Number of Securities | Security	14	49
Available-for-Sale More than One Year, Gross Unrealized Loss	$ (102,077)	$ (120,697)
Available-for-Sale More than One Year, Estimated Fair Value	$ 747,988	$ 719,787
Available-for-Sale More than One Year, Number of Securities | Security	213	184
Available-for-Sale, Gross Unrealized Loss	$ (102,183)	$ (125,021)
Available-for-Sale, Estimated Fair Value	$ 778,410	$ 848,997
Available-for-Sale, Number of Securities | Security	227	233
U.S. Treasury securities
Summary of Investment Holdings [Line Items]
Available-for-Sale Within One Year, Gross Unrealized Loss	$ (57)	$ (414)
Available-for-Sale Within One Year, Estimated Fair Value	$ 21,024	$ 33,812
Available-for-Sale Within One Year, Number of Securities | Security	7	14
Available-for-Sale More than One Year, Gross Unrealized Loss	$ (983)	$ (1,250)
Available-for-Sale More than One Year, Estimated Fair Value	$ 32,449	$ 14,215
Available-for-Sale More than One Year, Number of Securities | Security	11	4
Available-for-Sale, Gross Unrealized Loss	$ (1,040)	$ (1,664)
Available-for-Sale, Estimated Fair Value	$ 53,473	$ 48,027
Available-for-Sale, Number of Securities | Security	18	18
Mortgage-backed securities - residential
Summary of Investment Holdings [Line Items]
Available-for-Sale Within One Year, Gross Unrealized Loss	$ (11)	$ (1,712)
Available-for-Sale Within One Year, Estimated Fair Value	$ 2,324	$ 36,009
Available-for-Sale Within One Year, Number of Securities | Security	5	18
Available-for-Sale More than One Year, Gross Unrealized Loss	$ (62,686)	$ (73,789)
Available-for-Sale More than One Year, Estimated Fair Value	$ 411,417	$ 424,302
Available-for-Sale More than One Year, Number of Securities | Security	118	105
Available-for-Sale, Gross Unrealized Loss	$ (62,697)	$ (75,501)
Available-for-Sale, Estimated Fair Value	$ 413,741	$ 460,311
Available-for-Sale, Number of Securities | Security	123	123
Mortgage-backed securities - commercial
Summary of Investment Holdings [Line Items]
Available-for-Sale Within One Year, Gross Unrealized Loss		$ (84)
Available-for-Sale Within One Year, Estimated Fair Value		$ 4,069
Available-for-Sale Within One Year, Number of Securities | Security		1
Available-for-Sale More than One Year, Gross Unrealized Loss	$ (11,982)	$ (10,423)
Available-for-Sale More than One Year, Estimated Fair Value	$ 47,991	$ 47,221
Available-for-Sale More than One Year, Number of Securities | Security	15	14
Available-for-Sale, Gross Unrealized Loss	$ (11,982)	$ (10,507)
Available-for-Sale, Estimated Fair Value	$ 47,991	$ 51,290
Available-for-Sale, Number of Securities | Security	15	15
Collateralized mortgage obligations
Summary of Investment Holdings [Line Items]
Available-for-Sale Within One Year, Gross Unrealized Loss	$ (38)	$ (1,011)
Available-for-Sale Within One Year, Estimated Fair Value	$ 7,074	$ 23,606
Available-for-Sale Within One Year, Number of Securities | Security	2	8
Available-for-Sale More than One Year, Gross Unrealized Loss	$ (9,611)	$ (11,740)
Available-for-Sale More than One Year, Estimated Fair Value	$ 63,610	$ 61,879
Available-for-Sale More than One Year, Number of Securities | Security	24	20
Available-for-Sale, Gross Unrealized Loss	$ (9,649)	$ (12,751)
Available-for-Sale, Estimated Fair Value	$ 70,684	$ 85,485
Available-for-Sale, Number of Securities | Security	26	28
Debt securities
Summary of Investment Holdings [Line Items]
Available-for-Sale Within One Year, Gross Unrealized Loss		$ (1,103)
Available-for-Sale Within One Year, Estimated Fair Value		$ 31,714
Available-for-Sale Within One Year, Number of Securities | Security		8
Available-for-Sale More than One Year, Gross Unrealized Loss	$ (7,590)	$ (10,736)
Available-for-Sale More than One Year, Estimated Fair Value	$ 124,625	$ 106,785
Available-for-Sale More than One Year, Number of Securities | Security	26	22
Available-for-Sale, Gross Unrealized Loss	$ (7,590)	$ (11,839)
Available-for-Sale, Estimated Fair Value	$ 124,625	$ 138,499
Available-for-Sale, Number of Securities | Security	26	30
Total U.S. government agency and sponsored agency obligations
Summary of Investment Holdings [Line Items]
Available-for-Sale Within One Year, Gross Unrealized Loss	$ (49)	$ (3,910)
Available-for-Sale Within One Year, Estimated Fair Value	$ 9,398	$ 95,398
Available-for-Sale Within One Year, Number of Securities | Security	7	35
Available-for-Sale More than One Year, Gross Unrealized Loss	$ (91,869)	$ (106,688)
Available-for-Sale More than One Year, Estimated Fair Value	$ 647,643	$ 640,187
Available-for-Sale More than One Year, Number of Securities | Security	183	161
Available-for-Sale, Gross Unrealized Loss	$ (91,918)	$ (110,598)
Available-for-Sale, Estimated Fair Value	$ 657,041	$ 735,585
Available-for-Sale, Number of Securities | Security	190	196
Municipal bonds-tax exempt
Summary of Investment Holdings [Line Items]
Available-for-Sale More than One Year, Gross Unrealized Loss	$ (9,225)	$ (12,759)
Available-for-Sale More than One Year, Estimated Fair Value	$ 67,896	$ 65,385
Available-for-Sale More than One Year, Number of Securities | Security	19	19
Available-for-Sale, Gross Unrealized Loss	$ (9,225)	$ (12,759)
Available-for-Sale, Estimated Fair Value	$ 67,896	$ 65,385
Available-for-Sale, Number of Securities | Security	19	19

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Securities - Realized Gains and Losses on Sales of Investment Securities (Detail) - USD ($)	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Investments, Debt and Equity Securities [Abstract]
Gross realized gains on sales of securities			$ 99,000
Gross realized losses on sales of securities	$ (1,871,000)		(598,000)
Net realized gains (losses) on sales of securities	(1,871,000)		(499,000)
Proceeds from sales of securities	$ 8,149,000	$ 0	$ 55,884,000

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Securities - Additional Information (Detail) - USD ($)	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Debt Securities, Available-for-sale [Line Items]
Proceeds from sales of securities	$ 8,149,000	$ 0	$ 55,884,000
Net gains (loss) in earnings resulting from sale of securities	(1,871,000)		(499,000)
Net unrealized gains (losses) recorded in comprehensive income	(1,700,000)	1,700,000	$ (100,000)	$ 100,000
Securities available for sale	865,739,000	853,838,000
Available for sale securities pledged as collateral	$ 24,800,000	$ 23,400,000
Minimum | U.S. Government and its Agencies
Debt Securities, Available-for-sale [Line Items]
Holdings of securities as percentage of share holders' equity	10.00%

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Loans Receivable - Loans Receivable (Detail) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total gross loans receivable	$ 6,182,434	$ 5,967,133
Allowance for credit losses	(69,462)	(71,523)
Loans receivable, net	6,112,972	5,895,610
Real Estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total gross loans receivable	4,852,400	4,567,853
Allowance for credit losses	(45,499)	(44,026)
Real Estate | Retail
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total gross loans receivable	1,107,360	1,023,608
Allowance for credit losses	(10,264)	(7,872)
Real Estate | Hospitality
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total gross loans receivable	740,519	646,893
Allowance for credit losses	(15,534)	(13,407)
Real Estate | Office
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total gross loans receivable	574,981	499,946
Real Estate | Other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total gross loans receivable	1,366,534	1,553,729
Real Estate | Total commercial property loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total gross loans receivable	3,789,394	3,724,176
Allowance for credit losses	(37,485)	(36,628)
Real Estate | Construction
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total gross loans receivable	100,345	109,205
Allowance for credit losses	(2,756)	(4,022)
Real Estate | Residential
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total gross loans receivable	962,661	734,472
Allowance for credit losses	(5,258)	(3,376)
Commercial and Industrial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total gross loans receivable	747,819	804,492
Allowance for credit losses	(10,257)	(15,267)
Equipment Financing Agreements
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total gross loans receivable	582,215	594,788
Allowance for credit losses	$ (13,706)	$ (12,230)

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Loans Receivable - Loans Receivable (Parenthetical) (Detail) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total gross loans receivable	$ 6,182,434	$ 5,967,133
Payment Protection Program
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total gross loans receivable	200	900
Real Estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total gross loans receivable	4,852,400	4,567,853
Real Estate | Home Equity Loans and Lines - Residential
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total gross loans receivable	1,900	2,400
Real Estate | Personal Loans - Residential
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total gross loans receivable	$ 4,500	$ 4,600

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Loans Receivable - Additional Information (Detail)	12 Months Ended
	Dec. 31, 2023 USD ($) Property	Dec. 31, 2022 USD ($) Property	Dec. 31, 2021 USD ($)
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans receivable	$ 6,182,434,000	$ 5,967,133,000
Pledged loans receivable, carrying value	2,360,000,000
Accrued interest on loans	23,371,000	18,537,000
Loans held for sale, at the lower of cost or fair value	12,013,000	8,043,000	$ 13,342,000
Gains on sale of second draw PPP loans	5,701,000	9,478,000	17,266,000
Proceeds from sale of second draw PPP loans	$ 100,514,000	$ 156,109,000
Number of real estate properties | Property	1	1
Other real estate owned ("OREO")	$ 117,000	$ 117,000
Total recorded investment	0	0	0
Interest income on nonaccrual loans	200,000	46,000	$ 700,000
Loans Pledged to Secure Advances
Accounts, Notes, Loans and Financing Receivable [Line Items]
Pledged loans receivable, carrying value	2,360,000,000	2,400,000,000
Pass/Pass-Watch
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans receivable	6,085,752,000	5,841,928,000
Special Mention
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans receivable	65,315,000	79,013,000
Classified
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans receivable	31,367,000	46,192,000
Loans | Accrued Interest
Accounts, Notes, Loans and Financing Receivable [Line Items]
Accrued interest on loans	19,800,000	16,000,000.0
Payment Protection Program
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans receivable	200,000	900,000
SBA Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans held for sale, at the lower of cost or fair value	$ 12,000,000.0	$ 8,000,000.0

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Loans Receivable - Information on SBA Loans Held for Sale (Detail) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Financing Receivable, Reclassification From Portfolio Loans To Loans Held For Sale [Roll Forward]
Balance at beginning of period	$ 8,043	$ 13,342
Originations and transfers	104,998	150,825	$ 265,743
Sales	(100,514)	(156,109)
Principal paydowns and amortization	(514)	(15)
Balance at end of period	12,013	8,043	13,342
Real Estate
Financing Receivable, Reclassification From Portfolio Loans To Loans Held For Sale [Roll Forward]
Balance at beginning of period	3,775	6,954
Originations and transfers	65,705	99,547
Sales	(60,611)	(102,720)
Principal paydowns and amortization	(77)	(6)
Balance at end of period	8,792	3,775	6,954
Commercial and Industrial
Financing Receivable, Reclassification From Portfolio Loans To Loans Held For Sale [Roll Forward]
Balance at beginning of period	4,268	6,388
Originations and transfers	39,293	51,278
Sales	(39,903)	(53,389)
Principal paydowns and amortization	(437)	(9)
Balance at end of period	$ 3,221	$ 4,268	$ 6,388

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Loans Receivable - Loans Purchased by Portfolio Segment (Detail) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Accounts, Notes, Loans and Financing Receivable [Line Items]
Purchases of loans receivable	$ 9,657	$ 29,925
Commercial Real Estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Purchases of loans receivable		11,030
Commercial and Industrial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Purchases of loans receivable	$ 9,657	180
Residential Real Estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Purchases of loans receivable		$ 18,715

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Loans Receivable - Allowance for Credit Losses by Portfolio Segment (Detail) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Allowance for credit losses:
Beginning balance	$ 71,523
Ending balance	69,462	$ 71,523
Non-PCI Loans and Leases
Allowance for credit losses:
Beginning balance	71,523	72,557	$ 90,426
Charge-offs	(16,090)	(4,722)	(6,373)
Recoveries	9,047	3,348	12,650
Provision (recovery) for credit losses	4,982	340	(24,146)
Ending balance	69,462	71,523	72,557
Real Estate
Allowance for credit losses:
Beginning balance	44,026
Ending balance	45,499	44,026
Real Estate | Non-PCI Loans and Leases
Allowance for credit losses:
Beginning balance	44,026	48,890	51,876
Charge-offs	(627)	(1,886)	(1,427)
Recoveries	312	848	10,807
Provision (recovery) for credit losses	1,788	(3,826)	(12,366)
Ending balance	45,499	44,026	48,890
Commercial and Industrial
Allowance for credit losses:
Beginning balance	15,267
Ending balance	10,257	15,267
Commercial and Industrial | Non-PCI Loans and Leases
Allowance for credit losses:
Beginning balance	15,267	12,418	21,410
Charge-offs	(6,657)	(524)	(546)
Recoveries	7,089	1,178	897
Provision (recovery) for credit losses	(5,442)	2,195	(9,343)
Ending balance	10,257	15,267	12,418
Equipment Financing Agreements
Allowance for credit losses:
Beginning balance	12,230
Ending balance	13,706	12,230
Equipment Financing Agreements | Non-PCI Loans and Leases
Allowance for credit losses:
Beginning balance	12,230	11,249	17,140
Charge-offs	(8,806)	(2,312)	(4,400)
Recoveries	1,646	1,322	946
Provision (recovery) for credit losses	8,636	1,971	(2,437)
Ending balance	$ 13,706	$ 12,230	$ 11,249

XML

Loans Receivable - Allowance for Credit Losses by Portfolio Segment as a Percentage of Recorded Total Allowance for Credit Losses and Aggregate Recorded Investment of Loans Receivable (Detail) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Financing Receivable Allowance For Credit Losses [Line Items]
Allowance Amount	$ 69,462	$ 71,523
Percentage of Total Allowance	100.00%	100.00%
Total Loans	$ 6,182,434	$ 5,967,133
Percentage of Total Loans	100.00%	100.00%
Real Estate
Financing Receivable Allowance For Credit Losses [Line Items]
Allowance Amount	$ 45,499	$ 44,026
Percentage of Total Allowance	65.50%	61.60%
Total Loans	$ 4,852,400	$ 4,567,853
Percentage of Total Loans	78.50%	76.60%
Real Estate | Retail
Financing Receivable Allowance For Credit Losses [Line Items]
Allowance Amount	$ 10,264	$ 7,872
Percentage of Total Allowance	14.80%	11.00%
Total Loans	$ 1,107,360	$ 1,023,608
Percentage of Total Loans	17.90%	17.20%
Real Estate | Hospitality
Financing Receivable Allowance For Credit Losses [Line Items]
Allowance Amount	$ 15,534	$ 13,407
Percentage of Total Allowance	22.40%	18.70%
Total Loans	$ 740,519	$ 646,893
Percentage of Total Loans	12.00%	10.80%
Real Estate | Office
Financing Receivable Allowance For Credit Losses [Line Items]
Allowance Amount	$ 3,024	$ 2,293
Percentage of Total Allowance	4.40%	3.20%
Total Loans	$ 574,981	$ 499,946
Percentage of Total Loans	9.30%	8.40%
Real Estate | Other
Financing Receivable Allowance For Credit Losses [Line Items]
Allowance Amount	$ 8,663	$ 13,056
Percentage of Total Allowance	12.40%	18.30%
Total Loans	$ 1,366,534	$ 1,553,729
Percentage of Total Loans	22.10%	26.00%
Real Estate | Total commercial property loans
Financing Receivable Allowance For Credit Losses [Line Items]
Allowance Amount	$ 37,485	$ 36,628
Percentage of Total Allowance	54.00%	51.20%
Total Loans	$ 3,789,394	$ 3,724,176
Percentage of Total Loans	61.30%	62.40%
Real Estate | Construction
Financing Receivable Allowance For Credit Losses [Line Items]
Allowance Amount	$ 2,756	$ 4,022
Percentage of Total Allowance	4.00%	5.70%
Total Loans	$ 100,345	$ 109,205
Percentage of Total Loans	1.60%	1.80%
Real Estate | Residential
Financing Receivable Allowance For Credit Losses [Line Items]
Allowance Amount	$ 5,258	$ 3,376
Percentage of Total Allowance	7.50%	4.70%
Total Loans	$ 962,661	$ 734,472
Percentage of Total Loans	15.60%	12.40%
Commercial and Industrial
Financing Receivable Allowance For Credit Losses [Line Items]
Allowance Amount	$ 10,257	$ 15,267
Percentage of Total Allowance	14.80%	21.30%
Total Loans	$ 747,819	$ 804,492
Percentage of Total Loans	12.10%	13.40%
Equipment Financing Agreements
Financing Receivable Allowance For Credit Losses [Line Items]
Allowance Amount	$ 13,706	$ 12,230
Percentage of Total Allowance	19.70%	17.10%
Total Loans	$ 582,215	$ 594,788
Percentage of Total Loans	9.40%	10.00%

XML

Loans Receivable - Summary of Amortized Cost Basis of Collateral Dependent Loans By Class of Loans (Detail) - USD ($) $ in Thousands		Dec. 31, 2023	Dec. 31, 2022
Loans And Leases Receivable Disclosure [Line Items]
Amortized Cost	[1]	$ 7,352	$ 2,694
Real Estate
Loans And Leases Receivable Disclosure [Line Items]
Amortized Cost		2,174	2,694
Real Estate | Retail
Loans And Leases Receivable Disclosure [Line Items]
Amortized Cost		1,530	1,930
Real Estate | Hospitality
Loans And Leases Receivable Disclosure [Line Items]
Amortized Cost		338
Real Estate | Other
Loans And Leases Receivable Disclosure [Line Items]
Amortized Cost		305	256
Real Estate | Total commercial property loans
Loans And Leases Receivable Disclosure [Line Items]
Amortized Cost		2,173	2,186
Real Estate | Residential
Loans And Leases Receivable Disclosure [Line Items]
Amortized Cost		1	$ 508
Commercial and Industrial
Loans And Leases Receivable Disclosure [Line Items]
Amortized Cost		$ 5,178

[1] Includes, among other property types, mixed-use, gas station, apartment, industrial, faith-based facilities and warehouse; the remaining real estate categories represent less than one percent of the Bank's total loans receivable.

XML

Loans Receivable - Schedule of Comparison Between the Periods of Disaggregated by Loan Class (Detail) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Financing Receivable, Credit Quality Indicator [Line Items]
Total gross loans receivable	$ 6,182,434	$ 5,967,133
Real Estate
Financing Receivable, Credit Quality Indicator [Line Items]
Total gross loans receivable	4,852,400	4,567,853
Real Estate | Retail
Financing Receivable, Credit Quality Indicator [Line Items]
Total gross loans receivable	1,107,360	1,023,608
Real Estate | Hospitality
Financing Receivable, Credit Quality Indicator [Line Items]
Total gross loans receivable	740,519	646,893
Real Estate | Other
Financing Receivable, Credit Quality Indicator [Line Items]
Total gross loans receivable	1,366,534	1,553,729
Real Estate | Total commercial property loans
Financing Receivable, Credit Quality Indicator [Line Items]
Total gross loans receivable	3,789,394	3,724,176
Real Estate | Construction
Financing Receivable, Credit Quality Indicator [Line Items]
Total gross loans receivable	100,345	109,205
Real Estate | Residential
Financing Receivable, Credit Quality Indicator [Line Items]
Total gross loans receivable	962,661	734,472
Commercial and Industrial
Financing Receivable, Credit Quality Indicator [Line Items]
Total gross loans receivable	747,819	804,492
Equipment Financing Agreements
Financing Receivable, Credit Quality Indicator [Line Items]
Total gross loans receivable	582,215	594,788
Pass/Pass-Watch
Financing Receivable, Credit Quality Indicator [Line Items]
Total gross loans receivable	6,085,752	5,841,928
Pass/Pass-Watch | Real Estate
Financing Receivable, Credit Quality Indicator [Line Items]
Total gross loans receivable	4,783,314	4,494,273
Pass/Pass-Watch | Real Estate | Total commercial property loans
Financing Receivable, Credit Quality Indicator [Line Items]
Total gross loans receivable	3,749,115	3,651,604
Pass/Pass-Watch | Real Estate | Construction
Financing Receivable, Credit Quality Indicator [Line Items]
Total gross loans receivable	72,039	109,205
Pass/Pass-Watch | Commercial and Industrial
Financing Receivable, Credit Quality Indicator [Line Items]
Total gross loans receivable	727,554	758,584
Pass/Pass-Watch | Equipment Financing Agreements
Financing Receivable, Credit Quality Indicator [Line Items]
Total gross loans receivable	574,884	589,071
Special Mention
Financing Receivable, Credit Quality Indicator [Line Items]
Total gross loans receivable	65,315	79,013
Special Mention | Real Estate
Financing Receivable, Credit Quality Indicator [Line Items]
Total gross loans receivable	50,571	35,484
Special Mention | Real Estate | Total commercial property loans
Financing Receivable, Credit Quality Indicator [Line Items]
Total gross loans receivable	21,765	34,984
Special Mention | Real Estate | Construction
Financing Receivable, Credit Quality Indicator [Line Items]
Total gross loans receivable	28,306
Special Mention | Commercial and Industrial
Financing Receivable, Credit Quality Indicator [Line Items]
Total gross loans receivable	14,744	43,529
Classified
Financing Receivable, Credit Quality Indicator [Line Items]
Total gross loans receivable	31,367	46,192
Classified | Real Estate
Financing Receivable, Credit Quality Indicator [Line Items]
Total gross loans receivable	18,515	38,096
Classified | Real Estate | Total commercial property loans
Financing Receivable, Credit Quality Indicator [Line Items]
Total gross loans receivable	18,514	37,588
Classified | Commercial and Industrial
Financing Receivable, Credit Quality Indicator [Line Items]
Total gross loans receivable	5,521	2,379
Classified | Equipment Financing Agreements
Financing Receivable, Credit Quality Indicator [Line Items]
Total gross loans receivable	$ 7,331	$ 5,717

XML

Loans Receivable - Loans by Vintage Year and Risk Rating (Detail) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Financing Receivable, Credit Quality Indicator [Line Items]
2023	$ 1,447,774	$ 2,307,514
2023 - YTD gross	178
2023 - YTD net	178
2022	1,766,797	1,432,869
2022 - YTD gross	3,961
2022 - YTD Net	3,749
2021	1,241,680	707,140
2021 - YTD gross	3,267
2021 - YTD net	2,851
2020	647,431	495,373
2020 - YTD gross	797
2020 - YTD net	647
2019	413,856	340,610
2019 - YTD gross	909
2019 - YTD net	351
Prior	380,747	384,424
Prior - Gross	858
Prior - Net	(6,823)
Revolving Loans Amortized Cost Basis	284,149	299,203
Revolving Loans Amortized Cost Basis - YTD gross	6,120
Revolving Loans Amortized Cost Basis - YTD net	6,090
Loans receivable	6,182,434	5,967,133
Loans receivable gross chargeoff	16,090
Loans receivable net chargeoff	7,043
Pass/Pass-Watch
Financing Receivable, Credit Quality Indicator [Line Items]
2023	1,439,588	2,306,025
2022	1,742,971	1,407,658
2021	1,203,259	700,389
2020	641,294	481,268
2019	407,087	327,631
Prior	374,248	356,707
Revolving Loans Amortized Cost Basis	277,305	262,250
Loans receivable	6,085,752	5,841,928
Special Mention
Financing Receivable, Credit Quality Indicator [Line Items]
2023	4,400	847
2022	18,575	22,669
2021	31,577	5,857
2020	5,772	7,115
2019	711	29
Prior	2,375	6,182
Revolving Loans Amortized Cost Basis	1,905	36,314
Loans receivable	65,315	79,013
Classified
Financing Receivable, Credit Quality Indicator [Line Items]
2023	3,786	642
2022	5,251	2,542
2021	6,844	894
2020	365	6,990
2019	6,058	12,950
Prior	4,124	21,535
Revolving Loans Amortized Cost Basis	4,939	639
Loans receivable	31,367	46,192
Real Estate
Financing Receivable, Credit Quality Indicator [Line Items]
2023	1,053,519	1,632,857
2022	1,367,611	1,155,192
2021	1,053,915	620,111
2020	591,276	416,445
2020 - YTD gross	411
2020 - YTD net	403
2019	384,573	314,985
Prior	364,339	369,763
Prior - Gross	216
Prior - Net	(88)
Revolving Loans Amortized Cost Basis	37,167	58,500
Loans receivable	4,852,400	4,567,853
Loans receivable gross chargeoff	627
Loans receivable net chargeoff	315
Real Estate | Pass/Pass-Watch
Financing Receivable, Credit Quality Indicator [Line Items]
2023	1,046,054	1,631,998
2022	1,362,534	1,141,808
2021	1,017,439	613,842
2020	585,606	405,018
2019	378,284	302,681
Prior	358,136	342,627
Revolving Loans Amortized Cost Basis	35,261	56,299
Loans receivable	4,783,314	4,494,273
Real Estate | Special Mention
Financing Receivable, Credit Quality Indicator [Line Items]
2023	4,400	847
2022	3,997	13,384
2021	31,577	5,857
2020	5,670	7,115
2019	711
Prior	2,310	6,080
Revolving Loans Amortized Cost Basis	1,906	2,201
Loans receivable	50,571	35,484
Real Estate | Classified
Financing Receivable, Credit Quality Indicator [Line Items]
2023	3,065	12
2022	1,080
2021	4,899	412
2020		4,312
2019	5,578	12,304
Prior	3,893	21,056
Loans receivable	18,515	38,096
Real Estate | Total commercial property loans
Financing Receivable, Credit Quality Indicator [Line Items]
2023	691,284	1,185,208
2022	991,899	914,413
2021	866,991	607,009
2020	578,620	416,213
2020 - YTD gross	411
2020 - YTD net	403
2019	384,356	314,254
Prior	244,602	234,501
Prior - Gross	216
Prior - Net	(81)
Revolving Loans Amortized Cost Basis	31,642	52,578
Loans receivable	3,789,394	3,724,176
Loans receivable gross chargeoff	627
Loans receivable net chargeoff	322
Real Estate | Total commercial property loans | Pass/Pass-Watch
Financing Receivable, Credit Quality Indicator [Line Items]
2023	683,819	1,184,361
2022	986,822	901,029
2021	858,821	600,740
2020	572,950	404,786
2019	378,067	301,950
Prior	238,400	207,861
Revolving Loans Amortized Cost Basis	30,236	50,877
Loans receivable	3,749,115	3,651,604
Real Estate | Total commercial property loans | Special Mention
Financing Receivable, Credit Quality Indicator [Line Items]
2023	4,400	847
2022	3,997	13,384
2021	3,271	5,857
2020	5,670	7,115
2019	711
Prior	2,310	6,080
Revolving Loans Amortized Cost Basis	1,406	1,701
Loans receivable	21,765	34,984
Real Estate | Total commercial property loans | Classified
Financing Receivable, Credit Quality Indicator [Line Items]
2023	3,065
2022	1,080
2021	4,899	412
2020		4,312
2019	5,578	12,304
Prior	3,892	20,560
Loans receivable	18,514	37,588
Real Estate | Construction
Financing Receivable, Credit Quality Indicator [Line Items]
2023	72,039	41,662
2022		67,543
2021	28,306
Loans receivable	100,345	109,205
Real Estate | Construction | Pass/Pass-Watch
Financing Receivable, Credit Quality Indicator [Line Items]
2023	72,039	41,662
2022		67,543
Loans receivable	72,039	109,205
Real Estate | Construction | Special Mention
Financing Receivable, Credit Quality Indicator [Line Items]
2021	28,306
Loans receivable	28,306
Real Estate | Residential
Financing Receivable, Credit Quality Indicator [Line Items]
2023	290,196	405,987
2022	375,712	173,236
2021	158,618	13,102
2020	12,656	232
2019	217	731
Prior	119,737	135,262
Prior - Net	(7)
Revolving Loans Amortized Cost Basis	5,525	5,922
Loans receivable	962,661	734,472
Loans receivable net chargeoff	(7)
Real Estate | Residential | Pass/Pass-Watch
Financing Receivable, Credit Quality Indicator [Line Items]
2023	290,196	405,975
2022	375,712	173,236
2021	158,618	13,102
2020	12,656	232
2019	217	731
Prior	119,736	134,766
Revolving Loans Amortized Cost Basis	5,025	5,422
Loans receivable	962,160	733,464
Real Estate | Residential | Special Mention
Financing Receivable, Credit Quality Indicator [Line Items]
Revolving Loans Amortized Cost Basis	500	500
Loans receivable	500	500
Real Estate | Residential | Classified
Financing Receivable, Credit Quality Indicator [Line Items]
2023		12
Prior	1	496
Loans receivable	1	508
Commercial and Industrial
Financing Receivable, Credit Quality Indicator [Line Items]
2023	178,193	368,778
2022	183,787	109,822
2022 - YTD gross	17
2022 - YTD Net	5
2021	84,198	39,748
2021 - YTD net	(7)
2020	31,450	25,214
2019	10,050	7,452
2019 - YTD gross	110
2019 - YTD net	101
Prior	13,159	12,775
Prior - Gross	410
Prior - Net	(6,621)
Revolving Loans Amortized Cost Basis	246,982	240,703
Revolving Loans Amortized Cost Basis - YTD gross	6,120
Revolving Loans Amortized Cost Basis - YTD net	6,090
Loans receivable	747,819	804,492
Loans receivable gross chargeoff	6,657
Loans receivable net chargeoff	(432)
Commercial and Industrial | Pass/Pass-Watch
Financing Receivable, Credit Quality Indicator [Line Items]
2023	177,864	368,778
2022	169,209	100,537
2021	84,198	39,577
2020	31,348	24,117
2019	9,971	7,342
Prior	12,920	12,282
Revolving Loans Amortized Cost Basis	242,044	205,951
Loans receivable	727,554	758,584
Commercial and Industrial | Special Mention
Financing Receivable, Credit Quality Indicator [Line Items]
2022	14,578	9,285
2020	102
2019		29
Prior	65	102
Revolving Loans Amortized Cost Basis	(1)	34,113
Loans receivable	14,744	43,529
Commercial and Industrial | Classified
Financing Receivable, Credit Quality Indicator [Line Items]
2023	329
2021		171
2020		1,097
2019	79	81
Prior	174	391
Revolving Loans Amortized Cost Basis	4,939	639
Loans receivable	5,521	2,379
Equipment Financing Agreements
Financing Receivable, Credit Quality Indicator [Line Items]
2023	216,062	305,879
2023 - YTD gross	178
2023 - YTD net	178
2022	215,399	167,855
2022 - YTD gross	3,944
2022 - YTD Net	3,744
2021	103,567	47,281
2021 - YTD gross	3,267
2021 - YTD net	2,858
2020	24,705	53,714
2020 - YTD gross	386
2020 - YTD net	244
2019	19,233	18,173
2019 - YTD gross	799
2019 - YTD net	250
Prior	3,249	1,886
Prior - Gross	232
Prior - Net	(114)
Loans receivable	582,215	594,788
Loans receivable gross chargeoff	8,806
Loans receivable net chargeoff	7,160
Equipment Financing Agreements | Pass/Pass-Watch
Financing Receivable, Credit Quality Indicator [Line Items]
2023	215,670	305,249
2022	211,228	165,313
2021	101,622	46,970
2020	24,340	52,133
2019	18,832	17,608
Prior	3,192	1,798
Loans receivable	574,884	589,071
Equipment Financing Agreements | Classified
Financing Receivable, Credit Quality Indicator [Line Items]
2023	392	630
2022	4,171	2,542
2021	1,945	311
2020	365	1,581
2019	401	565
Prior	57	88
Loans receivable	$ 7,331	$ 5,717

XML

Loans Receivable - Loans by Vintage Year and Payment Performance (Detail) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Financing Receivable, Credit Quality Indicator [Line Items]
2023	$ 1,447,774	$ 2,307,514
2022	1,766,797	1,432,869
2021	1,241,680	707,140
2020	647,431	495,373
2019	413,856	340,610
Prior	380,747	384,424
Revolving Loans Amortized Cost Basis	284,149	299,203
Loans receivable	6,182,434	5,967,133
2023 - YTD gross	178
2023 - YTD net	178
2022 - YTD gross	3,961
2022 - YTD Net	3,749
2021 - YTD gross	3,267
2021 - YTD net	2,851
2020 - YTD gross	797
2020 - YTD net	647
2019 - YTD gross	909
2019 - YTD net	351
Prior - Gross	858
Prior - Net	(6,823)
Revolving Loans Amortized Cost Basis - YTD gross	6,120
Revolving Loans Amortized Cost Basis - YTD net	6,090
Loans receivable gross chargeoff	16,090
Loans receivable net chargeoff	7,043
Performing
Financing Receivable, Credit Quality Indicator [Line Items]
2023	1,445,218	2,306,872
2022	1,762,626	1,430,327
2021	1,239,585	706,246
2020	647,031	493,777
2019	413,386	338,115
Prior	379,813	382,746
Revolving Loans Amortized Cost Basis	279,301	299,203
Loans receivable	6,166,960	5,957,286
Nonperforming
Financing Receivable, Credit Quality Indicator [Line Items]
2023	2,556	642
2022	4,171	2,542
2021	2,095	894
2020	400	1,596
2019	470	2,495
Prior	934	1,678
Revolving Loans Amortized Cost Basis	4,848
Loans receivable	15,474	9,847
Real Estate
Financing Receivable, Credit Quality Indicator [Line Items]
2023	1,053,519	1,632,857
2022	1,367,611	1,155,192
2021	1,053,915	620,111
2020	591,276	416,445
2019	384,573	314,985
Prior	364,339	369,763
Revolving Loans Amortized Cost Basis	37,167	58,500
Loans receivable	4,852,400	4,567,853
2020 - YTD gross	411
2020 - YTD net	403
Prior - Gross	216
Prior - Net	(88)
Loans receivable gross chargeoff	627
Loans receivable net chargeoff	315
Real Estate | Performing
Financing Receivable, Credit Quality Indicator [Line Items]
2023	1,051,684	1,632,845
2022	1,367,611	1,155,192
2021	1,053,765	619,699
2020	591,276	416,445
2019	384,492	313,055
Prior	363,555	368,409
Revolving Loans Amortized Cost Basis	37,167	58,500
Loans receivable	4,849,550	4,564,145
Real Estate | Nonperforming
Financing Receivable, Credit Quality Indicator [Line Items]
2023	1,835	12
2021	150	412
2019	81	1,930
Prior	784	1,354
Loans receivable	2,850	3,708
Real Estate | Total commercial property loans
Financing Receivable, Credit Quality Indicator [Line Items]
2023	691,284	1,185,208
2022	991,899	914,413
2021	866,991	607,009
2020	578,620	416,213
2019	384,356	314,254
Prior	244,602	234,501
Revolving Loans Amortized Cost Basis	31,642	52,578
Loans receivable	3,789,394	3,724,176
2020 - YTD gross	411
2020 - YTD net	403
Prior - Gross	216
Prior - Net	(81)
Loans receivable gross chargeoff	627
Loans receivable net chargeoff	322
Real Estate | Total commercial property loans | Performing
Financing Receivable, Credit Quality Indicator [Line Items]
2023	689,449	1,185,208
2022	991,899	914,413
2021	866,841	606,597
2020	578,620	416,213
2019	384,275	312,324
Prior	243,819	233,643
Revolving Loans Amortized Cost Basis	31,642	52,578
Loans receivable	3,786,545	3,720,976
Real Estate | Total commercial property loans | Nonperforming
Financing Receivable, Credit Quality Indicator [Line Items]
2023	1,835
2021	150
2019	81	1,930
Prior	783	496
Loans receivable	2,849	3,200
Real Estate | Construction
Financing Receivable, Credit Quality Indicator [Line Items]
2023	72,039	41,662
2022		67,543
2021	28,306
Loans receivable	100,345	109,205
Real Estate | Construction | Performing
Financing Receivable, Credit Quality Indicator [Line Items]
2023	72,039	41,662
2022		67,543
2021	28,306
Loans receivable	100,345	109,205
Real Estate | Construction | Nonperforming
Financing Receivable, Credit Quality Indicator [Line Items]
Loans receivable		422
Real Estate | Residential
Financing Receivable, Credit Quality Indicator [Line Items]
2023	290,196	405,987
2022	375,712	173,236
2021	158,618	13,102
2020	12,656	232
2019	217	731
Prior	119,737	135,262
Revolving Loans Amortized Cost Basis	5,525	5,922
Loans receivable	962,661	734,472
Prior - Net	(7)
Loans receivable net chargeoff	(7)
Real Estate | Residential | Performing
Financing Receivable, Credit Quality Indicator [Line Items]
2023	290,196	405,975
2022	375,712	173,236
2021	158,618	13,102
2020	12,656	232
2019	217	731
Prior	119,736	134,766
Revolving Loans Amortized Cost Basis	5,525	5,922
Loans receivable	962,660	733,964
Real Estate | Residential | Nonperforming
Financing Receivable, Credit Quality Indicator [Line Items]
2023		12
2021		412
Prior	1	858
Loans receivable	1
Real Estate | Residential/consumer loans | Nonperforming
Financing Receivable, Credit Quality Indicator [Line Items]
Loans receivable		508
Commercial and Industrial
Financing Receivable, Credit Quality Indicator [Line Items]
2023	178,193	368,778
2022	183,787	109,822
2021	84,198	39,748
2020	31,450	25,214
2019	10,050	7,452
Prior	13,159	12,775
Revolving Loans Amortized Cost Basis	246,982	240,703
Loans receivable	747,819	804,492
2022 - YTD gross	17
2022 - YTD Net	5
2021 - YTD net	(7)
2019 - YTD gross	110
2019 - YTD net	101
Prior - Gross	410
Prior - Net	(6,621)
Revolving Loans Amortized Cost Basis - YTD gross	6,120
Revolving Loans Amortized Cost Basis - YTD net	6,090
Loans receivable gross chargeoff	6,657
Loans receivable net chargeoff	(432)
Commercial and Industrial | Performing
Financing Receivable, Credit Quality Indicator [Line Items]
2023	177,864	368,778
2022	183,787	109,822
2021	84,198	39,577
2020	31,415	25,199
2019	10,050	7,452
Prior	13,066	12,539
Revolving Loans Amortized Cost Basis	242,134	240,703
Loans receivable	742,514	804,070
Commercial and Industrial | Nonperforming
Financing Receivable, Credit Quality Indicator [Line Items]
2023	329
2021		171
2020	35	15
Prior	93	236
Revolving Loans Amortized Cost Basis	4,848
Loans receivable	5,305
Equipment Financing Agreements
Financing Receivable, Credit Quality Indicator [Line Items]
2023	216,062	305,879
2022	215,399	167,855
2021	103,567	47,281
2020	24,705	53,714
2019	19,233	18,173
Prior	3,249	1,886
Loans receivable	582,215	594,788
2023 - YTD gross	178
2023 - YTD net	178
2022 - YTD gross	3,944
2022 - YTD Net	3,744
2021 - YTD gross	3,267
2021 - YTD net	2,858
2020 - YTD gross	386
2020 - YTD net	244
2019 - YTD gross	799
2019 - YTD net	250
Prior - Gross	232
Prior - Net	(114)
Loans receivable gross chargeoff	8,806
Loans receivable net chargeoff	7,160
Equipment Financing Agreements | Performing
Financing Receivable, Credit Quality Indicator [Line Items]
2023	215,670	305,249
2022	211,228	165,313
2021	101,622	46,970
2020	24,340	52,133
2019	18,844	17,608
Prior	3,192	1,798
Loans receivable	574,896	589,071
Equipment Financing Agreements | Nonperforming
Financing Receivable, Credit Quality Indicator [Line Items]
2023	392	630
2022	4,171	2,542
2021	1,945	311
2020	365	1,581
2019	389	565
Prior	57	88
Loans receivable	$ 7,319	$ 5,717

XML

Loans Receivable - Schedule of Amortized Cost Basis of Loans on Nonaccrual Status and Loans Past Due 90 Days and Still Accruing (Detail) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Financing Receivable Nonaccrual Status [Line Items]
Nonaccrual Loans With No Allowance for Credit Losses	$ 8,144	$ 3,192
Nonaccrual Loans With Allowance for Credit Losses	7,330	6,654
Total Nonperforming Loans	15,474	9,846
Real Estate
Financing Receivable Nonaccrual Status [Line Items]
Nonaccrual Loans With No Allowance for Credit Losses	2,361	2,977
Nonaccrual Loans With Allowance for Credit Losses	489	731
Total Nonperforming Loans	2,850	3,708
Real Estate | Retail
Financing Receivable Nonaccrual Status [Line Items]
Nonaccrual Loans With No Allowance for Credit Losses	1,717	1,929
Nonaccrual Loans With Allowance for Credit Losses	321
Total Nonperforming Loans	2,038	1,929
Real Estate | Hospitality
Financing Receivable Nonaccrual Status [Line Items]
Nonaccrual Loans With No Allowance for Credit Losses	338
Nonaccrual Loans With Allowance for Credit Losses	150
Total Nonperforming Loans	488
Real Estate | Other
Financing Receivable Nonaccrual Status [Line Items]
Nonaccrual Loans With No Allowance for Credit Losses	305	540
Nonaccrual Loans With Allowance for Credit Losses	18	731
Total Nonperforming Loans	323	1,271
Real Estate | Total commercial property loans
Financing Receivable Nonaccrual Status [Line Items]
Nonaccrual Loans With No Allowance for Credit Losses	2,360	2,469
Nonaccrual Loans With Allowance for Credit Losses	489	731
Total Nonperforming Loans	2,849	3,200
Real Estate | Residential
Financing Receivable Nonaccrual Status [Line Items]
Nonaccrual Loans With No Allowance for Credit Losses	1	508
Total Nonperforming Loans	1	508
Commercial and Industrial
Financing Receivable Nonaccrual Status [Line Items]
Nonaccrual Loans With No Allowance for Credit Losses	5,213
Nonaccrual Loans With Allowance for Credit Losses	92	422
Total Nonperforming Loans	5,305	422
Equipment Financing Agreements
Financing Receivable Nonaccrual Status [Line Items]
Nonaccrual Loans With No Allowance for Credit Losses	570	215
Nonaccrual Loans With Allowance for Credit Losses	6,749	5,501
Total Nonperforming Loans	$ 7,319	$ 5,716

XML

Loans Receivable - Analysis of Past Due Loans, Disaggregated by Loan Class, Non-PCI (Detail) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Financing Receivable, Past Due [Line Items]
Total Loans	$ 6,182,434	$ 5,967,133
Real Estate
Financing Receivable, Past Due [Line Items]
Total Loans	4,852,400	4,567,853
Real Estate | Retail
Financing Receivable, Past Due [Line Items]
Total Loans	1,107,360	1,023,608
Real Estate | Hospitality
Financing Receivable, Past Due [Line Items]
Total Loans	740,519	646,893
Real Estate | Office
Financing Receivable, Past Due [Line Items]
Total Loans	574,981	499,946
Real Estate | Other
Financing Receivable, Past Due [Line Items]
Total Loans	1,366,534	1,553,729
Real Estate | Total commercial property loans
Financing Receivable, Past Due [Line Items]
Total Loans	3,789,394	3,724,176
Real Estate | Construction
Financing Receivable, Past Due [Line Items]
Total Loans	100,345	109,205
Real Estate | Residential
Financing Receivable, Past Due [Line Items]
Total Loans	962,661	734,472
Real Estate | 30-59 Days Past Due | Retail
Financing Receivable, Past Due [Line Items]
Past due loans receivable	632
Real Estate | 30-59 Days Past Due | Other
Financing Receivable, Past Due [Line Items]
Past due loans receivable	592
Real Estate | 30-59 Days Past Due | Residential
Financing Receivable, Past Due [Line Items]
Past due loans receivable	521
Real Estate | 60-89 Days Past Due | Hospitality
Financing Receivable, Past Due [Line Items]
Past due loans receivable	150
Real Estate | 60-89 Days Past Due | Residential
Financing Receivable, Past Due [Line Items]
Past due loans receivable	336
Real Estate | 90 Days or More Past Due | Hospitality
Financing Receivable, Past Due [Line Items]
Past due loans receivable	22
Real Estate | 90 Days or More Past Due | Residential
Financing Receivable, Past Due [Line Items]
Past due loans receivable	1
Real Estate | Current | Construction
Financing Receivable, Past Due [Line Items]
Total Loans	100,345
Real Estate | Current | Residential
Financing Receivable, Past Due [Line Items]
Total Loans	962,661
Commercial and Industrial
Financing Receivable, Past Due [Line Items]
Total Loans	747,819	804,492
Commercial and Industrial | 30-59 Days Past Due
Financing Receivable, Past Due [Line Items]
Past due loans receivable	76
Commercial and Industrial | 60-89 Days Past Due
Financing Receivable, Past Due [Line Items]
Past due loans receivable	120
Commercial and Industrial | 90 Days or More Past Due
Financing Receivable, Past Due [Line Items]
Past due loans receivable	5,178
Equipment Financing Agreements
Financing Receivable, Past Due [Line Items]
Total Loans	582,215	594,788
Equipment Financing Agreements | 30-59 Days Past Due
Financing Receivable, Past Due [Line Items]
Past due loans receivable	7,138
Equipment Financing Agreements | 60-89 Days Past Due
Financing Receivable, Past Due [Line Items]
Past due loans receivable	2,134
Equipment Financing Agreements | 90 Days or More Past Due
Financing Receivable, Past Due [Line Items]
Past due loans receivable	4,551
Non-PCI Loans
Financing Receivable, Past Due [Line Items]
Past due loans receivable	21,451	11,819
Non-PCI Loans | 30-59 Days Past Due
Financing Receivable, Past Due [Line Items]
Past due loans receivable	8,959	6,215
Non-PCI Loans | 60-89 Days Past Due
Financing Receivable, Past Due [Line Items]
Past due loans receivable	2,740	2,648
Non-PCI Loans | 90 Days or More Past Due
Financing Receivable, Past Due [Line Items]
Past due loans receivable	9,752	2,956
Non-PCI Loans | Current
Financing Receivable, Past Due [Line Items]
Total Loans	6,160,983	5,955,314
Non-PCI Loans | Real Estate
Financing Receivable, Past Due [Line Items]
Past due loans receivable	2,254	1,618
Non-PCI Loans | Real Estate | Retail
Financing Receivable, Past Due [Line Items]
Past due loans receivable	632
Non-PCI Loans | Real Estate | Hospitality
Financing Receivable, Past Due [Line Items]
Past due loans receivable	172
Non-PCI Loans | Real Estate | Other
Financing Receivable, Past Due [Line Items]
Past due loans receivable	592	494
Non-PCI Loans | Real Estate | Total commercial property loans
Financing Receivable, Past Due [Line Items]
Past due loans receivable	1,396	494
Non-PCI Loans | Real Estate | Residential
Financing Receivable, Past Due [Line Items]
Past due loans receivable	858	1,124
Non-PCI Loans | Real Estate | 30-59 Days Past Due
Financing Receivable, Past Due [Line Items]
Past due loans receivable	1,745	313
Non-PCI Loans | Real Estate | 30-59 Days Past Due | Total commercial property loans
Financing Receivable, Past Due [Line Items]
Past due loans receivable	1,224
Non-PCI Loans | Real Estate | 30-59 Days Past Due | Residential
Financing Receivable, Past Due [Line Items]
Past due loans receivable		313
Non-PCI Loans | Real Estate | 60-89 Days Past Due
Financing Receivable, Past Due [Line Items]
Past due loans receivable	486	1,298
Non-PCI Loans | Real Estate | 60-89 Days Past Due | Other
Financing Receivable, Past Due [Line Items]
Past due loans receivable		494
Non-PCI Loans | Real Estate | 60-89 Days Past Due | Total commercial property loans
Financing Receivable, Past Due [Line Items]
Past due loans receivable	150	494
Non-PCI Loans | Real Estate | 60-89 Days Past Due | Residential
Financing Receivable, Past Due [Line Items]
Past due loans receivable		804
Non-PCI Loans | Real Estate | 90 Days or More Past Due
Financing Receivable, Past Due [Line Items]
Past due loans receivable	23	7
Non-PCI Loans | Real Estate | 90 Days or More Past Due | Total commercial property loans
Financing Receivable, Past Due [Line Items]
Past due loans receivable	22
Non-PCI Loans | Real Estate | 90 Days or More Past Due | Residential
Financing Receivable, Past Due [Line Items]
Past due loans receivable		7
Non-PCI Loans | Real Estate | Current
Financing Receivable, Past Due [Line Items]
Total Loans	4,850,146	4,566,235
Non-PCI Loans | Real Estate | Current | Retail
Financing Receivable, Past Due [Line Items]
Total Loans	1,106,728	1,023,608
Non-PCI Loans | Real Estate | Current | Hospitality
Financing Receivable, Past Due [Line Items]
Total Loans	740,347	646,893
Non-PCI Loans | Real Estate | Current | Office
Financing Receivable, Past Due [Line Items]
Total Loans	574,981	499,946
Non-PCI Loans | Real Estate | Current | Other
Financing Receivable, Past Due [Line Items]
Total Loans	1,365,942	1,553,235
Non-PCI Loans | Real Estate | Current | Total commercial property loans
Financing Receivable, Past Due [Line Items]
Total Loans	3,787,998	3,723,682
Non-PCI Loans | Real Estate | Current | Construction
Financing Receivable, Past Due [Line Items]
Total Loans	100,345	109,205
Non-PCI Loans | Real Estate | Current | Residential
Financing Receivable, Past Due [Line Items]
Total Loans	961,803	733,348
Non-PCI Loans | Commercial and Industrial
Financing Receivable, Past Due [Line Items]
Past due loans receivable	5,374	156
Non-PCI Loans | Commercial and Industrial | 30-59 Days Past Due
Financing Receivable, Past Due [Line Items]
Past due loans receivable		77
Non-PCI Loans | Commercial and Industrial | 60-89 Days Past Due
Financing Receivable, Past Due [Line Items]
Past due loans receivable		79
Non-PCI Loans | Commercial and Industrial | Current
Financing Receivable, Past Due [Line Items]
Total Loans	742,445	804,336
Non-PCI Loans | Equipment Financing Agreements
Financing Receivable, Past Due [Line Items]
Past due loans receivable	13,823	10,045
Non-PCI Loans | Equipment Financing Agreements | 30-59 Days Past Due
Financing Receivable, Past Due [Line Items]
Past due loans receivable		5,825
Non-PCI Loans | Equipment Financing Agreements | 60-89 Days Past Due
Financing Receivable, Past Due [Line Items]
Past due loans receivable		1,271
Non-PCI Loans | Equipment Financing Agreements | 90 Days or More Past Due
Financing Receivable, Past Due [Line Items]
Past due loans receivable		2,949
Non-PCI Loans | Equipment Financing Agreements | Current
Financing Receivable, Past Due [Line Items]
Total Loans	$ 568,392	$ 584,743

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Loans Receivable - Non-Accrual Loans, Disaggregated by Loan Class (Detail) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Financing Receivable, Past Due [Line Items]
Total nonaccrual loans	$ 15,474	$ 9,846

XML

Loans Receivable - Non-Performing Assets (Detail) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Receivables [Abstract]
Total nonaccrual loans	$ 15,474	$ 9,846
Total Nonperforming Loans	15,474	9,846
Other real estate owned ("OREO")	117	117
Total nonperforming assets	$ 15,591	$ 9,963

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Servicing Assets - Summary of Changes in Servicing Assets (Detail) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Transfers and Servicing [Abstract]
Balance at beginning of period	$ 7,176	$ 7,080
Additions related to sale of SBA loans	1,965	3,153
Amortization	(2,456)	(2,672)
Change in valuation allowance	385	(385)
Balance at end of period	$ 7,070	$ 7,176

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Servicing Assets - Additional Information (Detail) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Risks Inherent In Servicing Assets And Servicing Liabilities [Line Items]
Serviced loans sold to unaffiliated parties	$ 539.6	$ 523.6
Servicing fee income	$ 5.2	$ 4.9	$ 4.6
Contractually Specified Servicing Fee Income, Statement of Income or Comprehensive Income [Extensible Enumeration]	Noninterest Income, Other Operating Income	Noninterest Income, Other Operating Income	Noninterest Income, Other Operating Income
Fair value of servicing rights	$ 7.7	$ 7.1
Minimum
Risks Inherent In Servicing Assets And Servicing Liabilities [Line Items]
Discount rates ranging	14.40%	21.90%
Prepayment speeds	12.20%	10.80%
Maximum
Risks Inherent In Servicing Assets And Servicing Liabilities [Line Items]
Discount rates ranging	24.70%	25.30%
Prepayment speeds	19.70%	16.70%

XML

Premises and Equipment - Summary of Major Components of Premises and Equipment (Detail) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Property, Plant and Equipment [Line Items]
Premises and equipment, gross	$ 66,942	$ 68,112
Accumulated depreciation and amortization	(44,983)	(45,262)
Total premises and equipment, net	21,959	22,850
Land
Property, Plant and Equipment [Line Items]
Premises and equipment, gross	5,319	6,850
Buildings and improvements
Property, Plant and Equipment [Line Items]
Premises and equipment, gross	9,420	12,643
Furniture and equipment
Property, Plant and Equipment [Line Items]
Premises and equipment, gross	31,014	30,341
Leasehold improvements
Property, Plant and Equipment [Line Items]
Premises and equipment, gross	20,130	18,246
Fixed assets in process
Property, Plant and Equipment [Line Items]
Premises and equipment, gross	$ 1,059	$ 32

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Premises and Equipment - Additional Information (Detail) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Property, Plant and Equipment [Abstract]
Depreciation and amortization expense	$ 3.3	$ 3.9	$ 4.4

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Leases - Additional Information (Detail) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Lessee, Lease, Description [Line Items]
Right-of-use assets	$ 42,400	$ 40,400
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration]	Prepaid expenses and other assets	Prepaid expenses and other assets
Total lease liabilities - Operating leases	$ 46,402	$ 44,200
Operating Lease, Liability, Statement of Financial Position [Extensible List]	us-gaap:AccountsPayableAndAccruedLiabilitiesCurrentAndNoncurrent	us-gaap:AccountsPayableAndAccruedLiabilitiesCurrentAndNoncurrent
Net rental expenses	$ 8,800	$ 8,300	$ 8,500
Weighted average remaining lease term	6 years 9 months 25 days	7 years 1 month 13 days
Weighted average discount rate (percent)	2.98%	2.42%
Operating lease costs	$ 8,700	$ 7,900	8,100
Cash paid for amounts included in the measurement of Company's operating lease liabilities	$ 8,700	$ 8,000	$ 8,000
Minimum
Lessee, Lease, Description [Line Items]
Operating lease remaining term	4 months
Maximum
Lessee, Lease, Description [Line Items]
Finance lease remaining term	10 years 1 month
Operating lease extension term	5 years
Finance lease extension term	5 years

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Leases - Future Minimum Annual Rental Commitments Under Non-Cancelable Operating Leases (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Leases [Abstract]
2024	$ 8,861
2025	8,052
2026	6,898
2027	6,576
2028	6,145
Thereafter	14,927
Remaining lease commitments	51,459
Interest	(5,057)
Present value of lease liability	$ 46,402	$ 44,200

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Goodwill and Other Intangibles - Additional Information (Detail) - USD ($)			12 Months Ended
	Oct. 27, 2016	Aug. 31, 2014	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Finite-Lived Intangible Assets [Line Items]
Goodwill impairment			$ 0
Impairment of goodwill and other intangible assets			$ 0
Goodwill and other intangible assets triggering event			No triggering event occurred as of, or subsequent to December 31, 2023, that would require a reassessment of goodwill and other intangible assets.
Intangible asset impairment charges			$ 0	$ 0	$ 0
CBI Merger
Finite-Lived Intangible Assets [Line Items]
Goodwill	$ 11,000,000.0
CBI Merger | Third-party originators intangible
Finite-Lived Intangible Assets [Line Items]
Intangible assets acquired	$ 483,000
CBI Merger | Core deposit intangible
Finite-Lived Intangible Assets [Line Items]
Intangible assets acquired		$ 2,200,000

XML

Goodwill and Other Intangibles - Summary of Other Intangible Assets (Detail) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Acquired Finite-Lived Intangible Assets [Line Items]
Accumulated amortization	$ (2,628)	$ (2,502)
Goodwill	11,031	11,031
Gross carrying amount	13,727	13,727
Net carrying amount	$ 11,099	11,225
Core deposit intangible
Acquired Finite-Lived Intangible Assets [Line Items]
Amortization Period	10 years
Gross carrying amount, excluding goodwill	$ 2,213	2,213
Accumulated amortization	(2,145)	(2,031)
Net carrying amount, excluding goodwill	$ 68	182
Third-party originators intangible
Acquired Finite-Lived Intangible Assets [Line Items]
Amortization Period	7 years
Gross carrying amount, excluding goodwill	$ 483	483
Accumulated amortization	$ (483)	(471)
Net carrying amount, excluding goodwill		$ 12

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Deposits - Additional Information (Detail) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items]
Time Deposits	$ 2,454,867
Accrued interest payable on deposits	39,200	$ 7,800
Total deposits reclassified to loans due to overdrafts	1,600	1,200
Time Deposits More Than $250,000
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items]
Time Deposits	$ 1,000,021	$ 697,000

XML

Deposits - Scheduled Maturities of Time Deposits (Detail) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Restricted Cash And Cash Equivalents Items [Line Items]
2024	$ 2,440,339
2025	10,133
2026	3,405
2027	572
2028 & thereafter	418
Total	2,454,867
Time Deposits More Than $250,000
Restricted Cash And Cash Equivalents Items [Line Items]
2024	995,830
2025	3,928
2026	263
Total	1,000,021	$ 697,000
Other Time Deposits
Restricted Cash And Cash Equivalents Items [Line Items]
2024	1,444,509
2025	6,205
2026	3,142
2027	572
2028 & thereafter	418
Total	$ 1,454,846

XML

Deposits - Summary of Interest Expense on Deposits (Detail) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Interest Expense, Deposits [Abstract]
Demand: interest-bearing	$ 117	$ 100	$ 61
Money market and savings	44,066	12,753	5,199
Time deposits more than $250,000	42,762	4,457	726
Other time deposits	47,763	8,628	5,669
Total interest expense on deposits	$ 134,708	$ 25,938	$ 11,655

XML

Borrowings - Schedule of Borrowings (Detail) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Outstanding Balance
Open advances	$ 212,500	$ 250,000
Outstanding advances	$ 325,000	$ 350,000
Weighted Average Rate
Open advances (percent)	5.70%	4.65%
Outstanding advances (percent)	4.69%	3.57%	1.05%
FHLB of San Francisco
Outstanding Balance
Open advances	$ 212,500	$ 250,000
Advances due within 12 months	37,500	50,000
Advances due over 12 months through 24 months	12,500	37,500
Advances due over 24 months through 36 months	62,500	12,500
Outstanding advances	$ 325,000	$ 350,000
Weighted Average Rate
Open advances (percent)	5.70%	4.65%
Advances due within 12 months (percent)	0.40%	0.97%
Advances due over 12 months through 24 months (percent)	1.90%	0.40%
Advances due over 24 months through 36 months (percent)	4.37%	1.90%
Outstanding advances (percent)	4.69%	3.57%

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Borrowings - Summary of Financial Data Pertaining to Federal Home Loan Bank Advances (Detail) - USD ($)	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Federal Home Loan Banks [Abstract]
Weighted-average interest rate at end of year	4.69%	3.57%	1.05%
Weighted-average interest rate during the year	3.48%	1.52%	1.17%
Average balance of FHLB advances	$ 197,390,000	$ 148,027,000	$ 145,277,000
Maximum amount outstanding at any month-end	$ 450,000,000	$ 350,000,000	$ 162,500,000

XML

Borrowings - Additional Information (Detail) - USD ($)	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Debt Disclosure [Abstract]
Pledged loans receivable, carrying value	$ 2,360,000,000
Total borrowing capacity available from the collateral	1,540,000,000
Remaining available borrowing capacity	1,090,000,000.00
Available for use through the Federal Reserve Bank of San Francisco discount window	23,200,000	$ 22,000,000
Pledged loans, carrying values	24,800,000	23,400,000
Outstanding borrowing capacity	0	0
Borrowings	0
Advances from the FHLB	325,000,000	350,000,000.0
Decrease in the advances from the FHLB		25,000,000
Open advances	212,500,000	250,000,000
Term borrowings	112,500,000	100,000,000
Interest expense on FHLB	$ 6,900,000	$ 2,200,000	$ 1,700,000
FHLB, advances, weighted average interest rate	4.69%	3.57%
FHLB, advances, weighted-average interest rate during the year	3.48%	1.52%	1.17%
Open advances (percent)	5.70%	4.65%
Weighted average interest rate of outstanding advances (percent)	2.77%	0.87%

XML

Subordinated Debentures - Additional Information (Detail) - USD ($)			1 Months Ended	12 Months Ended
	Aug. 20, 2021	Mar. 21, 2017	Dec. 31, 2005	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2014
Debt Instrument [Line Items]
Subordinated debentures issued				$ 136,800,000	$ 136,800,000
Debt instrument, maturity date	Sep. 01, 2031	Mar. 30, 2027
Amortization of debt issuance costs	$ 2,100,000
2031 Notes
Debt Instrument [Line Items]
Subordinated debentures issued	$ 110,000,000.0
Fixed interest rate	3.75%
Amortization of debt issuance costs				183,000,000	176,000,000	$ 62,000,000
Debt issuance costs, net				108,300,000	108,200,000
2031 Notes | Benchmark Rate
Debt Instrument [Line Items]
Basis spread	3.10%
2017 Notes
Debt Instrument [Line Items]
Subordinated debentures issued		$ 100,000,000.0
Fixed interest rate		5.45%
Debt issuance cost		$ 2,300,000
Debt outstanding, net of issuance cost				$ 108,300,000	108,200,000
2017 Notes | 3-month London Interbank Offered Rate (LIBOR)
Debt Instrument [Line Items]
Basis spread		3.315%
Subordinated debentures
Debt Instrument [Line Items]
Amortization of debt issuance costs					1,100,000	300,000
Subordinated debentures | Central Bancorp, Inc
Debt Instrument [Line Items]
Subordinated debentures issued			$ 26,000,000.0
Debt instrument, maturity date				Mar. 15, 2036
Fixed interest rate			6.26%	7.05%
Debt outstanding, net of issuance cost				$ 21,700,000	21,200,000
Unpaid principal balance							$ 26,800,000
Estimated fair value							18,500,000
Debt instrument discount				$ 5,100,000	5,600,000		$ 8,300,000
Frequency of interest payment				quarterly
Term for the initial fixed interest rate				5 years
Variable interest rate basis				three-month LIBOR plus 140 basis points
Amortization of subordinated debentures				$ 420,000	$ 412,000	$ 402,000
Optional interest payment deferral period (not to exceed)				5 years
Subordinated debentures | 3-month London Interbank Offered Rate (LIBOR) | Central Bancorp, Inc
Debt Instrument [Line Items]
Basis spread			140.00%
Subordinated debentures | Three Month Secured Overnight Financing Rate SOFR | Central Bancorp, Inc
Debt Instrument [Line Items]
Basis spread				166.00%
2027 Notes
Debt Instrument [Line Items]
Percentage of redemption price of outstanding principal amount.					100.00%
Unamortized debt issuance cost					$ 1,100,000
Credit Spread [Member] | Subordinated debentures | Three Month Secured Overnight Financing Rate SOFR | Central Bancorp, Inc
Debt Instrument [Line Items]
Basis spread				140.00%
Three Month Libor To Three Month Sofr [Member] | Subordinated debentures | Three Month Secured Overnight Financing Rate SOFR | Central Bancorp, Inc
Debt Instrument [Line Items]
Basis spread				26.00%

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Income Taxes - Reconciliation of Unrecognized Tax Benefits (Detail) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward]
Unrecognized tax benefits at beginning of year	$ 258	$ 258	$ 0
Gross increase for new tax positions	0	0	258
Unrecognized tax benefits at end of year	$ 258	$ 258	$ 258

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Income Taxes - Additional Information (Detail) - USD ($)	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Operating Loss Carryforwards [Line Items]
Unrecognized tax benefits	$ 0	$ 0
Unrecognized tax benefits that would affect our effective tax rate if recognized	258,000	258,000	$ 258,000
Accrued interest	71,000	33,000
Penalties accrued	112,000	44,000
Increase in unrecognized tax benefits due to state taxes			258,000
Valuation allowance	1,864,000	$ 1,276,000	$ 1,644,000
Federal and state income tax	190,900,000
Low income housing tax credit	0
Federal
Operating Loss Carryforwards [Line Items]
Net operating loss carryforwards	7,200,000
State | California
Operating Loss Carryforwards [Line Items]
Net operating loss carryforwards	128,900,000
State | Illinois
Operating Loss Carryforwards [Line Items]
Net operating loss carryforwards	$ 62,000,000

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Income Taxes - Summary of Provision for Income Taxes (Detail) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Current expense:
Federal	$ 26,336	$ 1,310	$ 21,805
State	13,610	304	10,901
Total current expense	39,946	1,614	32,706
Deferred expense (benefit):
Federal	(4,980)	27,674	4,914
State	(426)	10,045	(803)
Total deferred expense	(5,406)	37,719	4,111
Income tax expense	$ 34,540	$ 39,333	$ 36,817

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Income Taxes - Summary of Deferred Tax Assets and Liabilities (Detail) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Deferred tax assets:
Provision for credit losses	$ 20,745	$ 21,626	$ 21,671
Purchase accounting	1,467	2,149	3,360
Net operating loss carryforward	13,712	14,590	15,316
Unrealized loss on securities available for sale	29,120	35,973	3,421
Lease liability	13,729	13,029	14,712
Tax credits		1,711
State taxes	2,741	54	2,318
Other	4,283	3,793	4,032
Total deferred tax assets	85,797	92,925	64,830
Deferred tax liabilities:
Mark to market	(32,992)	(38,916)	(3,531)
Depreciation	(333)	(1,292)	(1,292)
Leases - right of use assets	(12,592)	(11,932)	(13,738)
Other	(2,790)	(2,836)	(2,650)
Total deferred tax liabilities	(48,707)	(54,976)	(21,211)
Valuation allowance	(1,864)	(1,276)	(1,644)
Net deferred tax assets	$ 35,226	$ 36,673	$ 41,975

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Income Taxes - Reconciliation between Federal Statutory Income Tax Rate and Effective Tax Rate (Detail)	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Income Tax Disclosure [Abstract]
Federal statutory income tax rate	21.00%	21.00%	21.00%
State taxes, net of federal tax benefits	9.06%	7.33%	5.81%
Tax credit - federal	(1.52%)	(1.30%)	(1.16%)
Low-income housing amortization	1.64%	1.34%	1.37%
Other	(0.03%)	(0.42%)	0.16%
Effective tax rate	30.15%	27.95%	27.18%

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Accumulated Other Comprehensive Income (Loss) - Activity in Accumulated Other Comprehensive Income (Detail) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward]
Other comprehensive income (loss) before reclassification	$ 306
Balance at beginning of period	(35,973)
Balance at end of period	(29,058)	$ (35,973)
Balance at beginning of period	637,515	643,417	$ 577,044
Other comprehensive income (loss), net of tax	17,057	(80,542)	(11,519)
Balance at end of period	701,891	637,515	643,417
Unrealized Gains and Losses on Available for Sale Securities
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward]
Balance at beginning of period	(124,958)	(11,864)	4,323
Other comprehensive income (loss) before reclassification	21,795	(113,094)	(16,686)
Reclassification from accumulated other comprehensive income	1,871		499
Net current period other comprehensive income	23,666	(113,094)	(16,187)
Balance at end of period	(101,292)	(124,958)	(11,864)
Unrealized Gains and Losses on Cash Flow Hedge
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward]
Other comprehensive income (loss) before reclassification	306
Net current period other comprehensive income	306
Balance at end of period	306
Tax Benefit (Expense)
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward]
Balance at beginning of period	35,973	3,421	(1,247)
Other comprehensive income (loss) before reclassification	(6,351)	32,552	4,668
Reclassification from accumulated other comprehensive income	(564)
Net current period other comprehensive income	(6,915)	32,552	4,668
Balance at end of period	29,058	35,973	3,421
Accumulated Other Comprehensive Income (Loss)
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward]
Balance at beginning of period	(88,985)	(8,443)	3,076
Other comprehensive income (loss) before reclassification	15,750	(80,542)	(12,018)
Reclassification from accumulated other comprehensive income	1,307		499
Other comprehensive income (loss), net of tax	17,057	(80,542)	(11,519)
Balance at end of period	$ (71,928)	$ (88,985)	$ (8,443)

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Accumulated Other Comprehensive Income (Loss) - Additional Information (Detail) - USD ($)	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Accumulated Other Comprehensive Income Loss [Line Items]
Net gain (loss) on sales of securities	$ (1,871,000)		$ (499,000)
Net unrealized gains (losses) recorded in comprehensive income	(1,700,000)	$ 1,700,000	(100,000)	$ 100,000
Sale of securities	8,149,000	$ 0	55,884,000
Unrealized Gains and Losses on Available for Sale Securities | Reclassification out of Accumulated Other Comprehensive Income
Accumulated Other Comprehensive Income Loss [Line Items]
Net gain (loss) on sales of securities	$ 1,900,000		$ 500,000

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Regulatory Matters - Additional Information (Detail)	Dec. 31, 2023	Dec. 31, 2022	Jan. 01, 2019
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items]
Minimum ratio of qualifying total capital to risk-weighted assets	0.0800
Minimum ratio of Tier 1 capital to risk-weighted assets	0.0600
Leverage ratio	0.0400
Minimum ratio of qualifying total capital to risk-weighted assets for well capitalized	0.1000
Minimum ratio of Tier 1 capital to average assets for well capitalized	0.0800
Capital conservation buffer (percent)	6.20%	5.71%	2.50%
Hanmi Bank
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items]
Minimum ratio of qualifying total capital to risk-weighted assets	0.08	0.08
Minimum ratio of Tier 1 capital to risk-weighted assets	0.06	0.06
Leverage ratio	0.04	0.04
Minimum ratio of qualifying total capital to risk-weighted assets for well capitalized	0.10	0.10
Minimum ratio of Tier 1 capital to average assets for well capitalized	0.08	0.08
Capital conservation buffer (percent)	6.27%	5.86%
Depository Institutions
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items]
Leverage ratio	0.0500

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Regulatory Matters - Capital Ratios of Hanmi Financial and Bank (Detail) $ in Thousands	Dec. 31, 2023 USD ($)	Dec. 31, 2022 USD ($)
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items]
Minimum Regulatory Requirement Ratio for Total capital to risk-weighted assets	0.0800
Minimum Regulatory Requirement Ratio for Tier 1 capital to risk-weighted assets	0.0600
Minimum Regulatory Requirement Ratio for Tier 1 capital to average assets	0.0400
Minimum to Be Categorized as Well Capitalized Ratio, Total capital to risk-weighted assets	0.1000
Minimum to Be Categorized as Well Capitalized Ratio, Tier 1 capital to risk-weighted assets	0.0800
Hanmi Financial
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items]
Actual Capital, Total capital to risk-weighted assets	$ 947,286	$ 901,239
Actual Capital, Tier 1 capital to risk-weighted assets	773,179	728,344
Actual Capital, Common equity Tier 1 capital to risk-weighted assets	751,516	707,101
Actual Capital, Tier 1 capital to average assets	$ 773,179	$ 728,344
Actual Capital Ratio, Total capital to risk-weighted assets	0.1495	0.1449
Actual Capital Ratio, Tier 1 capital to risk-weighted assets	0.122	0.1171
Actual Capital Ratio, Common equity Tier 1 capital to risk-weighted assets	0.1186	0.1137
Actual Capital Ratio, Tier 1 capital to average assets	0.1037	0.1007
Minimum Regulatory Requirement Capital, Total capital to risk-weighted assets	$ 506,891	$ 497,508
Minimum Regulatory Requirement Capital, Tier 1 capital to risk-weighted assets	380,168	373,131
Minimum Regulatory Requirement Capital, Common equity Tier 1 capital to risk-weighted assets	285,126	279,848
Minimum Regulatory Requirement Capital, Tier 1 capital to average assets	$ 298,277	$ 289,311
Minimum Regulatory Requirement Ratio for Total capital to risk-weighted assets	0.08	0.08
Minimum Regulatory Requirement Ratio for Tier 1 capital to risk-weighted assets	0.06	0.06
Minimum Regulatory Requirement Ratio for Common equity Tier 1 capital to risk-weighted assets	4.50%	4.50%
Minimum Regulatory Requirement Ratio for Tier 1 capital to average assets	0.04	0.04
Hanmi Bank
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items]
Actual Capital, Total capital to risk-weighted assets	$ 904,153	$ 860,503
Actual Capital, Tier 1 capital to risk-weighted assets	840,046	797,608
Actual Capital, Common equity Tier 1 capital to risk-weighted assets	840,046	797,608
Actual Capital, Tier 1 capital to average assets	$ 840,046	$ 797,608
Actual Capital Ratio, Total capital to risk-weighted assets	0.1427	0.1386
Actual Capital Ratio, Tier 1 capital to risk-weighted assets	0.1326	0.1285
Actual Capital Ratio, Common equity Tier 1 capital to risk-weighted assets	0.1326	0.1285
Actual Capital Ratio, Tier 1 capital to average assets	0.1132	0.1107
Minimum Regulatory Requirement Capital, Total capital to risk-weighted assets	$ 506,741	$ 496,607
Minimum Regulatory Requirement Capital, Tier 1 capital to risk-weighted assets	380,056	372,455
Minimum Regulatory Requirement Capital, Common equity Tier 1 capital to risk-weighted assets	285,042	279,341
Minimum Regulatory Requirement Capital, Tier 1 capital to average assets	$ 296,948	$ 288,110
Minimum Regulatory Requirement Ratio for Total capital to risk-weighted assets	0.08	0.08
Minimum Regulatory Requirement Ratio for Tier 1 capital to risk-weighted assets	0.06	0.06
Minimum Regulatory Requirement Ratio for Common equity Tier 1 capital to risk-weighted assets	4.50%	4.50%
Minimum Regulatory Requirement Ratio for Tier 1 capital to average assets	0.04	0.04
Minimum to Be Categorized as Well Capitalized Capital, Total capital to risk-weighted assets	$ 633,426	$ 620,758
Minimum to Be Categorized as Well Capitalized Capital, Tier 1 capital to risk-weighted assets	506,741	496,607
Minimum to Be Categorized as Well Capitalized Capital, Common equity Tier 1 capital to risk-weighted average	411,727	403,493
Minimum to Be Categorized as Well Capitalized Capital, Tier 1 capital to average assets	$ 371,185	$ 360,137
Minimum to Be Categorized as Well Capitalized Ratio, Total capital to risk-weighted assets	0.10	0.10
Minimum to Be Categorized as Well Capitalized Ratio, Tier 1 capital to risk-weighted assets	0.08	0.08
Minimum to Be Categorized as Well Capitalized Ratio, Common equity Tier 1 capital to risk-weighted assets	6.50%	6.50%
Minimum to Be Categorized as Well Capitalized Ratio, Tier 1 capital to average assets	0.05	0.05

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Fair Value Measurements - Additional Information (Detail)	Dec. 31, 2023 USD ($)
Minimum
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Unpaid principal balance of Non-accrual Non-PCI loans individually evaluated for amount of impairment	$ 250,000
Maximum
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Unpaid principal balance of Non-accrual Non-PCI loans and leases reviewed collectively	$ 250,000

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Fair Value Measurements - Assets and Liabilities Measured at Fair Value on Recurring Basis (Detail) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	$ 865,739	$ 853,838
Derivative Asset, Statement of Financial Position [Extensible Enumeration]	Prepaid Expense and Other Assets	Prepaid Expense and Other Assets
Derivative Liability, Statement of Financial Position [Extensible Enumeration]	Accrued Liabilities and Other Liabilities	Accrued Liabilities and Other Liabilities
U.S. Treasury securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	$ 85,488	$ 48,026
Collateralized mortgage obligations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	97,411	85,485
Debt securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	124,625	138,499
Total U.S. government agency and sponsored agency obligations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	712,355	740,428
Municipal bonds-tax exempt
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	67,896	65,384
Recurring Basis
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	865,739	853,838
Recurring Basis | U.S. Treasury securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	85,488	48,026
Recurring Basis | Derivative financial instruments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative financial instruments, Assets	5,920	7,507
Derivative financial instruments, Liabilities	6,245	7,375
Recurring Basis | Collateralized mortgage obligations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	97,411	85,485
Recurring Basis | Debt securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	124,625	138,499
Recurring Basis | Total U.S. government agency and sponsored agency obligations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	712,355	740,428
Recurring Basis | Municipal bonds-tax exempt
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	67,896	65,384
Recurring Basis | Mortgage-backed securities - commercial | Mortgage-backed securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	47,991	51,292
Recurring Basis | Mortgage-backed securities - residential | Mortgage-backed securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	442,328	465,152
Recurring Basis | Quoted Prices in Active Markets for Identical Assets
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	85,488	48,026
Recurring Basis | Quoted Prices in Active Markets for Identical Assets | U.S. Treasury securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	85,488	48,026
Recurring Basis | Quoted Prices in Active Markets for Identical Assets | Derivative financial instruments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative financial instruments, Assets	0	0
Derivative financial instruments, Liabilities	0	0
Recurring Basis | Quoted Prices in Active Markets for Identical Assets | Collateralized mortgage obligations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	0	0
Recurring Basis | Quoted Prices in Active Markets for Identical Assets | Debt securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	0	0
Recurring Basis | Quoted Prices in Active Markets for Identical Assets | Total U.S. government agency and sponsored agency obligations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	0	0
Recurring Basis | Quoted Prices in Active Markets for Identical Assets | Municipal bonds-tax exempt
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	0	0
Recurring Basis | Quoted Prices in Active Markets for Identical Assets | Mortgage-backed securities - commercial | Mortgage-backed securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	0	0
Recurring Basis | Quoted Prices in Active Markets for Identical Assets | Mortgage-backed securities - residential | Mortgage-backed securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	0	0
Recurring Basis | Significant Observable Inputs with No Active Market with Identical Characteristics
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	780,251	805,812
Recurring Basis | Significant Observable Inputs with No Active Market with Identical Characteristics | U.S. Treasury securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	0	0
Recurring Basis | Significant Observable Inputs with No Active Market with Identical Characteristics | Derivative financial instruments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative financial instruments, Assets	5,920	7,507
Derivative financial instruments, Liabilities	6,245	7,375
Recurring Basis | Significant Observable Inputs with No Active Market with Identical Characteristics | Collateralized mortgage obligations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	97,411	85,485
Recurring Basis | Significant Observable Inputs with No Active Market with Identical Characteristics | Debt securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	124,625	138,499
Recurring Basis | Significant Observable Inputs with No Active Market with Identical Characteristics | Total U.S. government agency and sponsored agency obligations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	712,355	740,428
Recurring Basis | Significant Observable Inputs with No Active Market with Identical Characteristics | Municipal bonds-tax exempt
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	67,896	65,384
Recurring Basis | Significant Observable Inputs with No Active Market with Identical Characteristics | Mortgage-backed securities - commercial | Mortgage-backed securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	47,991	51,292
Recurring Basis | Significant Observable Inputs with No Active Market with Identical Characteristics | Mortgage-backed securities - residential | Mortgage-backed securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	442,328	465,152
Recurring Basis | Significant Unobservable Inputs
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	0	0
Recurring Basis | Significant Unobservable Inputs | U.S. Treasury securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	0	0
Recurring Basis | Significant Unobservable Inputs | Derivative financial instruments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative financial instruments, Assets	0	0
Derivative financial instruments, Liabilities	0	0
Recurring Basis | Significant Unobservable Inputs | Collateralized mortgage obligations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	0	0
Recurring Basis | Significant Unobservable Inputs | Debt securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	0	0
Recurring Basis | Significant Unobservable Inputs | Total U.S. government agency and sponsored agency obligations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	0	0
Recurring Basis | Significant Unobservable Inputs | Municipal bonds-tax exempt
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	0	0
Recurring Basis | Significant Unobservable Inputs | Mortgage-backed securities - commercial | Mortgage-backed securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	0	0
Recurring Basis | Significant Unobservable Inputs | Mortgage-backed securities - residential | Mortgage-backed securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	$ 0	$ 0

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Fair Value Measurements - Assets and Liabilities Measured at Fair Value on Non-Recurring Basis (Detail) - USD ($) $ in Thousands	Dec. 31, 2023		Dec. 31, 2022		Dec. 31, 2021
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Servicing assets	$ 7,070		$ 7,176		$ 7,080
Non-recurring Basis
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Collateral dependent loans	7,352	[1]	2,694	[2]
Other real estate owned	117		117
Repossessed personal property	1,305		467
Servicing assets			7,176
Non-recurring Basis | Quoted Prices in Active Markets for Identical Assets
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Collateral dependent loans	0	[1]	0	[2]
Other real estate owned	0		0
Repossessed personal property	0		0
Servicing assets			0
Non-recurring Basis | Significant Observable Inputs with No Active Market with Identical Characteristics
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Collateral dependent loans	0	[1]	0	[2]
Other real estate owned	0		0
Repossessed personal property	0		0
Servicing assets			0
Non-recurring Basis | Significant Unobservable Inputs
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Collateral dependent loans	7,352	[1]	2,694	[2]
Other real estate owned	117		117
Repossessed personal property	$ 1,305		467
Servicing assets			$ 7,176

[1] Consisted of real estate loans of $2.2 million and commercial and industrial loans of $5.2 million.

[2] Consisted of real estate loans of $2.7 million.

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Fair Value Measurements - Assets and Liabilities Measured at Fair Value on Non-Recurring Basis (Parenthetical) (Detail) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Loans receivable	$ 6,112,972	$ 5,895,610
Non-recurring Basis | Real estate loans
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Loans receivable	2,200	$ 2,700
Non-recurring Basis | Commercial and Industrial loans
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Loans receivable	$ 5,200

XML

Fair Value Measurements - Quantitative Information about Level 3 Fair Value Assumptions for Assets Measured at Fair Value on Non-Recurring Basis (Detail) - Significant Unobservable Inputs - Non-recurring Basis $ in Thousands	Dec. 31, 2023 USD ($)	Dec. 31, 2022 USD ($)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value	$ 7,352	$ 2,694
Real Estate
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value	2,174	2,694
Commercial and Industrial
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value	$ 5,178
Alternative Investment, Valuation Technique [Extensible List]	us-gaap:MarketApproachValuationTechniqueMember
Minimum | Commercial and Industrial
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Range	(0.020)
Maximum | Commercial and Industrial
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Range	0.055
Weighted Average | Commercial and Industrial
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Range	(0.002)
Retail | Real Estate
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value	$ 1,530	$ 1,930
Alternative Investment, Valuation Technique [Extensible List]	us-gaap:MarketApproachValuationTechniqueMember	us-gaap:MarketApproachValuationTechniqueMember
Retail | Minimum | Real Estate
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Range	0.005	0.005
Retail | Maximum | Real Estate
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Range	0.020	0.025
Retail | Weighted Average | Real Estate
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Range	0.015	0.016
Hospitality | Real Estate
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value	$ 338
Alternative Investment, Valuation Technique [Extensible List]	us-gaap:MarketApproachValuationTechniqueMember
Hospitality | Minimum | Real Estate
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Range	(0.030)
Hospitality | Maximum | Real Estate
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Range	0.035
Hospitality | Weighted Average | Real Estate
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Range	(0.001)
Other | Real Estate
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value	$ 305	$ 256
Alternative Investment, Valuation Technique [Extensible List]	us-gaap:MarketApproachValuationTechniqueMember	us-gaap:MarketApproachValuationTechniqueMember
Other | Minimum | Real Estate
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Range	(0.006)	(0.042)
Other | Maximum | Real Estate
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Range	0.001	0.003
Other | Weighted Average | Real Estate
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Range	(0.002)	(0.024)
Residential | Real Estate
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value	$ 1	$ 508
Alternative Investment, Valuation Technique [Extensible List]	us-gaap:MarketApproachValuationTechniqueMember	us-gaap:MarketApproachValuationTechniqueMember
Residential | Minimum | Real Estate
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Range	(0.015)	(0.015)
Residential | Maximum | Real Estate
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Range	0.003	0.003
Residential | Weighted Average | Real Estate
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Range	(0.006)	(0.001)
Other Real Estate Owned
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value	$ 117	$ 117
Alternative Investment, Valuation Technique [Extensible List]		us-gaap:MarketApproachValuationTechniqueMember
Other Real Estate Owned | Minimum
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Range	(0.010)	(0.020)
Other Real Estate Owned | Maximum
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Range	0.005	(0.020)
Other Real Estate Owned | Weighted Average
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Range	(0.002)	(0.002)
Repossessed Personal Property
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value	$ 1,305	$ 467
Alternative Investment, Valuation Technique [Extensible List]	us-gaap:MarketApproachValuationTechniqueMember	us-gaap:MarketApproachValuationTechniqueMember
Servicing Assets
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value		$ 7,176
Alternative Investment, Valuation Technique [Extensible List]		us-gaap:MarketApproachValuationTechniqueMember
Servicing Assets | Minimum | Prepayment Rate
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Range		0.011
Servicing Assets | Minimum | Discount Rate
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Range		0.022
Servicing Assets | Maximum | Prepayment Rate
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Range		0.017
Servicing Assets | Maximum | Discount Rate
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Range		0.025
Servicing Assets | Weighted Average | Prepayment Rate
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Range		0.016
Servicing Assets | Weighted Average | Discount Rate
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Range		0.022

XML

Fair Value Measurements - Estimated Fair Values of Financial Instruments (Detail) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Financial assets:
Cash and due from banks	$ 302,324	$ 352,421
Securities available for sale	865,739	853,838
Loans held for sale	12,013	8,043
Loans receivable, net of allowance for credit losses	6,112,972	5,895,610
Accrued interest receivable	23,371	18,537
Financial liabilities:
Noninterest-bearing deposits	2,003,596	2,539,602
Interest-bearing deposits	4,276,978	3,628,470
Borrowings and subordinated debentures	455,012	479,409
Accrued interest payable	39,306	7,792
Quoted Prices in Active Markets for Identical Assets | Fair Value
Financial assets:
Cash and due from banks	302,324	352,421
Securities available for sale	85,488	48,026
Loans held for sale	0	0
Loans receivable, net of allowance for credit losses	0	0
Accrued interest receivable	23,371	18,537
Financial liabilities:
Noninterest-bearing deposits	0	0
Interest-bearing deposits	0	0
Borrowings and subordinated debentures	0	0
Accrued interest payable	39,306	7,792
Significant Observable Inputs with No Active Market with Identical Characteristics | Fair Value
Financial assets:
Cash and due from banks	0	0
Securities available for sale	780,251	805,812
Loans held for sale	12,238	8,423
Loans receivable, net of allowance for credit losses	0	0
Accrued interest receivable	0	0
Financial liabilities:
Noninterest-bearing deposits	2,003,596	2,539,602
Interest-bearing deposits	0	0
Borrowings and subordinated debentures	323,491	345,867
Accrued interest payable	0	0
Significant Unobservable Inputs | Fair Value
Financial assets:
Cash and due from banks	0	0
Securities available for sale	0	0
Loans held for sale	0	0
Loans receivable, net of allowance for credit losses	6,007,975	5,808,190
Accrued interest receivable	0	0
Financial liabilities:
Noninterest-bearing deposits	0	0
Interest-bearing deposits	4,271,711	3,623,827
Borrowings and subordinated debentures	128,229	126,828
Accrued interest payable	$ 0	$ 0

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Share-based Compensation - Additional Information (Detail) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2023 USD ($) Bank $ / shares shares	Dec. 31, 2022 USD ($) $ / shares shares	Dec. 31, 2021 USD ($) $ / shares shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation expense	$ 3,800
Weighted average period cost expected to be recognized	1 year 9 months 18 days
Stock options, expiration term from date of grant	10 years
Share-based compensation expense	$ 2,681	$ 2,595	$ 2,436
Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Period of continuous service	3 years
Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Period of continuous service	5 years
2013 Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares granted under the plan | shares	0
2021Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares of common stock to be granted under equity incentive awards | shares	1,500,000
Shares available for issuance under the Plan | shares	(1,116,555)
2021Plan | Performance Stock Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation expense	$ 1,300
Weighted average period cost expected to be recognized	1 year 10 months 24 days
Number of shares granted | shares	53,696
Total fair value of granted shares	$ 1,000
Grant date fair value, vested | $ / shares	$ 21.08
Number of regional banks | Bank	50
2013 and 2021 Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation expense	$ 0
Options granted in period (shares) | shares	0	0	0
Stock options, expiration term from date of grant			10 years
2013 and 2021 Plan | Restricted stock awards
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation expense	$ 2,500
Weighted average period cost expected to be recognized	1 year 9 months 18 days
Total fair value of vested shares	$ 1,400	$ 2,100	$ 2,700
Number of shares granted | shares	131,021	101,271	75,679
Grant date fair value, vested | $ / shares	$ 19.34	$ 23.95	$ 16.01
2013 and 2021 Plan | Performance Stock Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total fair value of vested shares	$ 2,600
Number of shares granted | shares	53,696	38,036	42,626
Grant date fair value, vested | $ / shares	$ 9.65
Share-based compensation expense	$ 700
2013 and 2021 Plan | Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Period of continuous service			3 years
2013 and 2021 Plan | Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Period of continuous service			5 years
2013 Equity Compensation Plan | Performance Stock Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock options, expiration term from date of grant	3 years
Share-based compensation arrangement by share-based payment award, vesting rights	Each PSU that vests entitles the recipient to receive one share of the Company’s common stock on a specified issuance date

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Share-Based Compensation - Share-Based Compensation Expense and Related Tax Benefits (Detail) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Share-Based Payment Arrangement [Abstract]
Share-based compensation expense	$ 2,681	$ 2,595	$ 2,436
Related tax benefits	$ 808	$ 752	$ 703

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Share-Based Compensation - Summary of Information under Plans (Detail) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Cash received from options exercised		$ 19
2013 and 2021 Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total intrinsic value of options exercised	$ 343	20
Cash received from options exercised		$ 19

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Share-Based Compensation - Summary of Stock Option Transactions under Plans (Detail) - 2013 and 2021 Plan - $ / shares	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward]
Number of Shares, options outstanding at beginning of period (shares)	111,000	115,938	125,938
Number of Shares, Options exercised (shares)	(50,000)	(1,500)
Number of Shares, Options forfeited (shares)			(10,000)
Number of Shares, Options expired (shares)		(3,438)
Number of Shares, Options outstanding at end of period (shares)	61,000	111,000	115,938
Number of Shares, Options exercisable at end of period (shares)	61,000	111,000	115,938
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Abstract]
Weighted-Average Exercise Price Per Share, Options outstanding at beginning of period (in USD per share)	$ 19.89	$ 19.58	$ 19.59
Weighted-Average Exercise Price Per Share, Options exercised (in USD per share)	23.29	12.54
Weighted-Average Exercise Price Per Share, Options forfeited (in USD per share)			19.74
Weighted-Average Exercise Price Per Share, Options expired (in USD per share)		12.54
Weighted-Average Exercise Price Per Share, Options outstanding at end of period (in USD per share)	22.73	19.89	19.58
Weighted-Average Exercise Price Per Share, Options exercisable at end of period (in USD per share)	$ 22.73	$ 19.89	$ 19.58

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Share-Based Compensation - Summary of Stock Options Outstanding under Plans (Detail) - 2013 and 2021 Plan - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Options Outstanding, Number of Shares (shares)	61,000	111,000	115,938	125,938
Options Outstanding, Intrinsic Value	$ (274)
Options Outstanding, Weighted-Average Exercise Price Per Share (in USD per share)	$ 22.73	$ 19.89	$ 19.58	$ 19.59
Options Outstanding, Weighted-Average Remaining Contractual Life	10 months 2 days
Options Exercisable, Number of Shares (shares)	61,000	111,000	115,938
Options Exercisable, Intrinsic Value	$ (274)
Options Exercisable, Weighted-Average Exercise Price Per Share (in USD per share)	$ 22.73	$ 19.89	$ 19.58
Options Exercisable, Weighted-Average Remaining Contractual Life	10 months 2 days
Intrinsic value of stock options outstanding (in USD per share)	$ 19.4
$20.00 to $21.49
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Options Outstanding, Number of Shares (shares)	3,000
Options Outstanding, Intrinsic Value	$ (7)
Options Outstanding, Weighted-Average Exercise Price Per Share (in USD per share)	$ 20.64
Options Outstanding, Weighted-Average Remaining Contractual Life	7 months 2 days
Options Exercisable, Number of Shares (shares)	3,000
Options Exercisable, Intrinsic Value	$ (7)
Options Exercisable, Weighted-Average Exercise Price Per Share (in USD per share)	$ 20.64
Options Exercisable, Weighted-Average Remaining Contractual Life	7 months 2 days
$21.50 to $23.49
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Options Outstanding, Number of Shares (shares)	55,000
Options Outstanding, Intrinsic Value	$ (247)
Options Outstanding, Weighted-Average Exercise Price Per Share (in USD per share)	$ 22.73
Options Outstanding, Weighted-Average Remaining Contractual Life	9 months 25 days
Options Exercisable, Number of Shares (shares)	55,000
Options Exercisable, Intrinsic Value	$ (247)
Options Exercisable, Weighted-Average Exercise Price Per Share (in USD per share)	$ 22.73
Options Exercisable, Weighted-Average Remaining Contractual Life	9 months 25 days
$23.50 to $24.83
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Options Outstanding, Number of Shares (shares)	3,000
Options Outstanding, Intrinsic Value	$ (20)
Options Outstanding, Weighted-Average Exercise Price Per Share (in USD per share)	$ 24.83
Options Outstanding, Weighted-Average Remaining Contractual Life	1 year 5 months 23 days
Options Exercisable, Number of Shares (shares)	3,000
Options Exercisable, Intrinsic Value	$ (20)
Options Exercisable, Weighted-Average Exercise Price Per Share (in USD per share)	$ 24.83
Options Exercisable, Weighted-Average Remaining Contractual Life	1 year 5 months 23 days

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Share-Based Compensation - Schedule of Restricted Stock Awards and Performance Stock Units under 2013 and 2021 Plan (Detail) - 2013 and 2021 Plan - $ / shares	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Restricted stock awards
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]
Number of Shares, at beginning of period	156,174	152,087	243,708
Number of Shares, Stock granted	131,021	101,271	75,679
Number of Shares, Stock vested	(83,968)	(89,699)	(134,659)
Number of Shares, Stock forfeited	(6,782)	(7,485)	(32,641)
Number of Shares, Stock at end of period	196,445	156,174	152,087
Weighted-Average Grant Date Fair Value Per Share, Stock at beginning of period (in USD per share)	$ 21.29	$ 17.24	$ 15.60
Weighted-Average Grant Date Fair Value Per Share, Restricted stock granted (in USD per share)	18.86	24.56	19.62
Weighted-Average Grant Date Fair Value Per Share, Stock vested (in USD per share)	19.34	23.95	16.01
Weighted-Average Grant Date Fair Value Per Share, Stock forfeited (in USD per share)	23.08	23.46	15.02
Weighted-Average Grant Date Fair Value Per Share, stock at end of period (in USD per share)	$ 20.72	$ 21.29	$ 17.24
Performance Shares [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]
Number of Shares, at beginning of period	104,599	66,563	23,937
Number of Shares, Stock granted	53,696	38,036	42,626
Number of Shares, Stock vested	(23,937)
Number of Shares, Stock at end of period	134,358	104,599	66,563
Weighted-Average Grant Date Fair Value Per Share, Stock at beginning of period (in USD per share)	$ 18.83	$ 15.25	$ 9.65
Weighted-Average Grant Date Fair Value Per Share, Restricted stock granted (in USD per share)	21.08	25.1	18.4
Weighted-Average Grant Date Fair Value Per Share, Stock vested (in USD per share)	9.65
Weighted-Average Grant Date Fair Value Per Share, stock at end of period (in USD per share)	$ 21.37	$ 18.83	$ 15.25

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Earnings per Share - Reconciliation of Components Used to Derive Basic and Diluted EPS (Detail) - USD ($) $ / shares in Units, $ in Thousands		12 Months Ended
		Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Earnings Per Share [Abstract]
Net income		$ 80,041	$ 101,394	$ 98,677
Less: income allocated to unvested restricted shares		505	558	671
Net Income (Loss) Available to Common Stockholders, Basic		79,536	100,836	98,006
Income allocated to common shares		$ 79,536	$ 100,836	$ 98,006
Weighted-average shares for basic EPS (shares)		30,269,740	30,299,148	30,393,559
Effect of dilutive securities - options and unvested restricted stock (shares)		60,518	92,909	78,188
Weighted-average shares for diluted EPS		30,330,258	30,392,057	30,471,747
Net income per share, basic (in USD per share)	[1]	$ 2.64	$ 3.35	$ 3.25
Effect of dilutive securities (in USD per share)	[1]	0.02	0.02	0.02
Basic EPS	[1]	2.63	3.33	3.22
Net income per share, diluted (in USD per share)	[1]	2.64	3.34	3.24
Diluted EPS	[1]	$ 2.62	$ 3.32	$ 3.22

[1] Per share amounts may not be able to be recalculated using net income and weighted-average shares presented above due to rounding.

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Earnings per Share - Additional Information (Detail) - shares	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Employee Stock Option
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from calculation of diluted earnings per share	0	0	0

XML

Employee Benefits - Additional Information (Detail) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Defined Contribution Plan Disclosure [Line Items]
Accrued expense liability for personal paid time off	$ 3.0	$ 2.4
Bank-Owned Life Insurance
Defined Contribution Plan Disclosure [Line Items]
Cash surrender value	$ 56.3	55.5
Section 401(k) Plan
Defined Contribution Plan Disclosure [Line Items]
Percent of participant contributions (percent)	75.00%
Percent of employer contribution (up to, percent)	8.00%
Contributions	$ 3.1	$ 2.8	$ 2.6

XML

Off-Balance Sheet Commitments - Additional Information (Detail) $ in Millions	Dec. 31, 2023 USD ($)
Loss Contingencies [Line Items]
Letters of credit to FHLBSF	$ 120.0
Deposits from State of California	$ 120.0

XML

Off-Balance Sheet Commitments - Distribution of Undisbursed Loan Commitments (Detail) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Loss Contingencies [Line Items]
Total undisbursed loan commitments	$ 930,825	$ 872,317
Commitments to extend credit
Loss Contingencies [Line Items]
Total undisbursed loan commitments	813,960	780,543
Standby letters of credit
Loss Contingencies [Line Items]
Total undisbursed loan commitments	83,725	71,829
Commercial letters of credit
Loss Contingencies [Line Items]
Total undisbursed loan commitments	$ 33,140	$ 19,945

XML

Off-Balance Sheet Commitments - Allowance for Credit Losses Related to Off-Balance Sheet Items (Detail) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Loss Contingencies [Line Items]
Balance at beginning of period	$ 3,114	$ 2,586	$ 2,792
Provision (recovery) for credit losses	(640)	528	(206)
Balance at end of period	$ 2,474	$ 3,114	$ 2,586

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Derivatives and Hedging Activities - Additional Information (Details) - USD ($)	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Derivative [Line Items]
Derivative liability, including accrued interest	$ 0	$ 0
Other Income
Derivative [Line Items]
Fee income	600,000	$ 0	$ 0
Cash Flow Hedging | Interest Rate Swap | Designated as Hedging Instrument
Derivative [Line Items]
Notional Amount	100,000,000
Cash Flow Hedging | Interest Income
Derivative [Line Items]
Increase to interest income	$ 400,000

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Derivatives and Hedging Activities - Schedule of Fair Value of Derivative Financial Instruments as well as their Classification on Balance Sheet (Detail) - USD ($)	Dec. 31, 2023	Dec. 31, 2022
Derivatives Fair Value [Line Items]
Total derivative assets	$ 6,245,000	$ 7,507,000
Total derivative liabilities	5,920,000	7,375,000
Not Designated as Hedging Instrument
Derivatives Fair Value [Line Items]
Total derivative assets	5,939,000
Not Designated as Hedging Instrument | Interest Rate Products
Derivatives Fair Value [Line Items]
Notional Amount	104,571,000	61,460,000
Total derivative assets	5,939,000	7,507,000
Total derivative liabilities	5,920,000	$ 7,375,000
Designated as Hedging Instrument
Derivatives Fair Value [Line Items]
Total derivative assets	306,000
Designated as Hedging Instrument | Interest Rate Products
Derivatives Fair Value [Line Items]
Notional Amount	100,000,000
Total derivative assets	$ 306,000

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Derivatives and Hedging Activities - Effect of Cash Flow Hedge Accounting on Accumulated Other Comprehensive Income and the Consolidated Statements of Income (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2023 USD ($)
Derivative Instruments, Gain (Loss) [Line Items]
Amount of Gain or (Loss) Recognized in OCI on Derivative	$ 306
Amount of Gain or (Loss) Recognized in OCI Included Component	306
Interest Rate Products
Derivative Instruments, Gain (Loss) [Line Items]
Amount of Gain or (Loss) Recognized in OCI on Derivative	306
Amount of Gain or (Loss) Recognized in OCI Included Component	$ 306

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Derivatives and Hedging Activities - Effect of Derivative Financial Instruments that are Not Designated as Hedging Instruments on Income Statement (Detail) - Not Designated as Hedging Instrument - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Derivative Instruments Gain Loss [Line Items]
Amount of Gain or (Loss) Recognized in Income on Derivative	$ (114)	$ 113	$ 80
Derivative, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration]	Other operating income	Other operating income	Other operating income
Interest Rate Products
Derivative Instruments Gain Loss [Line Items]
Amount of Gain or (Loss) Recognized in Income on Derivative	$ (114)	$ 113	$ 80

XML

Derivatives and Hedging Activities - Summary of Gross Presentation, Effects of Offsetting and a Net Presentation of Derivatives (Detail) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Derivatives Fair Value [Line Items]
Gross Amounts of Recognized Assets, Offsetting of Derivative Assets	$ 6,245	$ 7,507
Net Amounts of Assets presented in the Statement of Financial Position, Offsetting of Derivative Assets	6,245	7,507
Gross Amounts Not Offset in the Statement of Financial Position, Derivative Assets, Net Amount	230
Gross Amounts of Recognized Liabilities, Offsetting of Derivative Liabilities	5,920	7,375
Net Amounts of Liabilities presented in the Statement of Financial Position, Offsetting of Derivative Liabilities	5,920	7,375
Gross Amounts Not Offset in the Statement of Financial Position, Derivative Liabilities, Net Amount	(5,636)
Derivative Liabilities, Financial Instruments
Derivatives Fair Value [Line Items]
Gross Amounts Not Offset in the Statement of Financial Position, Derivative Assets, Net Amount	284
Gross Amounts Not Offset in the Statement of Financial Position, Derivative Liabilities, Net Amount	(284)	7,375
Derivative Assets, Financial Instruments
Derivatives Fair Value [Line Items]
Gross Amounts Not Offset in the Statement of Financial Position, Derivative Assets, Net Amount		7,375
Derivative Assets, Cash Collateral Received
Derivatives Fair Value [Line Items]
Gross Amounts Not Offset in the Statement of Financial Position, Derivative Assets, Net Amount	$ 5,731	$ 132

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Qualified Affordable Housing Project Investments - Additional Information (Detail) - USD ($)	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Investments in Affordable Housing Projects [Line Items]
Qualified affordable housing project investments	$ 16,600,000	$ 5,900,000
Unfunded commitments related to investments	$ 10,000,000	27,000
Investment commitments expected to be paid	2024 2025 2026 2027 2028
Income Tax Expense
Investments in Affordable Housing Projects [Line Items]
Qualified affordable housing project investments, amortization expense recognized	$ 1,900,000	$ 1,900,000	$ 1,900,000

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Liquidity - Additional Information (Detail) - USD ($)	Dec. 31, 2023	Dec. 31, 2022
Line of Credit Facility [Line Items]
Securities available for sale	$ 865,739,000	$ 853,838,000
State of California time deposits	2,454,867,000
Borrowings	0
Line of credit	115,000,000.0
Hanmi Bank
Line of Credit Facility [Line Items]
Cash on deposit with bank subsidiary	7,500,000	10,600,000
Federal Home Loan Bank, Advances, Branch of FHLB Bank, Amount of Advances	325,000,000	350,000,000.0
State of California time deposits	120,000,000	120,000,000
Broker deposits	$ 58,300,000	83,300,000
Percentage of borrowings from FHLB (up to)	30.00%
Total borrowing capacity based on pledged collateral	$ 1,540,000,000	1,540,000,000
Borrowing capacity available based on pledged collateral	1,090,000,000.00	$ 1,070,000,000.00
Amount available from borrowing source	23,200,000
Market value for loans pledged by Bank	24,800,000
Borrowings	0
Maximum borrowing capacity of line of credit	100,000,000
Hanmi Bank | U.S. Treasury Securities
Line of Credit Facility [Line Items]
Securities available for sale	$ 32,400,000

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Condensed Financial Information of Parent Company - Balance Sheets of Parent Company (Detail) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Assets
Securities available for sale	$ 865,739	$ 853,838
Total assets	7,570,341	7,378,262
Liabilities:
Subordinated debentures	130,012	129,409
Total liabilities	6,868,450	6,740,747
Stockholders' equity	701,891	637,515	$ 643,417	$ 577,044
Total liabilities and stockholders' equity	7,570,341	7,378,262
Hanmi Financial
Assets
Cash	7,492	10,558
Securities available for sale	32,389	17,660
Investments in consolidated subsidiaries	790,425	728,172
Other assets	3,551	12,611
Total assets	833,857	769,001
Liabilities:
Subordinated debentures	130,012	129,409
Other liabilities	1,954	2,077
Total liabilities	131,966	131,486
Stockholders' equity	701,891	637,515
Total liabilities and stockholders' equity	$ 833,857	$ 769,001

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Condensed Financial Information of Parent Company - Statement of Income of Parent Company (Detail) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Condensed Income Statements, Captions [Line Items]
Interest expense	$ (148,057)	$ (36,166)	$ (21,625)
Other expense	(11,255)	(11,395)	(9,575)
Income tax benefit	(34,540)	(39,333)	(36,817)
Net income	80,041	101,394	98,677
Hanmi Financial
Condensed Income Statements, Captions [Line Items]
Dividends from bank subsidiaries	44,500	57,000	20,639
Interest income on securities	1,094	191
Interest expense	(6,482)	(8,037)	(8,273)
Other expense	(5,817)	(5,174)	(4,891)
Income before taxes and undistributed income of subsidiary	33,295	43,980	7,475
Income tax benefit	1,403	4,026	3,962
Income before undistributed income of subsidiary	34,698	48,006	11,437
Equity in undistributed income of subsidiary	45,343	53,388	87,239
Net income	$ 80,041	$ 101,394	$ 98,676

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Condensed Financial Information of Parent Company - Statement of Cash Flows of Parent Company (Detail) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Cash Flows from Operating Activities:
Net income	$ 80,041	$ 101,394	$ 98,677
Adjustments to reconcile net income to net cash used in operating activities
Depreciation and amortization	6,793	12,384	13,797
Share-based compensation expense	2,681	2,595	2,436
Net cash provided by operating activities	107,799	147,308	93,729
Cash flows from investing activities:
Purchases of securities	(106,971)	(166,564)	(513,243)
Proceeds from matured, called and repayment of securities	105,848	105,979	275,624
Net cash used in investing activities	(209,994)	(881,506)	(447,039)
Cash flows from financing activities:
Proceeds from exercise of stock options		19
Issuance of subordinated debentures			107,929
Redemption of subordinated debentures, net of treasury debentures		(87,300)	(13,043)
Cash paid for employee vested shares surrendered due to employee tax liability	(785)	(732)	(572)
Repurchase of common stock	(4,084)		(6,135)
Cash dividends paid	(30,535)	(28,636)	(16,514)
Net cash provided by financing activities	52,098	477,654	570,426
Net increase (decrease) in cash and due from banks	(50,097)	(256,544)	217,116
Cash and due from banks at beginning of year	352,421	608,965	391,849
Cash and due from banks at end of period	302,324	352,421	608,965
Hanmi Financial
Cash Flows from Operating Activities:
Net income	80,041	101,394	98,676
Adjustments to reconcile net income to net cash used in operating activities
Undistributed income of subsidiary	(45,343)	(53,388)	(87,239)
Depreciation and amortization	409	1,703	1,148
Share-based compensation expense	2,680	2,596	2,437
Change in other assets and liabilities	8,879	(2,019)	(9,076)
Net cash provided by operating activities	46,666	50,286	5,946
Cash flows from investing activities:
Purchases of securities	(21,328)	(17,956)
Proceeds from matured, called and repayment of securities	7,000
Net cash used in investing activities	(14,328)	(17,956)
Cash flows from financing activities:
Proceeds from exercise of stock options		19
Issuance of subordinated debentures			107,929
Redemption of subordinated debentures, net of treasury debentures		(87,300)	(13,043)
Cash paid for employee vested shares surrendered due to employee tax liability	(785)	(732)	(572)
Repurchase of common stock	(4,084)		(6,135)
Cash dividends paid	(30,535)	(28,636)	(16,514)
Net cash provided by financing activities	(35,404)	(116,649)	71,665
Net increase (decrease) in cash and due from banks	(3,066)	(84,319)	77,611
Cash and due from banks at beginning of year	10,558	94,877	17,266
Cash and due from banks at end of period	$ 7,492	$ 10,558	$ 94,877

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Subsequent Events - Additional Information (Details) - Subsequent Event [Member]	Jan. 25, 2024 $ / shares
Subsequent Event [Line Items]
Dividend declared date	Jan. 25, 2024
Dividends Payable, Amount Per Share	$ 0.25
Dividend payable date	Feb. 22, 2024
Dividend payable record date	Feb. 05, 2024