8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_________________

FORM 8-K

_________________

CURRENT REPORT

Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):  October 22, 2019

HANMI FINANCIAL CORPORATION

(Exact name of registrant as specified in its charter)

Delaware	000-30421	95-4788120
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

3660 Wilshire Boulevard, PH-A

Los Angeles, CA 90010

(Address of Principal Executive Offices) (Zip Code)

(213) 382-2200

(Registrant's telephone number, including area code)

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.001 par value	HAFC	Nasdaq Global Select Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

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. ☐

Item 2.02. Results of Operations and Financial Condition.

This information set forth under “Item 2.02. Results of Operations and Financial Condition,” including Exhibit 99.1 attached hereto, shall not be deemed “filed” for purposes of Section 18 of the Securities and Exchange Act of 1934, as amended (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, regardless of any general incorporation language in such filing.

On October 22, 2019, Hanmi Financial Corporation (“Hanmi Financial”) issued a press release announcing its financial results for the quarter ended September 30, 2019. A copy of the press release is attached as Exhibit 99.1 to this Form 8-K.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits

99.1 Press release issued by Hanmi Financial dated October 22, 2019.

104 Cover Page Interactive Data File (embedded within the Inline XBRL document)

Forward-Looking Statements

This press release contains forward-looking statements, which are included in accordance with the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. 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. All statements 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 plans, strategic alternatives for a possible business combination, merger or sale transaction, and other similar forecasts and statements of expectation and statements of assumption underlying any of the foregoing. These statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to differ from those expressed or implied by the forward-looking statement. These factors include the following: failure to maintain adequate levels of capital and liquidity to support our operations; the effect of potential future supervisory action against us or Hanmi Bank; our ability to remediate any material weakness in our internal controls over financial reporting; general economic and business conditions internationally, nationally and in those areas in which we operate; volatility and deterioration in the credit and equity markets; changes in consumer spending, borrowing and savings habits; availability of capital from private and government sources; 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; risks of natural disasters; a failure in or breach of our operational or security systems or infrastructure, including cyberattacks; the failure to maintain current technologies; inability to successfully implement future information technology enhancements; difficult business and economic conditions that can adversely affect our industry and business, including competition and lack of soundness of other financial institutions, fraudulent activity and negative publicity; risks associated with Small Business Administration loans; 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; the imposition of tariffs or other domestic or international governmental policies impacting the value of the products of our borrowers; failure to attract or retain key employees; changes in governmental regulation, including, but not limited to, any increase in FDIC insurance premiums; 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; ability to identify a suitable strategic partner or to consummate a strategic transaction; adequacy of our allowance for loan and lease losses; credit quality and the effect of credit quality on our provision for loan and lease losses and allowance for loan and lease 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; changes in securities markets; and risks as it relates to cyber security against our information technology. In addition, we set forth certain risks in our reports filed with the U.S. Securities and Exchange Commission, including, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2018, our Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K that we will file hereafter, which could cause actual results to differ from those projected. We undertake no obligation to update such forward-looking statements except as required by law.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	HANMI FINANCIAL CORPORATION
Date: October 22, 2019	By:	/s/ Bonita I. Lee
		Bonita I. Lee
		Chief Executive Officer

EXHIBIT INDEX

Exhibit No.	Description
99.1	Press release, dated October 22, 2019.*
104	Cover Page Interactive Data File (embedded within the Inline XBRL document)

* Deemed “furnished” and not “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, regardless of any general incorporation language in such filing.

EX-99.1

EXHIBIT 99.1

Hanmi Reports Third Quarter 2019 Results

2019 Third Quarter Highlights:      

• Net income of $12.4 million, or $0.40 per diluted share, up from $2.7 million, or $0.09 per diluted share for the prior quarter and down from $16.1 million or $0.50 per diluted share from the same quarter a year ago; second quarter net income included a $16.7 million provision for loan and lease losses arising from a $15.7 million specific allowance relating to a $40.7 million loan relationship.
• Loans and leases receivable stood at $4.57 billion at the end of the third quarter, compared with $4.56 billion at the end of the prior quarter, and $4.58 billion at the end of the third quarter of 2018; average loans and leases for the third quarter increased 2.5% on an annualized basis.
• Deposits were $4.69 billion at June 30, 2019, down 1.5% from the end of the prior quarter principally due to a decline in higher-costing time deposits; deposits were up 1.6% from $4.61 billion a year ago.
• Net interest income was $44.1 million, up 2.5% from the previous quarter benefitting from an improved net interest margin and one additional day in the quarter.
• Net interest margin improved to 3.36% compared with 3.30% for the previous quarter reflecting a four basis point decline in the cost of deposits and an improvement in the yield on interest earning assets.
• Noninterest income was $6.9 million, down from $7.7 million for the previous quarter; gains on sales of SBA loans were $1.8 million and $1.1 million, respectively; second quarter included gains on sales of securities of $0.6 million, and a gain on the sale of a branch building of $1.2 million.
• Noninterest expense was $32.6 million compared with $30.1 million for the second quarter reflecting elevated charges arising from the troubled loan relationship, the implementation of the new credit loss accounting standard and legal matters.
• Loan and lease loss provision of $1.6 million compared with $16.7 million for the second quarter; the ratio of the allowance to loans and leases ended the quarter at 1.11% compared with 1.08% at the end of the previous quarter.
• Third quarter return on average assets was 0.90% and return on average equity was 8.67%.

LOS ANGELES, Oct. 22, 2019 (GLOBE NEWSWIRE) -- Hanmi Financial Corporation (NASDAQ: HAFC, or “Hanmi”), the parent company of Hanmi Bank (the “Bank”), today reported net income for the 2019 third quarter of $12.4 million, or $0.40 per diluted share, compared with $2.7 million, or $0.09 per diluted share for the 2019 second quarter and $16.1 million, or $0.50 per diluted share for the 2018 third quarter.

Bonnie Lee, President and Chief Executive Officer, said, “Hanmi’s third quarter results reflect the continuation of our strategy to protect net interest margin which has led to moderate growth in loans and leases. Our focus on demand deposits and emphasis on loan and lease yields accretive to our overall portfolio underscore this effort. In addition, SBA loan production was the highest in nearly two years and earnings in the quarter benefitted from rising premiums on the guaranteed portion of the SBA (7a) loans that we sold in the period.  Importantly, net interest margin expanded six basis points in the quarter due to a slight increase in loan yields and lower deposit costs driven by a favorable mix of lower time deposits and growth in non-interest bearing demand deposits.”

Ms. Lee concluded, “Notwithstanding the troubled loan relationship identified in the prior quarter, overall asset quality remains strong. Hanmi continues to maintain disciplined underwriting standards and we remain focused on originating high-quality, well-priced loans and leases.”

Quarterly Highlights
(In thousands, except per share data)

	As of or for the Three Months Ended															Amount Change
	September 30,			June 30,			March 31,			December 31,			September 30,			Q3-19			Q3-19
	2019			2019			2019			2018			2018			vs. Q2-19			vs. Q3-18
Net income	$	12,376		$	2,656		$	14,672		$	11,385		$	16,081		$	9,720		$	(3,705	)
Net income per diluted common share	$	0.40		$	0.09		$	0.48		$	0.37		$	0.50		$	0.31		$	(0.10	)
Assets	$	5,527,982		$	5,511,752		$	5,571,068		$	5,502,219		$	5,487,042		$	16,230		$	40,940
Loans and leases receivable	$	4,569,837		$	4,555,802		$	4,575,620		$	4,600,540		$	4,582,883		$	14,035		$	(13,046	)
Deposits	$	4,690,141		$	4,762,068		$	4,820,175		$	4,747,235		$	4,614,422		$	(71,927	)	$	75,719
Return on average assets		0.90	%		0.19	%		1.09	%		0.83	%		1.17	%		0.71			-0.27
Return on average stockholders' equity		8.67	%		1.87	%		10.62	%		7.92	%		10.91	%		6.80			-2.24
Net interest margin (1)		3.36	%		3.30	%		3.52	%		3.51	%		3.48	%		0.06			-0.12
Efficiency ratio (2)		64.04	%		59.44	%		56.83	%		56.40	%		56.28	%		4.60			7.76
Tangible common equity to tangible assets (3)		10.20	%		10.04	%		9.93	%		9.84	%		10.15	%		0.16			0.05
Tangible common equity per common share (3)	$	18.05		$	17.83		$	17.89		$	17.47		$	17.31		$	0.22		$	0.74
(1)  Amounts calculated on a fully taxable equivalent basis using the federal tax rate in effect for the periods presented.
(2)  Noninterest expense divided by net interest income plus noninterest income.
(3)  Refer to "Non-GAAP Financial Measures" for further details.

Results of Operations
Third quarter 2019 net interest income increased 2.5% to $44.1 million from $43.0 million in the 2019 second quarter, principally due to an increase of $1.1 million in interest and fees on loans and leases as a result of increased balances and one additional day in the period as well as a decrease in interest expense on interest bearing liabilities due to lower time deposit balances.  Third quarter loan prepayment penalties were $0.3 million compared with $0.1 million for the second quarter.

	As of or For the Three Months Ended (in thousands)										Percentage Change
	Sep 30,		Jun 30,		Mar 31,		Dec 31,		Sep 30,		Q3-19			Q3-19
Net Interest Income	2019		2019		2019		2018		2018		vs. Q2-19			vs. Q3-18
Interest and fees on loans and leases(1)	$	57,929	$	56,872	$	58,334	$	57,947	$	56,361		1.9	%		2.8	%
Interest on securities		3,769		3,770		3,456		3,278		3,238		-0.0	%		16.4	%
Dividends on FHLB stock		286		283		289		555		286		1.1	%		0.0	%
Interest on deposits in other banks		193		557		335		179		151		-65.4	%		27.8	%
Total interest and dividend income	$	62,177	$	61,482	$	62,414	$	61,959	$	60,036		1.1	%		3.6	%
Interest on deposits		15,995		16,728		15,683		14,139		11,694		-4.4	%		36.8	%
Interest on borrowings		367		-		71		420		1,264		0.0	%		-71.0	%
Interest on subordinated debentures		1,757		1,764		1,772		1,754		1,749		-0.4	%		0.5	%
Total interest expense		18,119		18,492		17,526		16,313		14,707		-2.0	%		23.2	%
Net interest income	$	44,058	$	42,990	$	44,888	$	45,646	$	45,329		2.5	%		-2.8	%
(1)  Includes loans held for sale.

Net interest margin on a tax equivalent basis was 3.36% for the third quarter of 2019 compared with 3.30% for the second quarter of 2019. Net interest margin increased 6 basis points from the prior quarter primarily due to lower cost of deposits and an increase in interest-earning asset yields.

The average earning asset yield (tax equivalent) was 4.74% for the third quarter of 2019 compared with 4.72% for the second quarter of 2019. The two basis point increase was principally due to a higher level of loan and lease balances in average earning assets.

The cost of interest-bearing liabilities was 2.04% for the third quarter of 2019 compared with 2.06% for the second quarter of 2019. The two basis point decrease was primarily due to a 4.6% decrease in average interest-bearing deposits.

	For the Three Months Ended (in thousands)															Percentage Change
	Sep 30,			Jun 30,			Mar 31,			Dec 31,			Sep 30,			Q3-19			Q3-19
Average Earning Assets and Interest-bearing Liabilities	2019			2019			2019			2018			2018			vs. Q2-19			vs. Q3-18
Loans and leases receivable (1)	$	4,519,770		$	4,491,377		$	4,533,120		$	4,544,722		$	4,551,284			0.6	%		-0.7	%
Securities		630,450			629,062			589,547			581,550			589,939			0.2	%		6.9	%
FHLB stock		16,385			16,385			16,385			16,385			16,385			0.0	%		0.0	%
Interest-bearing deposits in other banks		35,140			92,753			53,022			34,301			30,368			-62.1	%		15.7	%
Average interest-earning assets	$	5,201,745		$	5,229,577		$	5,192,074		$	5,176,958		$	5,187,976			-0.5	%		0.3	%
Demand: interest-bearing	$	82,665		$	83,932		$	85,291		$	89,971		$	92,090			-1.5	%		-10.2	%
Money market and savings		1,555,639			1,541,976			1,526,710			1,510,428			1,377,739			0.9	%		12.9	%
Time deposits		1,692,419			1,863,685			1,852,562			1,751,429			1,687,827			-9.2	%		0.3	%
Average interest-bearing deposits		3,330,723			3,489,593			3,464,563			3,351,828			3,157,656			-4.6	%		5.5	%
Borrowings		74,239			59			10,611			65,217			240,054			125728.8	%		-69.1	%
Subordinated debentures		118,145			118,007			117,863			117,728			117,584			0.1	%		0.5	%
Average interest-bearing liabilities	$	3,523,107		$	3,607,659		$	3,593,037		$	3,534,773		$	3,515,294			-2.3	%		0.2	%
(1)  Includes loans held for sale.
	For the Three Months Ended															Amount Change
	Sep 30,			Jun 30,			Mar 31,			Dec 31,			Sep 30,			Q3-19			Q3-19
Average Yields and Rates	2019			2019			2019			2018			2018			vs. Q2-19			vs. Q3-18
Loans and leases receivable(1)		5.08	%		5.08	%		5.22	%		5.06	%		4.91	%		0.01			0.17
Securities (2)		2.39	%		2.40	%		2.44	%		2.37	%		2.31	%		-0.01			0.08
FHLB stock		6.93	%		6.93	%		7.15	%		13.44	%		6.93	%		-0.00			-0.00
Interest-bearing deposits in other banks		2.18	%		2.41	%		2.56	%		2.07	%		1.97	%		-0.23			0.21
Interest-earning assets		4.74	%		4.72	%		4.89	%		4.76	%		4.60	%		0.03			0.14
Interest-bearing deposits		1.91	%		1.92	%		1.84	%		1.67	%		1.47	%		-0.02			0.44
Borrowings		1.96	%		0.00	%		2.71	%		2.56	%		2.09	%		1.96			-0.13
Subordinated debentures		5.92	%		5.96	%		6.01	%		5.94	%		5.92	%		-0.04			0.00
Interest-bearing liabilities		2.04	%		2.06	%		1.98	%		1.83	%		1.66	%		-0.02			0.38
Net interest margin (taxable equivalent basis)		3.36	%		3.30	%		3.52	%		3.51	%		3.48	%		0.06			-0.12
Cost of deposits		1.37	%		1.41	%		1.35	%		1.20	%		1.04	%		-0.04			0.33
(1)  Includes loans held for sale.
(2)  Amounts calculated on a fully taxable equivalent basis using the federal tax rate in effect for the periods presented.

For the third quarter of 2019, the loan and lease loss provision was $1.6 million compared with $16.7 million for the preceding quarter. Net charge-offs were $0.3 million for the 2019 third quarter, compared with $0.2 million for the 2019 second quarter. The allowance to loans and leases increased to 1.11% at the end of the third quarter from 1.08% for the previous quarter.

Third quarter noninterest income decreased 11.2% to $6.9 million from the second quarter, primarily from the $1.2 million gain on sale of a branch building realized last quarter as well as the decrease of $0.6 million in gain on sales of securities from the second quarter sale of the Bank’s remaining portfolio of tax-exempt municipal bonds. These decreases were partially offset by a $0.7 million increase in gain on sale of SBA loans. Gains on sales of SBA loans were $1.8 million for the third quarter, up from $1.1 million for the preceding quarter. The volume of SBA loans sold for the 2019 third quarter and 2019 second quarter were $24.3 million and $15.4 million, respectively.

	For the Three Months Ended (in thousands)										Percentage Change
	Sep 30,		Jun 30,		Mar 31,		Dec 31,		Sep 30,		Q3-19			Q3-19
Noninterest Income	2019		2019		2019		2018		2018		vs. Q2-19			vs. Q3-18
Service charges on deposit accounts	$	2,518	$	2,486	$	2,358	$	2,648	$	2,513		1.3	%		0.2	%
Trade finance and other service charges and fees		1,191		1,204		1,124		1,167		1,128		-1.1	%		5.6	%
Servicing income		614		600		357		630		673		2.3	%		-8.8	%
Bank-owned life insurance income		279		281		280		288		285		-0.7	%		-2.1	%
Gain on sale of bank premises		-		1,235		-		-		-		-100.0	%		0.0	%
All other operating income		491		293		484		584		483		67.6	%		1.7	%
Service charges, fees & other		5,093		6,099		4,603		5,317		5,082		-16.5	%		0.2	%
Gain on sale of SBA loans		1,767		1,060		926		983		1,114		66.7	%		58.6	%
Net gain (loss) on sales of securities		-		570		725		-		19		-100.0	%		-100.0	%
Total noninterest income	$	6,860	$	7,729	$	6,254	$	6,300	$	6,215		-11.2	%		10.4	%

Noninterest expense for the third quarter increased 8.2% to $32.6 million from $30.1 million for the prior quarter primarily due to a $1.1 million increase in occupancy and equipment expense, a $0.8 million increase in professional fees and a $0.6 million increase in salaries and benefits expense. The increase in salary and benefits expense arose from an increase in incentive expense and personnel. Occupancy and equipment expense was driven by the second quarter reassessment and reduction of personal property tax expense, while the increase in professional fees reflects charges related to the reporting delay for the troubled loan relationship, expenses for CECL implementation and legal fees from the year-ago terminated merger transaction. Primarily as a result of higher noninterest expense, the efficiency ratio increased to 64.0% in the third quarter from 59.4% in the prior quarter.

	For the Three Months Ended (in thousands)													Percentage Change
	Sep 30,		Jun 30,		Mar 31,			Dec 31,			Sep 30,			Q3-19			Q3-19
	2019		2019		2019			2018			2018			vs. Q2-19			vs. Q3-18
Noninterest Expense
Salaries and employee benefits	$	17,530	$	16,881	$	15,738		$	15,845		$	17,436			3.8	%		0.5	%
Occupancy and equipment		4,528		3,468		4,521			4,105			3,685			30.6	%		22.9	%
Data processing		2,410		2,140		2,083			1,894			1,745			12.6	%		38.1	%
Professional fees		2,826		1,983		1,649			1,969			1,626			42.5	%		73.8	%
Supplies and communication		726		649		844			797			805			11.9	%		-9.8	%
Advertising and promotion		927		945		760			1,316			814			-1.9	%		13.9	%
Merger and integration costs		-		-		-			-			466			-			-100.0	%
Off-balance sheet loss allowance provision (income)		209		233		(339	)		82			-			-10.3	%		0.0	%
All other operating expenses		3,291		3,687		3,728			3,669			2,872			-10.7	%		14.6	%
subtotal		32,447		29,986		28,984			29,677			29,449			8.2	%		10.2	%
Other real estate owned expense (income)		160		158		81			(378	)		(441	)		1.3	%		-136.3	%
Total noninterest expense	$	32,607	$	30,144	$	29,065		$	29,299		$	29,008			8.2	%		12.4	%

Hanmi recorded a provision for income taxes of $4.3 million for the third quarter of 2019, representing an effective tax rate of 25.9% compared with $1.2 million, representing an effective tax rate of 31.5% for the second quarter of 2019. For the first nine months of 2019, the effective tax rate was 28.5%.

Financial Position
Total assets were $5.53 billion at September 30, 2019, a 0.3% increase from $5.51 billion at June 30, 2019.

Loans and leases receivable, before the allowance for loan and lease losses, were $4.57 billion at September 30, 2019, compared with $4.56 billion at June 30, 2019. Hanmi continued to emphasize growth in commercial loans and leases, while allowing residential mortgages to decline through amortization. Loans held for sale, representing the guaranteed portion of SBA loans, were $6.6 million at September 30, 2019 compared with $6.0 million at the end of the second quarter.

Loans and leases receivable, before the allowance for loan and lease losses, were $4.58 billion at September 30, 2018.

	As of (in thousands)										Percentage Change
	Sep 30,		Jun 30,		Mar 31,		Dec 31,		Sep 30,		Q3-19			Q3-19
	2019		2019		2019		2018		2018		vs. Q2-19			vs. Q3-18
Loan and Lease Portfolio
Commercial real estate loans	$	3,209,752	$	3,213,135	$	3,230,526	$	3,257,792	$	3,275,382		-0.1	%		-2.0	%
Residential real estate loans		436,576		458,327		483,830		500,563		516,968		-4.7	%		-15.6	%
Commercial and industrial loans		441,210		409,502		422,502		429,903		396,383		7.7	%		11.3	%
Lease receivables		467,777		460,519		425,530		398,858		379,455		1.6	%		23.3	%
Consumer loans		14,522		14,319		13,232		13,424		14,695		1.4	%		-1.2	%
Loans and leases receivable		4,569,837		4,555,802		4,575,620		4,600,540		4,582,883		0.3	%		-0.3	%
Loans held for sale		6,598		6,029		7,140		9,390		4,455		9.4	%		48.1	%
Total loans and leases	$	4,576,435	$	4,561,831	$	4,582,760	$	4,609,930	$	4,587,338		0.3	%		-0.2	%

For the third quarter of 2019, commercial real estate loans as a percentage of loans and leases receivable decreased to 70.2% compared with 71.5% for the same period last year.

New loan and lease production in the 2019 third quarter was $217.5 million at an average rate of 5.54% while the average rate of the loans that paid off during the period was 5.15%.

	For the Three Months Ended (in thousands)
	Sep 30,			Jun 30,			Mar 31,			Dec 31,			Sep 30,
	2019			2019			2019			2018			2018
New Loan & Lease Production
Commercial real estate loans	$	78,039		$	105,527		$	46,531		$	87,523		$	112,748
Commercial and industrial loans		51,093			48,451			33,643			68,113			32,714
SBA loans		34,114			19,970			29,976			30,758			25,388
Lease receivable		52,333			77,983			69,577			59,023			64,284
Consumer loans		1,882			450			122			831			2,873
subtotal		217,461			252,381			179,849			246,248			238,007
Net line utilization		(4,012	)		(52,404	)		19,581			(21,715	)		(21,423	)
Loan purchases		-			-			-			-			2,160
Payoffs & amortization		(174,045	)		(201,617	)		(207,784	)		(184,891	)		(156,376	)
Loan sales		(24,286	)		(16,650	)		(15,459	)		(18,210	)		(19,751	)
Charge-offs		(916	)		(1,527	)		(1,107	)		(3,775	)		(1,245	)
Other real estate owned		(168	)		-			-			-			(615	)
Loans and leases-beginning balance	$	4,555,803		$	4,575,620		$	4,600,540		$	4,582,883		$	4,542,126
Loans and leases-ending balance	$	4,569,837		$	4,555,803		$	4,575,620		$	4,600,540		$	4,582,883

Deposits decreased to $4.69 billion at the end of the 2019 third quarter from $4.76 billion at the end of the preceding quarter. The decrease reflects an 11.6% decline in time deposits offset by a 5.8% increase in noninterest-bearing demand deposits. The average loan-to-deposit ratio for the third quarter was 97.6% compared with 94.6% in the second quarter.

Deposits increased 1.6% from $4.61 billion at the end of the third quarter last year, as money market and savings deposits and non interest-bearing demand deposits increased 7.5% and 5.7%, respectively.

	As of (in thousands)											Percentage Change
	Sep 30,		Jun 30,		Mar 31,		Dec 31,		Sep 30,			Q3-19			Q3-19
	2019		2019		2019		2018		2018			vs. Q2-19			vs. Q3-18
Deposit Portfolio
Demand: noninterest-bearing	$	1,388,121	$	1,312,577	$	1,316,114	$	1,284,530	$	1,313,777			5.8	%		5.7	%
Demand: interest-bearing		84,155		80,248		85,946		87,582		90,586			4.9	%		-7.1	%
Money market and savings		1,590,037		1,528,000		1,543,299		1,573,622		1,478,631			4.1	%		7.5	%
Time deposits		1,627,828		1,841,243		1,874,816		1,801,501		1,731,428			-11.6	%		-6.0	%
Total deposits	$	4,690,141	$	4,762,068	$	4,820,175	$	4,747,235	$	4,614,422			-1.5	%		1.6	%
											-

At September 30, 2019, stockholders’ equity was $574.5 million, compared with $564.5 million at June 30, 2019. Tangible common stockholders’ equity was $562.6 million, or 10.20% of tangible assets, compared with $552.4 million, or 10.04% of tangible assets at June 30, 2019. Tangible book value per share increased to $18.05 from $17.83 in the second quarter.

Hanmi continues to be well capitalized, with a preliminary Tier 1 risk-based capital ratio of 12.04% and a total risk-based capital ratio of 15.23% at September 30, 2019, versus 11.83% and 14.99%, respectively, at June 30, 2019.  

	As of															Amount Change
	Sep 30,			Jun 30,			Mar 31,			Dec 31,			Sep 30,			Q3-19		Q3-19
	2019			2019			2019			2018			2018			vs. Q2-19		vs. Q3-18
Regulatory Capital ratios (1)
Hanmi Financial
Total risk-based capital		15.23	%		14.99	%		14.17	%		14.54	%		15.01	%		0.24		0.22
Tier 1 risk-based capital		12.04	%		11.83	%		11.94	%		11.74	%		12.21	%		0.21		-0.17
Common equity tier 1 capital		11.61	%		11.41	%		11.52	%		11.32	%		11.79	%		0.20		-0.18
Tier 1 leverage capital ratio		10.44	%		10.20	%		10.39	%		10.18	%		10.53	%		0.24		-0.09
Hanmi Bank
Total risk-based capital		14.81	%		14.62	%		14.37	%		14.19	%		14.76	%		0.19		0.05
Tier 1 risk-based capital		13.69	%		13.54	%		13.64	%		13.47	%		14.05	%		0.15		-0.36
Common equity tier 1 capital		13.69	%		13.54	%		13.64	%		13.47	%		14.05	%		0.15		-0.36
Tier 1 leverage capital ratio		11.90	%		11.67	%		11.88	%		11.67	%		12.11	%		0.23		-0.21
(1)  Preliminary ratios for September 30, 2019

Hanmi declared a cash dividend of $0.24 per common share on its common stock in the 2019 third quarter. The dividend was paid on August 30, 2019, to stockholders of record as of the close of business on August 9, 2019.

Asset Quality
Loans and leases 30 to 89 days past due and still accruing were 0.18% of loans and leases at the end of the third quarter of 2019, compared with 0.25% at the end of the second quarter.

Classified loans were $80.7 million at September 30, 2019 compared with $75.7 million at the end of the second quarter, while special mention loans were $27.4 million at the end of the third quarter compared with $23.8 million at June 30, 2019.

Nonperforming loans and leases were $64.7 million at the end of the third quarter of 2019, or 1.42% of loans and leases compared with $63.0 million for the second quarter, or 1.38% of the portfolio.

Nonperforming assets were $65.1 million at the end of the third quarter of 2019, or 1.18% of assets, compared with $63.5 million, or 1.15% of assets, at the end of the prior quarter.

The troubled loan relationship identified in the 2019 second quarter, included in both the classified and nonaccrual categories, was $40.0 million at September 30, 2019, compared with $40.7 million at June 30, 2019. The decline reflects payments applied to the loans outstanding and the specific allowance remained unchanged at $15.7 million at the end of the third quarter. The $25.0 million commercial loan relationship previously identified in the 2019 first quarter declined to $2.1 million through payments; there were no charge-offs. The balance remaining at the end of the third quarter represents nonaccrual real estate secured loans expected to be paid-off from pending real estate sales.

Gross charge-offs for the third quarter of 2019 were $0.9 million compared with $1.5 million for the preceding quarter. Recoveries of previously charged-off loans and leases for the third quarter of 2019 were $0.6 million compared with $1.3 million for the preceding quarter. As a result, net charge-offs were $0.3 million for the third quarter of 2019, compared with $0.2 million for the second quarter of 2019. For the third and second quarters of 2019, net charge-offs were 0.02% of average loans and leases, respectively.

The allowance for loan and lease losses was $50.7 million as of September 30, 2019, generating an allowance for loan and lease losses to loans and leases of 1.11% compared with 1.08% in the prior quarter.

	As of or for the Three Months Ended (in thousands)															Amount Change
	Sep 30,			Jun 30,			Mar 31,			Dec 31,			Sep 30,			Q3-19			Q3-19
	2019			2019			2019			2018			2018			vs. Q2-19			vs. Q3-18
Asset Quality Data and Ratios
Delinquent loans and leases:
Loans and leases, 30 to 89 days past due and still accruing	$	8,085		$	11,210		$	9,242		$	10,674		$	6,901		$	(3,125	)	$	1,184
Delinquent loans and leases to loans and leases		0.18	%		0.25	%		0.20	%		0.23	%		0.15	%		-0.07			0.03
Criticized loans and leases:
Special mention	$	27,400		$	23,820		$	9,257		$	29,183		$	38,076		$	3,580		$	(10,676	)
Classified		80,734			75,686			53,087			29,542			33,199			5,048			47,535
Total criticized loans & leases	$	108,134		$	99,506		$	62,344		$	58,725		$	71,275		$	8,628		$	36,859
Nonperforming assets:
Nonaccrual loans and leases	$	64,194		$	63,031		$	40,041		$	15,525		$	18,283		$	1,163		$	45,911
Loans and leases 90 days or more past due and still accruing		544			-			-			4			-			544			544
Nonperforming loans and leases		64,738			63,031			40,041			15,529			18,283			1,707			46,455
Other real estate owned, net		330			507			622			663			877			(177	)		(547	)
Nonperforming assets	$	65,068		$	63,538		$	40,663		$	16,192		$	19,160		$	1,530		$	45,908
Nonperforming loans and leases to loans and leases		1.42	%		1.38	%		0.88	%		0.34	%		0.40	%
Nonperforming assets to assets		1.18	%		1.15	%		0.73	%		0.29	%		0.35	%
Allowance for loan and lease losses:
Balance at beginning of period	$	49,386		$	32,896		$	31,974		$	31,676		$	31,818
Loan and lease loss provision		1,602			16,699			1,117			3,041			200
Less: Net loan and lease charge-offs		276			209			195			2,743			342
Balance at end of period	$	50,712		$	49,386		$	32,896		$	31,974		$	31,676
Net loan and lease charge-offs to average loans and leases (1)		0.02	%		0.02	%		0.02	%		0.24	%		0.03	%
Allowance for loan and lease losses to loans and leases		1.11	%		1.08	%		0.72	%		0.70	%		0.69	%
Allowance for off-balance sheet items:
Balance at beginning of period	$	1,333		$	1,100		$	1,439		$	1,357		$	1,357
Provision (income) for off-balance sheet items		209			233			(339	)		82			-
Balance at end of period	$	1,542		$	1,333		$	1,100		$	1,439		$	1,357

Conference Call                            
Management will host a conference call today, October 22, 2019 at 2:00 p.m. PT (5:00 p.m. ET) to discuss these results. This call will also be broadcast live via the internet. Investment professionals and all current and prospective stockholders are invited to access the live call by dialing 1-877-407-9039 before 2:00 p.m. PT, using access code HANMI. To listen to the call online, either live or archived, visit the Investor Relations page of Hanmi’s website at www.hanmi.com.

About Hanmi Financial Corporation
Headquartered in Los Angeles, California, Hanmi Financial Corporation owns Hanmi Bank, which serves multi-ethnic communities through its network of 35 full-service branches and 9 loan production offices in California, Texas, Illinois, Virginia, New Jersey, New York, Colorado, Washington and Georgia. Hanmi Bank specializes in real estate, commercial, SBA and trade finance lending to small and middle market businesses. Additional information is available at www.hanmi.com.

Forward-Looking Statements
This press release contains forward-looking statements, which are included in accordance with the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. 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. All statements 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 plans, strategic alternatives for a possible business combination, merger or sale transaction, and other similar forecasts and statements of expectation and statements of assumption underlying any of the foregoing. These statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to differ from those expressed or implied by the forward-looking statement. These factors include the following: failure to maintain adequate levels of capital and liquidity to support our operations; the effect of potential future supervisory action against us or Hanmi Bank; our ability to remediate any material weakness in our internal controls over financial reporting; general economic and business conditions internationally, nationally and in those areas in which we operate; volatility and deterioration in the credit and equity markets; changes in consumer spending, borrowing and savings habits; availability of capital from private and government sources; 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; risks of natural disasters; a failure in or breach of our operational or security systems or infrastructure, including cyberattacks; the failure to maintain current technologies; inability to successfully implement future information technology enhancements; difficult business and economic conditions that can adversely affect our industry and business, including competition and lack of soundness of other financial institutions, fraudulent activity and negative publicity; risks associated with Small Business Administration loans; 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; the imposition of tariffs or other domestic or international governmental policies impacting the value of the products of our borrowers; failure to attract or retain key employees; changes in governmental regulation, including, but not limited to, any increase in FDIC insurance premiums; 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; ability to identify a suitable strategic partner or to consummate a strategic transaction; adequacy of our allowance for loan and lease losses; credit quality and the effect of credit quality on our provision for loan and lease losses and allowance for loan and lease 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; changes in securities markets; and risks as it relates to cyber security against our information technology. In addition, we set forth certain risks in our reports filed with the U.S. Securities and Exchange Commission, including, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2018, our Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K that we will file hereafter, which could cause actual results to differ from those projected. We undertake no obligation to update such forward-looking statements except as required by law.

Investor Contacts:
Romolo (Ron) Santarosa
Senior Executive Vice President & Chief Financial Officer
213-427-5636

Lasse Glassen
Investor Relations / Addo Investor Relations
310-829-5400

Hanmi Financial Corporation and Subsidiaries
Consolidated Balance Sheets (Unaudited)
(In thousands)

	September 30,			June 30,			Percentage		September 30,			Percentage
	2019			2019			Change		2018			Change
Assets
Cash and due from banks	$	150,678		$	130,851		15.2	%	$	159,617		-5.6	%
Securities available for sale, at fair value		621,815			639,995		-2.8	%		572,236		8.7	%
Loans held for sale, at the lower of cost or fair value		6,598			6,029		9.4	%		4,455		48.1	%
Loans and leases receivable, net of allowance for loan and lease losses		4,519,125			4,506,416		0.3	%		4,551,207		-0.7	%
Accrued interest receivable		11,723			12,946		-9.4	%		13,646		-14.1	%
Premises and equipment, net		27,271			26,698		2.1	%		28,552		-4.5	%
Customers' liability on acceptances		33			849		-96.1	%		1,265		-97.4	%
Servicing assets		7,436			7,567		-1.7	%		8,878		-16.2	%
Goodwill and other intangible assets, net		11,950			12,028		-0.6	%		12,273		-2.6	%
Federal Home Loan Bank ("FHLB") stock, at cost		16,385			16,385		0.0	%		16,385		0.0	%
Bank-owned life insurance		52,500			52,222		0.5	%		51,372		2.2	%
Prepaid expenses and other assets		102,468			99,766		2.7	%		67,156		52.6	%
Total assets	$	5,527,982		$	5,511,752		0.3	%	$	5,487,042		0.7	%
Liabilities and Stockholders' Equity
Liabilities:
Deposits:
Noninterest-bearing	$	1,388,121		$	1,312,577		5.8	%	$	1,313,777		5.7	%
Interest-bearing		3,302,020			3,449,491		-4.3	%		3,300,645		0.0	%
Total deposits		4,690,141			4,762,068		-1.5	%		4,614,422		1.6	%
Accrued interest payable		10,076			11,438		-11.9	%		8,153		23.6	%
Bank's liability on acceptances		33			849		-96.1	%		1,265		-97.4	%
Borrowings		75,000			-		-			160,000		-53.1	%
Subordinated debentures		118,232			118,087		0.1	%		117,670		0.5	%
Accrued expenses and other liabilities		59,973			54,852		9.3	%		17,784		237.2	%
Total liabilities		4,953,455			4,947,294		0.1	%		4,919,294		0.7	%
Stockholders' equity:
Common stock		33			33		0.0	%		33		0.0	%
Additional paid-in capital		574,957			571,105		0.7	%		568,861		1.1	%
Accumulated other comprehensive income (loss)		3,708			2,375		56.1	%		(11,295	)	-132.8	%
Retained earnings		104,927			100,021		4.9	%		93,768		11.9	%
Less treasury stock		(109,098	)		(109,076	)	0.0	%		(83,619	)	30.5	%
Total stockholders' equity		574,527			564,458		1.8	%		567,748		1.2	%
Total liabilities and stockholders' equity	$	5,527,982		$	5,511,752		0.3	%	$	5,487,042		0.7	%

Hanmi Financial Corporation and Subsidiaries
Consolidated Statements of Income (Unaudited)
(In thousands, except share and per share data)

	Three Months Ended
	September 30,		June 30,			Percentage		September 30,			Percentage
	2019		2019			Change		2018			Change
Interest and dividend income:
Interest and fees on loans and leases	$	57,929	$	56,872		1.9	%	$	56,361		2.8	%
Interest on securities		3,769		3,770		-0.0	%		3,238		16.4	%
Dividends on FHLB stock		286		283		1.1	%		286		0.0	%
Interest on deposits in other banks		193		557		-65.4	%		151		27.8	%
Total interest and dividend income		62,177		61,482		1.1	%		60,036		3.6	%
Interest expense:
Interest on deposits		15,995		16,728		-4.4	%		11,694		36.8	%
Interest on borrowings		367		-		-			1,264		-71.0	%
Interest on subordinated debentures		1,757		1,764		-0.4	%		1,749		0.5	%
Total interest expense		18,119		18,492		-2.0	%		14,707		23.2	%
Net interest income before provision for loan and lease losses		44,058		42,990		2.5	%		45,329		-2.8	%
Loan and lease loss provision		1,602		16,699		-90.4	%		200		701.0	%
Net interest income after provision for loan and lease losses		42,456		26,291		61.5	%		45,129		-5.9	%
Noninterest income:
Service charges on deposit accounts		2,518		2,486		1.3	%		2,513		0.2	%
Trade finance and other service charges and fees		1,191		1,204		-1.1	%		1,128		5.6	%
Gain on sale of Small Business Administration ("SBA") loans		1,767		1,060		66.7	%		1,114		58.6	%
Servicing income		614		600		2.3	%		673		-8.8	%
Bank-owned life insurance income		279		281		-0.7	%		285		-2.1	%
Net gain on sales of securities		-		570		-100.0	%		19		-100.0	%
Other operating income		491		1,528		-67.9	%		483		1.7	%
Total noninterest income		6,860		7,729		-11.2	%		6,215		10.4	%
Noninterest expense:
Salaries and employee benefits		17,530		16,881		3.8	%		17,436		0.5	%
Occupancy and equipment		4,528		3,468		30.6	%		3,685		22.9	%
Data processing		2,410		2,140		12.6	%		1,745		38.1	%
Professional fees		2,826		1,983		42.5	%		1,626		73.8	%
Supplies and communications		726		649		11.9	%		805		-9.8	%
Advertising and promotion		927		945		-1.9	%		814		13.9	%
Other real estate owned expense		160		158		1.3	%		(441	)	-136.3	%
Other operating expenses		3,500		3,920		-10.7	%		3,338		4.9	%
Total noninterest expense		32,607		30,144		8.2	%		29,008		12.4	%
Income before provision for income taxes		16,709		3,876		331.1	%		22,336		-25.2	%
Provision for income taxes		4,333		1,220		255.2	%		6,255		-30.7	%
Net income	$	12,376	$	2,656		366.0	%	$	16,081		-23.0	%
Basic earnings per share:	$	0.40	$	0.09				$	0.50
Diluted earnings per share:	$	0.40	$	0.09				$	0.50
Weighted-average shares outstanding:
Basic		30,830,445		30,685,301					32,155,132
Diluted		30,859,119		30,727,681					32,275,277
Common shares outstanding		31,173,881		30,975,163					32,087,236
Hanmi Financial Corporation and Subsidiaries
Consolidated Statements of Income (Unaudited)
(In thousands, except share and per share data)
	Nine Months Ended
	September 30,		September 30,			Percentage
	2019		2018			Change
Interest and dividend income:
Interest and fees on loans	$	173,135	$	161,643		7.1	%
Interest on securities		10,996		9,541		15.2	%
Dividends on FHLB stock		858		858		0.0	%
Interest on deposits in other banks		1,085		398		172.6	%
Total interest and dividend income		186,074		172,440		7.9	%
Interest expense:
Interest on deposits		48,406		28,944		67.2	%
Interest on borrowings		439		2,959		-85.2	%
Interest on subordinated debentures		5,293		5,170		2.4	%
Total interest expense		54,138		37,073		46.0	%
Net interest income before provision for loan and lease losses		131,936		135,367		-2.5	%
Loan and lease loss provision		19,418		949		1946.2	%
Net interest income after provision for loan and lease losses		112,518		134,418		-16.3	%
Noninterest income:
Service charges on deposit accounts		7,362		7,352		0.1	%
Trade finance and other service charges and fees		3,519		3,449		2.0	%
Gain on sale of Small Business Administration ("SBA") loans		3,752		3,970		-5.5	%
Servicing income		1,572		1,755		-10.4	%
Bank-owned life insurance income		840		819		2.6	%
Net gain (loss) on sales of securities		1,295		(341	)	-479.8	%
Other operating income		2,503		1,216		105.8	%
Total noninterest income		20,843		18,220		14.4	%
Noninterest expense:
Salaries and employee benefits		50,149		53,590		-6.4	%
Occupancy and equipment		12,517		11,839		5.7	%
Data processing		6,633		4,976		33.3	%
Professional fees		6,459		4,210		53.4	%
Supplies and communications		2,220		2,206		0.6	%
Advertising and promotion		2,632		2,724		-3.4	%
Other real estate owned expense		400		(116	)	-444.8	%
Other operating expenses		10,807		8,845		22.2	%
Total noninterest expense		91,817		88,274		4.0	%
Income before provision for income taxes		41,544		64,364		-35.5	%
Income tax expense		11,840		17,880		-33.8	%
Net income	$	29,704	$	46,484		-36.1	%
Basic earnings per share:	$	0.96	$	1.44
Diluted earnings per share:	$	0.96	$	1.43
Weighted-average shares outstanding:
Basic		30,736,456		32,171,558
Diluted		30,769,160		32,306,041
Common shares outstanding		31,173,881		32,087,236

Hanmi Financial Corporation and Subsidiaries
Average Balance, Average Yield Earned, and Average Rate Paid (Unaudited)
(In thousands, except ratios)

	Three Months Ended
	September 30, 2019							June 30, 2019							September 30, 2018
				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
Interest-earning assets:
Loans and leases receivable (1)	$	4,519,770		$	57,929	5.08	%	$	4,491,377		$	56,872	5.08	%	$	4,551,284		$	56,361	4.91	%
Securities (2)		630,450			3,769	2.39	%		629,062			3,774	2.40	%		589,939			3,408	2.31	%
FHLB stock		16,385			286	6.93	%		16,385			283	6.93	%		16,385			286	6.93	%
Interest-bearing deposits in other banks		35,140			193	2.18	%		92,753			557	2.41	%		30,368			151	1.97	%
Total interest-earning assets		5,201,745			62,177	4.74	%		5,229,577			61,486	4.72	%		5,187,976			60,206	4.60	%
Noninterest-earning assets:
Cash and due from banks		99,492							100,916							124,072
Allowance for loan and lease losses		(49,762	)						(34,714	)						(32,172	)
Other assets		210,142							203,870							173,589
Total assets	$	5,461,617						$	5,499,649						$	5,453,465
Liabilities and Stockholders' Equity
Interest-bearing liabilities:
Deposits:
Demand: interest-bearing	$	82,665		$	31	0.15	%	$	83,932		$	32	0.15	%	$	92,090		$	36	0.16	%
Money market and savings		1,555,639			6,180	1.58	%		1,541,975			6,083	1.58	%		1,377,739			4,011	1.16	%
Time deposits		1,692,419			9,784	2.29	%		1,863,686			10,613	2.28	%		1,687,827			7,647	1.80	%
Total interest-bearing deposits		3,330,723			15,995	1.91	%		3,489,593			16,728	1.92	%		3,157,656			11,694	1.47	%
Borrowings		74,239			367	1.96	%		59			-	0.00	%		240,054			1,264	2.09	%
Subordinated debentures		118,145			1,757	5.92	%		118,007			1,764	5.96	%		117,584			1,749	5.92	%
Total interest-bearing liabilities		3,523,107			18,119	2.04	%		3,607,659			18,492	2.06	%		3,515,294			14,707	1.66	%
Noninterest-bearing liabilities and equity:
Demand deposits: noninterest-bearing		1,300,704							1,257,184							1,323,688
Other liabilities		71,631							66,053							29,846
Stockholders' equity		566,175							568,753							584,637
Total liabilities and stockholders' equity	$	5,461,617						$	5,499,649						$	5,453,465
Net interest income (tax equivalent basis)				$	44,058						$	42,994						$	45,499
Cost of deposits						1.37	%						1.41	%						1.04	%
Net interest spread (taxable equivalent basis)						2.70	%						2.66	%						2.94	%
Net interest margin (taxable equivalent basis)						3.36	%						3.30	%						3.48	%
(1)  Includes loans held for sale
(2)  Amounts calculated on a fully taxable equivalent basis using the federal tax rate in effect for the periods presented.

Hanmi Financial Corporation and Subsidiaries
Average Balance, Average Yield Earned, and Average Rate Paid (Unaudited)
(In thousands, except ratios)

	Nine Months Ended
	September 30, 2019							September 30, 2018
				Interest		Average					Interest		Average
	Average			Income /		Yield /		Average			Income /		Yield /
	Balance			Expense		Rate		Balance			Expense		Rate
Assets
Interest-earning assets:
Loans and leases receivable (1)	$	4,514,707		$	173,135	5.13	%	$	4,426,369		$	161,643	4.88	%
Securities (2)		616,503			11,141	2.41	%		590,062			10,087	2.28	%
FHLB stock		16,385			858	7.00	%		16,385			858	7.00	%
Interest-bearing deposits in other banks		60,240			1,085	2.41	%		30,526			398	1.74	%
Total interest-earning assets		5,207,835			186,219	4.78	%		5,063,342			172,986	4.57	%
Noninterest-earning assets:
Cash and due from banks		103,098							123,680
Allowance for loan and lease losses		(38,885	)						(32,175	)
Other assets		193,944							174,685
Total assets	$	5,465,992						$	5,329,532
Liabilities and Stockholders' Equity
Interest-bearing liabilities:
Deposits:
Demand: interest-bearing	$	83,953		$	93	0.15	%	$	92,009		$	72	0.10	%
Money market and savings		1,541,548			17,940	1.56	%		1,422,514			10,883	1.02	%
Time deposits		1,802,303			30,373	2.25	%		1,561,541			17,989	1.54	%
Total interest-bearing deposits		3,427,804			48,406	1.89	%		3,076,064			28,944	1.26	%
Borrowings		28,536			439	2.06	%		211,264			2,959	1.87	%
Subordinated debentures		118,006			5,293	5.97	%		117,455			5,170	5.86	%
Total interest-bearing liabilities		3,574,346			54,138	2.03	%		3,404,783			37,073	1.46	%
Noninterest-bearing liabilities:
Demand deposits: noninterest-bearing		1,270,029							1,318,713
Other liabilities		56,607							30,140
Stockholders' equity		565,010							575,896
Total liabilities and stockholders' equity	$	5,465,992						$	5,329,532
Net interest income (tax equivalent basis)				$	132,081						$	135,913
Cost of deposits						1.38	%						0.88	%
Net interest spread (taxable equivalent basis)						2.75	%						3.11	%
Net interest margin (taxable equivalent basis)						3.39	%						3.59	%
(1)  Includes loans held for sale
(2)  Amounts calculated on a fully taxable equivalent basis using the federal tax rate in effect for the periods presented.

Non-GAAP Financial Measures

Tangible Common Equity to Tangible Assets Ratio

Tangible common equity to tangible assets ratio is supplemental financial information determined by a method other than in accordance with U.S. generally accepted accounting principles (“GAAP”). This non-GAAP measure is used by management in the analysis of Hanmi’s capital strength. Tangible equity is calculated by subtracting goodwill and other intangible assets from stockholders’ equity. Banking and financial institution regulators also exclude goodwill and other intangible assets from stockholders’ equity when assessing the capital adequacy of a financial institution. Management believes the presentation of this financial measure excluding the impact of these items provides useful supplemental information that is essential to a proper understanding of the capital strength of Hanmi. This disclosure should not be viewed as a substitution for results determined in accordance with GAAP, nor is it necessarily comparable to non-GAAP performance measures that may be presented by other companies.

The following table reconciles this non-GAAP performance measure to the GAAP performance measure for the periods indicated:

Tangible Common Equity to Tangible Assets Ratio
(Unaudited)
(In thousands, except share, per share data and ratios)

	September 30,			June 30,			March 31,			December 31,			September 30,
Hanmi Financial Corporation	2019			2019			2019			2018			2018
Assets	$	5,527,982		$	5,511,752		$	5,571,068		$	5,502,219		$	5,487,042
Less goodwill and other intangible assets		(11,950	)		(12,028	)		(12,105	)		(12,182	)		(12,273	)
Tangible assets	$	5,516,032		$	5,499,724		$	5,558,963		$	5,490,037		$	5,474,769
Stockholders' equity (1)	$	574,527		$	564,458		$	564,292		$	552,568		$	567,748
Less goodwill and other intangible assets		(11,950	)		(12,028	)		(12,105	)		(12,182	)		(12,273	)
Tangible stockholders' equity (1)	$	562,577		$	552,430		$	552,187		$	540,386		$	555,475
Stockholders' equity to assets		10.39	%		10.24	%		10.13	%		10.04	%		10.35	%
Tangible common equity to tangible assets (1)		10.20	%		10.04	%		9.93	%		9.84	%		10.15	%
Common shares outstanding		31,173,881			30,975,163			30,860,533			30,928,437			32,087,236
Tangible common equity per common share	$	18.05		$	17.83		$	17.89		$	17.47		$	17.31
(1)  There were no preferred shares outstanding at the periods indicated.

XML

Cover	Oct. 22, 2019
Document Type	8-K
Amendment Flag	false
Document Period End Date	Oct. 22, 2019
Entity File Number	000-30421
Entity Registrant Name	HANMI FINANCIAL CORPORATION
Entity Central Index Key	0001109242
Entity Tax Identification Number	95-4788120
Entity Incorporation, State or Country Code	DE
Entity Address, Address Line One	3660 Wilshire Boulevard, PH-A
Entity Address, City or Town	Los Angeles
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	90010
City Area Code	213
Local Phone Number	382-2200
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock, $0.001 par value
Trading Symbol	HAFC
Security Exchange Name	NASDAQ
Entity Emerging Growth Company	false