##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-K
 þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the Fiscal Year Ended December 31, 2009
 or
 o
    
    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.)3660 Wilshire Boulevard, Penthouse Suite A 
Los Angeles, California
    
    90010(Address of Principal Executive Offices)
    
    (Zip Code)
 (213) 382-2200  (Registrants Telephone Number, Including Area Code)
  Title of Each Class
    
    Name of Each Exchange on Which RegisteredCommon Stock, $0.001 Par Value
    
    NASDAQ Global Select Market
  None 
 (Title of Class)
 o þ
 o þ
 þ o
 o o
 o
  Large Accelerated Filer o
    
    Accelerated Filer þ
    

Non-Accelerated Filer o
    
    Smaller Reporting Company o(Do Not Check if a Smaller Reporting Company)
 o þ
   Documents Incorporated By Reference Herein:




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##### 



HANMI FINANCIAL CORPORATION
ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR ENDED DECEMBER 31, 2009
TABLE OF CONTENTS
 PageCautionary Note Regarding Forward-Looking Statements
    
    
    1PART IItem 1.
    
    Business
    
    
    2Item 1A.
    
    Risk Factors
    
    
    31Item 1B.
    
    Unresolved Staff Comments
    
    
    41Item 2.
    
    Properties
    
    
    41Item 3.
    
    Legal Proceedings
    
    
    42Item 4.
    
    Submission of Matters to a Vote of Security Holders
    
    
    42PART IIItem 5.
    
    Market for Registrants Common Equity, Related Stockholder Matters
and Issuer Purchases of Equity Securities
    
    
    42Item 6.
    
    Selected Financial Data
    
    
    44Item 7.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    47Item 7A.
    
    Quantitative and Qualitative Disclosures About Market Risk
    
    
    76Item 8.
    
    Financial Statements and Supplementary Data
    
    
    76Item 9.
    
    Changes In and Disagreements With Accountants on Accounting and Financial Disclosure
    
    
    76Item 9A.
    
    Controls and Procedures
    
    
    76Item 9B.
    
    Other Information
    
    
    81PART IIIItem 10.
    
    Directors, Executive Officers and Corporate Governance
    
    
    81Item 11.
    
    Executive Compensation
    
    
    81Item 12.
    
    Security Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters
    
    
    81Item 13.
    
    Certain Relationships and Related Transactions, and Director Independence
    
    
    82Item 14.
    
    Principal Accounting Fees and Services
    
    
    82PART IVItem 15.
    
    Exhibits, Financial Statement Schedules
    
    
    82Index to Consolidated Financial Statements
    
    
    83Report of Independent Registered Public Accounting Firm
    
    
    84Consolidated Balance Sheets as of December 31, 2009 and 2008
    
    
    85Consolidated Statements of Operations for the Years Ended December 31, 2009, 2008
and 2007
    
    
    86Consolidated Statements of Changes in Stockholders Equity and Comprehensive
Income for the Years Ended December 31, 2009, 2008 and 2007
    
    
    87Consolidated Statements of Cash Flows for the Years Ended December 31, 2009,
2008 and 2007
    
    
    88Notes to Consolidated Financial Statements
    
    
    89Signatures
    
    
    143Exhibit Index
    
    
    144EX-23EX-31.1EX-31.2EX-32.1EX-32.2




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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
 Item 1. Business, Item 7. Managements Discussion and Analysis
of Financial Condition and Results of Operations
 
    
    failure to continue as a going concern;
 
    
    failure to maintain adequate levels of capital and liquidity to support our operations;
 
    
    a significant number of our customers failing to perform under their loans and other
terms of credit agreements;
 
    
    the effect of regulatory orders we have entered into and potential future supervisory
action against us or Hanmi Bank;
 
    
    fluctuations in interest rates and a decline in the level of our interest rate spread;
 
    
    failure to attract or retain deposits;
 
    
    sources of liquidity available to us and to Hanmi Bank becoming limited or our
potential inability to access sufficient sources of liquidity when needed or the
requirement that we obtain government waivers to do so;
 
    
    adverse changes in domestic or global financial markets, economic conditions or
business conditions;
 
    
    regulatory restrictions on Hanmi Banks ability to pay dividends to us and on our
ability to make payments on our obligations;
 
    
    significant reliance on loans secured by real estate and the associated vulnerability
to downturns in the local real estate market, natural disasters and other variables
impacting the value of real estate;
 
    
    failure to attract or retain our key employees;
 
    
    failure to maintain our status as a financial holding company;
 
    
    adequacy of our allowance for loan losses;
 
    
    credit quality and the effect of credit quality on our provision for credit losses and
allowance for loan losses;
 
    
    volatility and disruption in financial, credit and securities markets, and the price of
our common stock;
 
    
    deterioration in the financial markets that may result in other-than-temporary
impairment charges relating to our securities portfolio;
 
    
    competition in our primary market areas;
 
    
    demographic changes in our primary market areas; and
 
    
    significant government regulations, legislation and potential changes thereto.
 Item 1A. Risk Factors, Item 7.
Managements Discussion and Analysis of Financial Condition and Results of Operations  Interest
Rate Risk Management " Capital Resources and Liquidity.
 1




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##### Table of Contents



PART I
 
 ITEM 1.
    
    BUSINESS
 Written Agreement and Final Order
    Ratio of Tangible ShareholdersDate
    
    Equity to Total Tangible AssetsBy December 31, 2009
    
    Not Less Than 7.0 PercentBy July 31, 2010
    
    Not Less Than 9.0 PercentFrom December 31, 2010 and Until the Order is Terminated
    
    Not Less Than 9.5 Percent
 Note 15  Regulatory Matters
 Going Concern
    2




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General
      Year Ended December 31,2009
    
    
    2008
    
    
    2007(Dollars in Thousands)Interest and Fees on Loans
    
    $
    173,318
    
    
    
    80.1
    %
    
    $
    223,942
    
    
    
    82.6
    %
    
    $
    261,992
    
    
    
    81.6
    %Interest and Dividends on Investments
    
    
    8,634
    
    
    
    4.0
    %
    
    
    14,022
    
    
    
    5.2
    %
    
    
    17,867
    
    
    
    5.6
    %Other Interest Income
    
    
    2,195
    
    
    
    1.0
    %
    
    
    219
    
    
    
    0.1
    %
    
    
    1,037
    
    
    
    0.3
    %Service Charges on Deposit Accounts
    
    
    17,054
    
    
    
    7.9
    %
    
    
    18,463
    
    
    
    6.8
    %
    
    
    18,061
    
    
    
    5.6
    %Other Non-Interest Income
    
    
    15,056
    
    
    
    7.0
    %
    
    
    14,391
    
    
    
    5.3
    %
    
    
    21,945
    
    
    
    6.9
    %Total Revenues
    
    $
    216,257
    
    
    
    100.0
    %
    
    $
    271,037
    
    
    
    100.0
    %
    
    $
    320,902
    
    
    
    100.0
    %
 Market Area
  3




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Lending Activities
  Real Estate Loans
  Commercial Property
  The Wall Street
Journal
  4




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Construction
  
    
    maturities of two years or less;
 
    
    a floating rate of interest based on the Bank Prime Rate or the WSJ Prime Rate;
 
    
    minimum cash equity of 35 percent of project cost;
 
    
    reserve of anticipated interest costs during construction or advance of fees;
 
    
    first lien position on the underlying real estate;
 
    
    loan-to-value ratios at time of origination generally not exceeding 65 percent; and
 
    
    recourse against the borrower or a guarantor in the event of default.
  
    
    the uncertain value of the project prior to completion;
 
    
    the inherent uncertainty in estimating construction costs, which are often beyond the
borrowers control;
 
    
    construction delays and cost overruns;
 
    
    possible difficulties encountered in connection with municipal or other governmental
regulations during construction; and
 
    
    the difficulty in accurately evaluating the market value of the completed project.
  Residential Property
  Commercial and Industrial Loans
  5




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Commercial Term Loans
  Commercial Lines of Credit
  SBA Loans
   International Trade Finance
  6




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Consumer Loans
   Off-Balance Sheet Commitments
  Lending Procedures and Loan Limits
    7




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Allowance for Loan Losses, Allowance for Off-Balance Sheet Items and Provision for Credit Losses
  Interagency Policy Statement on the Allowance for Loan and Lease Losses
 Deposits
  Website
 www.hanmi.com www.sec.gov
 Employees
  Insurance
  Competition
  8




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Economic Developments, Legislation and Regulatory Initiatives
    9




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Ratio of Tangible ShareholdersDate
    
    Equity to Total Tangible AssetsBy December 31, 2009
    
    Not Less Than 7.0 PercentBy July 31, 2010
    
    Not Less Than 9.0 PercentFrom December 31, 2010 and Until the Order is Terminated
    
    Not Less Than 9.5 Percent
   10




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Supervision and Regulation
 General
  11




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Hanmi Financial
  
    
    require periodic reports and such additional information as the FRB may require.
 
    
    require us to maintain certain levels of capital. See Capital Standards.
 
    
    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. A bank holding companys failure to meet its obligations to serve as a source of
strength to its subsidiary banks will generally be considered by the FRB to be an unsafe
and unsound banking practice or a violation of FRB regulations, or both.
 
    
    terminate an activity or terminate control of or liquidate or divest certain
subsidiaries, affiliates or investments if the FRB 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.
 
    
    take formal or informal enforcement action or issue other supervisory directives and
assess civil money penalties for non-compliance under certain circumstances.
 
    
    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 our securities in certain situations.
 
    
    limit or prohibit and require FRB prior approval of the payment of dividends.
 
    
    require financial holding companies to divest non-banking activities or subsidiary
banks if they fail to meet certain financial holding company standards.
 
    
    approve acquisitions and mergers with other banks or savings institutions and consider
certain competitive, management, financial and other factors in granting these approvals.
Similar California and other state banking agency approvals may also be required.
  12




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##### Table of Contents



Regulatory Restrictions on Dividends; Source of Strength
    Activities Closely Related to Banking
 de novo
 13




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Gramm-Leach Bliley Act; Financial Holding Companies
   
    
    states that the bank holding company elects to become a financial holding company;
 
    
    provides the name and head office address of the bank holding company and each
depository institution controlled by the bank holding company;
 
    
    certifies that each depository institution controlled by the bank holding company is
well-capitalized as of the date the bank holding company submits its declaration;
 
    
    provides the capital ratios for all relevant capital measures as of the close of the
previous quarter for each depository institution controlled by the bank holding company;
and
 
    
    certifies that each depository institution controlled by the bank holding company is
well managed as of the date the bank holding company submits its declaration.
   
    
    financial in nature;
 
    
    incidental to such financial activity; or
    
    complementary to a financial activity provided it does not pose a substantial risk to the
safety and soundness of depository institutions or the financial system generally.
   14




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Privacy Policies
  Safe and Sound Banking Practices
   Annual Reporting; Examinations
  Capital Adequacy Requirements
    15




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Ratio of Tangible ShareholdersDate
    
    Equity to Total Tangible AssetsBy December 31, 2009
    
    Not Less Than 7.0 PercentBy July 31, 2010
    
    Not Less Than 9.0 PercentFrom December 31, 2010 and Until the Order is Terminated
    
    Not Less Than 9.5 Percent
  Imposition of Liability for Undercapitalized Subsidiaries
   Acquisitions by Bank Holding Companies
  Control Acquisitions
  16




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##### Table of Contents



Cross-guarantees
   Anti-Terrorism Legislation
   
    
    to conduct enhanced scrutiny of account relationships to guard against money laundering
and report any suspicious transaction;
 
    
    to ascertain the identity of the nominal and beneficial owners of, and the source of
funds deposited into, each account as needed to guard against money laundering and report
any suspicious transactions;
 
    
    to ascertain for any foreign bank, the shares of which are not publicly traded, the
identity of the owners of the foreign bank, and the nature and extent of the ownership
interest of each such owner; and
    
    to ascertain whether any foreign bank provides correspondent accounts to other foreign banks
and, if so, the
identity of those foreign banks and related due diligence information.
 17




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##### Table of Contents




    
    expeditiously search its records to determine whether it maintains or has maintained
accounts, or engaged in transactions with individuals or entities, listed in a request
submitted by the Financial Crimes Enforcement Network (FinCEN);
 
    
    notify FinCEN if an account or transaction is identified;
 
    
    designate a contact person to receive information requests;
    
    limit use of information provided by FinCEN to (i) reporting to FinCEN, (ii) determining
whether to establish or maintain an account or engage in a transaction, and (iii) assisting the financial
institution in complying with the Bank Secrecy Act; and
    
    maintain adequate procedures to protect the security and confidentiality of FinCEN requests.
   18




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Sarbanes-Oxley Act of 2002
     19




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Securities Registration
  The Bank
   
    
    require affirmative action to correct any conditions resulting from any violation or
practice;
 
    
    direct an increase in capital or establish specific minimum capital ratios;
 
    
    restrict the Banks growth geographically, by products and services or by mergers and
acquisitions;
 
    
    enter into informal non-public or formal public memoranda of understanding or written
agreements; enjoin unsafe and unsound practices and issue cease and desist orders to take
corrective action;
 
    
    remove officers and directors and assess civil monetary penalties; and
 
    
    take possession and close and liquidate the Bank.
  20




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Permissible Activities and Subsidiaries
    Brokered deposits
  21




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##### Table of Contents



Community Reinvestment Act
  Interstate Banking and Branching
  Federal Home Loan Bank System
  Federal Reserve System
  22




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Capital Standards
 Notes to
Consolidated Financial Statements, Note 15  Regulatory Matters.
     23




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Regulatory Capital Guidelines
    
    
    ActualAdequately
    
    
    Well
    
    
    Hanmi
    
    
    HanmiCapitalized
    
    
    Capitalized
    
    
    Bank
    
    
    FinancialTotal Risk-Based Capital Ratio
    
    
    8.00
    %
    
    
    10.00
    %
    
    
    9.07
    %
    
    
    9.12
    %Tier 1 Risk-Based Capital Ratio
    
    
    4.00
    %
    
    
    6.00
    %
    
    
    7.77
    %
    
    
    6.76
    %Tier 1 Leverage Ratio
    
    
    4.00
    %
    
    
    5.00
    %
    
    
    6.69
    %
    
    
    5.82
    %
  Notes to Consolidated
Financial Statements, Note 15  Regulatory Matters
 Prompt Corrective Action Regulations
  
    
    Well Capitalized Total risk-based capital ratio of 10.0 percent, Tier 1 risk-based
capital ratio of 6.0 percent, and leverage capital ratio of 5.0 percent, and not subject to
any order or written directive by any regulatory authority to meet and maintain a specific
capital level for any capital measure;
 
    
    Adequately Capitalized Total risk-based capital ratio of 8.0 percent, Tier 1
risk-based capital ratio of 4.0 percent, and leverage capital ratio of 4.0 percent (or 3.0
percent if the institution receives the highest rating from its primary regulator);
 
    
    Undercapitalized Total risk-based capital ratio of less than 8.0 percent, Tier 1
risk-based capital ratio of less than 4.0 percent, or leverage capital ratio of less than
4.0 percent (or 3.0 percent if the institution receives the highest rating from its primary
regulator);
 
    
    Significantly Undercapitalized Total risk-based capital ratio of less than 6.0
percent, Tier 1 risk-based capital ratio of less than 3.0 percent, or leverage capital
ratio of less than 3.0 percent; and
 
    
    Critically Undercapitalized Tangible equity to total assets of less than 2.0
percent.
   24




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##### Table of Contents



Note 15  Regulatory Matters
 FDIC Deposit Insurance
      25




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##### Table of Contents



Loans-to-One-Borrower
  Extensions of Credit to Insiders and Transactions with Affiliates
  
    
    a bank or bank holding companys executive officers, directors and principal
stockholders (i.e., in most cases, those persons who own, control or have power to vote
more than 10 percent of any class of voting securities);
 
    
    any company controlled by any such executive officer, director or stockholder; or
 
    
    any political or campaign committee controlled by such executive officer, director or
principal stockholder.
  
    
    must comply with loan-to-one-borrower limits;
 
    
    require prior full board approval when aggregate extensions of credit to the person
exceed specified amounts;
 
    
    must be made on substantially the same terms (including interest rates and collateral)
and follow credit-underwriting procedures no less stringent than those prevailing at the
time for comparable transactions with non-insiders;
 
    
    must not involve more than the normal risk of repayment or present other unfavorable
features; and
 
    
    in the aggregate limit not exceed the banks unimpaired capital and unimpaired surplus.
   
    
    prevent any affiliates from borrowing from the Bank unless the loans are secured by
marketable obligations of designated amounts;
 
    
    limit such loans and investments to or in any affiliate individually to 10 percent of
the Banks capital and surplus;
 
    
    limit such loans and investments to all affiliates in the aggregate to 20 percent of
the Banks capital and surplus; and
 
    
    require such loans and investments to or in any affiliate to be on terms and under
conditions substantially the same or at least as favorable to the Bank as those prevailing
for comparable transactions with non-affiliated parties.
  26




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Dividends
    Item 5. Market for Registrants Common Equity, Related Stockholder
Matters and Issuer Purchases of Equity Securities  Dividends
   27




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Bank Secrecy Act and USA PATRIOT Act
   28




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##### Table of Contents



Consumer Laws
  
    
    The Home Ownership and Equity Protection Act of 1994 requires extra disclosures and
consumer protections to borrowers from certain lending practices, such as practices deemed
to be predatory lending.
 
    
    Privacy policies are required by federal and state banking laws and regulations that
limit the ability of banks and other financial institutions to disclose non-public
information about consumers to non-affiliated third parties. The federal bank regulatory
agencies have adopted customer information security guidelines for safeguarding
confidential, personal customer information. The guidelines require each financial
institution, under the supervision and ongoing oversight of its Board of Directors or an
appropriate committee thereof, to create, implement and maintain a comprehensive written
information security program designed to ensure the security and confidentiality of
customer information, protect against any anticipated threats or hazards to the security or
integrity of such information, and protect against unauthorized access or use of such
information that could result in substantial harm or inconvenience to any customer.
 
    
    The Fair Credit Reporting Act, as amended by the Fair and Accurate Credit Transactions
Act, requires financial firms to help deter identity theft, including developing
appropriate fraud response programs, and gives consumers more control of their credit data.
 
    
    The Equal Credit Opportunity Act generally prohibits discrimination in any credit
transaction, whether for consumer or business purposes, on the basis of race, color,
religion, national origin, sex, marital status, age (except in limited circumstances),
receipt of income from public assistance programs, or good faith exercise of any rights
under the Consumer Credit Protection Act.
 
    
    The Truth in Lending Act requires that credit terms be disclosed in a meaningful and
consistent way so that consumers may compare credit terms more readily and knowledgeably.
 
    
    The Fair Housing Act regulates many lending practices, including making it unlawful for
any lender to discriminate in its housing-related lending activities against any person
because of race, color, religion, national origin, sex, handicap or familial status.
 
    
    The CRA requires insured depository institutions, while operating safely and soundly,
to help meet the credit needs of their communities; directs the federal regulatory
agencies, in examining insured depository institutions, to assess a banks record of
helping meet the credit needs of its entire community, including low- and moderate-income
neighborhoods, consistent with safe and sound banking practices and further requires the
agencies to take a financial institutions record of meeting its community credit needs
into account when evaluating applications for, among other things, domestic branches,
mergers or acquisitions, or holding company formations. In its most recently released
public reports, from September 2008, the Bank received an outstanding rating.
 
    
    The Home Mortgage Disclosure Act includes a fair lending aspect that requires the
collection and disclosure of data about applicant and borrower characteristics as a way of
identifying possible discriminatory lending patterns and enforcing anti-discrimination
statutes.
 
    
    The Real Estate Settlement Procedures Act requires lenders to provide borrowers with
disclosures regarding the nature and cost of real estate settlements and prohibits certain
abusive practices, such as kickbacks.
 
    
    The National Flood Insurance Act requires homes in flood-prone areas with mortgages
from a federally regulated lender to have flood insurance.
 
    
    The Americans with Disabilities Act, in conjunction with similar California
legislation, requires employers with 15 or more employees and all businesses operating
commercial facilities or public accommodations to accommodate disabled employees and
customers.
 29




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Regulation of Subsidiaries
  30




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ITEM 1A. RISK FACTORS
  Our independent registered public accounting firm has expressed substantial doubt about our
ability to continue as a going concern.
 We, and our independent registered public accounting firm, have identified a material weakness
in our internal control over financial reporting.
  Our operations may require us to raise additional capital in the future, but that capital may
not be available or may not be on terms acceptable to us when it is needed.
 Ratio of Tangible ShareholdersDate
    
    Equity to Total Tangible AssetsBy December 31, 2009
    
    Not Less Than 7.0 PercentBy July 31, 2010
    
    Not Less Than 9.0 PercentFrom December 31, 2010 and Until the Order is Terminated
    
    Not Less Than 9.5 Percent
  31




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We are restricted from accepting brokered deposits and offering interest rates on deposits
that are substantially higher than the prevailing rates in our market
 The Bank is subject to additional regulatory oversight as a result of a formal regulatory
enforcement action issued by the Federal Reserve Bank of San Francisco and the California
Department of Financial Institutions. Notes to Consolidated Financial Statements, Note 15
- Regulatory Matters. Notes to Consolidated Financial Statements, Note 15 
Regulatory Matters.
  We may become subject to additional regulatory restrictions in the event that our regulatory
capital levels continue to decline.
 32




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We may elect or be compelled to seek additional capital in the future, but capital may not be
available when it is needed.
 33




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Liquidity risk could impair our ability to fund operations and jeopardize our financial
condition.
 Difficult economic and market conditions have adversely affected our industry.
 
    
    We potentially face increased regulation of our industry. Compliance with such
regulation may increase our costs and limit our ability to pursue business opportunities.
    
    The process we use to estimate losses inherent in our credit exposure requires
difficult, subjective and complex judgments, including forecasts of economic conditions and
how these economic conditions might impair the ability of our borrowers to repay their
loans. The level of uncertainty concerning economic conditions may adversely affect the
accuracy of our estimates, which may, in turn, impact the reliability of the process.
    
    We may be required to pay significantly higher FDIC premiums because market
developments have significantly depleted the insurance fund of the FDIC and reduced the
ratio of reserves to insured deposits.
    
    Our liquidity could be negatively impacted by an inability to access the capital
markets, unforeseen or extraordinary demands on cash, or regulatory restrictions, which
could, among other things, materially and adversely affect our business, results of
operations and financial condition and our ability to continue as a going concern.
 34




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If current levels of market disruption and volatility continue or worsen, there can be no
assurance that we will not experience an adverse effect, which may be material, on our ability to
access capital and on our business, financial condition and results of operations and prospects as
a going concern.
 U.S. and international financial markets and economic conditions could adversely affect our
liquidity, results of operations and financial condition.
 We have recently experienced an unexpected loss in our key management.
 We may be required to make additional provisions for credit losses and charge off additional
loans in the future, which could adversely affect our results of operations and capital levels.
 Our allowance for loan losses may not be adequate to cover actual losses.
 35




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Changes in economic conditions could materially hurt our business.
 
    
    problem assets and foreclosures may increase;
    
    demand for our products and services may decline;
    
    low cost or non-interest bearing deposits may decrease; and
    
    collateral for loans made by us, especially real estate, may decline in value.
 Our Southern California business focus and economic conditions in Southern California could
adversely affect our operations .
 Our concentration in commercial real estate loans located primarily in Southern California
could have adverse effects on credit quality.
 Our concentration in commercial and industrial loans could have adverse effects on credit
quality.
 Our concentrations of loans in certain industries could have adverse effects on credit
quality.
 If a significant number of borrowers, guarantors or related parties fail to perform as
required by the terms of their loans, we could sustain losses .
 36




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##### Table of Contents



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.
 We are exposed to risk of environmental liabilities with respect to properties to which we
take title.
 Our earnings are affected by changing interest rates .
 We must manage our funding resources to enable us to meet our ongoing operations costs and our
deposit and borrowing obligations as they come due.
 The short-term and long-term impact of the new Basel II capital standards and the forthcoming
new capital rules to be proposed for non-Basel II U.S. banks is uncertain.
 We are subject to government regulations that could limit or restrict our activities, which in
turn could adversely affect our operations .
 37




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##### Table of Contents



Competition may adversely affect our performance .
 The Bank is currently restricted from paying dividends to Hanmi Financial and Hanmi Financial
is restricted from paying dividends to stockholders and from making any payments on its trust
preferred securities. Item 7 
Managements Discussion and Analysis of Financial Condition and Results of Operations. Capital
Resources and Liquidity. Item 5. Market for
Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
 We continually encounter technological change, and we may have fewer resources than many of
our competitors to continue to invest in technological improvements.
 We rely on communications, information, operating and financial control systems technology
from third-party service providers, and we may suffer an interruption in those systems.
 Negative publicity could damage our reputation.
 38




---



##### Table of Contents



The price of our common stock may be volatile or may decline.
 
    
    actual or anticipated quarterly 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;
    
    speculation in the press or investment community;
    
    strategic actions by us or our competitors, such as acquisitions or restructurings;
    
    actions by institutional stockholders;
    
    fluctuations in the stock price and operating results of our competitors;
    
    general market conditions and, in particular, developments related to market conditions
for the financial services industry;
    
    proposed or adopted legislative or regulatory 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.
 Cautionary Note Regarding Forward-Looking Statements.
 Your share ownership may be diluted by the issuance of additional shares of our common stock
in the future.
  39




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##### Table of Contents



Future sales of common stock by existing stockholders may have an adverse impact on the market
price of our common stock.
 Holders of our junior subordinated debentures have rights that are senior to those of our
stockholders.
 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.
 We may face other risks.
 40




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##### Table of Contents



ITEM 1B. UNRESOLVED STAFF COMMENTS
  
 ITEM 2. PROPERTIES
   Owned/Office
    
    Address
    
    City/State
    
    LeasedCorporate Headquarters (1)
    
    3660 Wilshire Boulevard, Penthouse Suite A
    
    Los Angeles, CA
    
    LeasedBranches:Beverly Hills Branch
    
    9300 Wilshire Boulevard, Suite 101
    
    Beverly Hills, CA
    
    LeasedCerritos  Artesia Branch
    
    11754 East Artesia Boulevard
    
    Artesia, CA
    
    LeasedCerritos  South Branch
    
    11900 South Street, Suite 109
    
    Cerritos, CA
    
    LeasedDowntown  Los Angeles Branch
    
    950 South Los Angeles Street
    
    Los Angeles, CA
    
    LeasedFashion District Branch
    
    726 East 12th Street, Suite 211
    
    Los Angeles, CA
    
    LeasedFullerton  Beach Branch
    
    5245 Beach Boulevard
    
    Buena Park, CA
    
    LeasedGarden Grove  Brookhurst Branch
    
    9820 Garden Grove Boulevard
    
    Garden Grove, CA
    
    OwnedGarden Grove  Magnolia Branch
    
    9122 Garden Grove Boulevard
    
    Garden Grove, CA
    
    OwnedGardena Branch
    
    2001 West Redondo Beach Boulevard
    
    Gardena, CA
    
    LeasedIrvine Branch
    
    14474 Culver Drive, Suite D
    
    Irvine, CA
    
    LeasedKoreatown Galleria Branch
    
    3250 West Olympic Boulevard, Suite 200
    
    Los Angeles, CA
    
    LeasedKoreatown Plaza Branch
    
    928 South Western Avenue, Suite 260
    
    Los Angeles, CA
    
    LeasedNorthridge Branch
    
    10180 Reseda Boulevard
    
    Northridge, CA
    
    LeasedOlympic Branch (2)
    
    3737 West Olympic Boulevard
    
    Los Angeles, CA
    
    OwnedOlympic  Kingsley Branch
    
    3099 West Olympic Boulevard
    
    Los Angeles, CA
    
    OwnedRancho Cucamonga Branch
    
    9759 Baseline Road
    
    Rancho Cucamonga, CA
    
    LeasedRowland Heights Branch
    
    18720 East Colima Road
    
    Rowland Heights, CA
    
    LeasedSan Diego Branch
    
    4637 Convoy Street, Suite 101
    
    San Diego, CA
    
    LeasedSan Francisco Branch
    
    1469 Webster Street
    
    San Francisco, CA
    
    LeasedSilicon Valley Branch
    
    2765 El Camino Real
    
    Santa Clara, CA
    
    LeasedTorrance  Crenshaw Branch
    
    2370 Crenshaw Boulevard, Suite H
    
    Torrance, CA
    
    LeasedTorrance  Del Amo Mall Branch
    
    21838 Hawthorne Boulevard
    
    Torrance, CA
    
    LeasedVan Nuys Branch
    
    14427 Sherman Way
    
    Van Nuys, CA
    
    LeasedVermont Branch (3)
    
    933 South Vermont Avenue
    
    Los Angeles, CA
    
    OwnedWestern Branch
    
    120 South Western Avenue
    
    Los Angeles, CA
    
    LeasedWilshire  Hobart Branch
    
    3660 Wilshire Boulevard, Suite 103
    
    Los Angeles, CA
    
    LeasedDepartments:Commercial Loan Department (1)
    
    3660 Wilshire Boulevard, Suite 1050
    
    Los Angeles, CA
    
    LeasedConsumer Loan Center (1)
    
    3660 Wilshire Boulevard, Suite 424
    
    Los Angeles, CA
    
    LeasedInsurance & Wealth Management
Department (1)
    
    3660 Wilshire Boulevard, Suite 424
    
    Los Angeles, CA
    
    LeasedInternational Finance Department (1)
    
    933 South Vermont Avenue, 2nd Floor
    
    Los Angeles, CA
    
    LeasedSBA Loan Center (1)
    
    3660 Wilshire Boulevard, Suite 116
    
    Los Angeles, CA
    
    LeasedLPOs and Subsidiaries:Northwest Region LPO (1)
    
    33110 Pacific Hwy South, Suite 4
    
    Federal Way, WA
    
    LeasedVirginia LPO (1)
    
    7535 Little River Turnpike, Suite 200B
    
    Annandale, VA
    
    LeasedChun-Ha/All World (1)
    
    12912 Brookhurst Street, Suite 480
    
    Garden Grove, CA
    
    LeasedChun-Ha (1)
    
    3225 Wilshire Boulevard, Suite 1806
    
    Los Angeles, CA
    
    Leased
 
 (1)
    
    Deposits are not accepted at this facility.(2)
    
    Training Facility is also located at this facility.(3)
    
    Administrative offices are also located at this facility.  41




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##### Table of Contents



ITEM 3. LEGAL PROCEEDINGS
  
 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
  
 PART II
 
 ITEM 5. MARKET FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF
EQUITY SECURITIES
 Market Information
  High
    
    
    Low
    
    
    Cash Dividend2009:Fourth Quarter
    
    $
    1.86
    
    
    $
    1.10
    
    
    
    Third Quarter
    
    $
    1.92
    
    
    $
    1.22
    
    
    
    Second Quarter
    
    $
    2.65
    
    
    $
    1.21
    
    
    
    First Quarter
    
    $
    3.00
    
    
    $
    0.75
    
    
    
    2008:Fourth Quarter
    
    $
    5.19
    
    
    $
    1.65
    
    
    
    Third Quarter
    
    $
    6.77
    
    
    $
    4.65
    
    
    
    Second Quarter
    
    $
    7.79
    
    
    $
    5.20
    
    
    $0.03 Per ShareFirst Quarter
    
    $
    9.82
    
    
    $
    6.80
    
    
    $0.06 Per Share
 Holders
  Dividends
   42




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##### Table of Contents



Performance Graph
 ®
 
 December 31,Index
    
    Symbol
    
    2004
    
    
    2005
    
    
    2006
    
    
    2007
    
    
    2008
    
    
    2009Hanmi Financial
    
    HAFC
    
    $
    100.00
    
    
    $
    100.50
    
    
    $
    128.13
    
    
    $
    50.39
    
    
    $
    12.57
    
    
    $
    7.32Nasdaq Composite
    
    ^IXIC
    
    $
    100.00
    
    
    $
    101.37
    
    
    $
    111.02
    
    
    $
    121.91
    
    
    $
    72.49
    
    
    $
    104.30S&P 500 Financials
    
    S5FINL
    
    $
    100.00
    
    
    $
    106.30
    
    
    $
    126.41
    
    
    $
    103.47
    
    
    $
    47.36
    
    
    $
    55.27SNL Bank $1B-$5B
    
    
    
    $
    100.00
    
    
    $
    98.29
    
    
    $
    113.74
    
    
    $
    82.85
    
    
    $
    68.77
    
    
    $
    49.26
 Purchases of Equity Securities by the Issuer and Affiliated Purchasers
  43




---



##### Table of Contents



ITEM 6. SELECTED FINANCIAL DATA
 Item 7.
Managements Discussion and Analysis of Financial Condition and Results of Operations.
 As of and for the Year Ended December 31,2009
    
    
    2008
    
    
    2007
    
    
    2006
    
    
    2005(Dollars in Thousands, Except for Per Share Data)SUMMARY STATEMENTS OF OPERATIONS:Interest and Dividend Income
    
    $
    184,147
    
    
    $
    238,183
    
    
    $
    280,896
    
    
    $
    260,189
    
    
    $
    200,941Interest Expense
    
    
    82,918
    
    
    
    103,782
    
    
    
    129,110
    
    
    
    106,946
    
    
    
    62,850Net Interest Income Before Provision for Credit Losses
    
    
    101,229
    
    
    
    134,401
    
    
    
    151,786
    
    
    
    153,243
    
    
    
    138,091Provision for Credit Losses
    
    
    196,387
    
    
    
    75,676
    
    
    
    38,323
    
    
    
    7,173
    
    
    
    5,395Non-Interest Income
    
    
    32,110
    
    
    
    32,854
    
    
    
    40,006
    
    
    
    36,963
    
    
    
    31,450Non-Interest Expense
    
    
    90,354
    
    
    
    195,027
    
    
    
    189,929
    
    
    
    77,313
    
    
    
    70,201Income (Loss) Before Provision (Benefit) for Income Taxes
    
    
    (153,402
    )
    
    
    (103,448
    )
    
    
    (36,460
    )
    
    
    105,720
    
    
    
    93,945Provision (Benefit) for Income Taxes
    
    
    (31,125
    )
    
    
    (1,355
    )
    
    
    24,302
    
    
    
    40,370
    
    
    
    36,144NET INCOME (LOSS)
    
    $
    (122,277
    )
    
    $
    (102,093
    )
    
    $
    (60,762
    )
    
    $
    65,350
    
    
    $
    57,801SUMMARY BALANCE SHEETS:Cash and Cash Equivalents
    
    $
    154,110
    
    
    $
    215,947
    
    
    $
    122,398
    
    
    $
    138,501
    
    
    $
    163,477Total Investment Securities
    
    
    133,289
    
    
    
    197,117
    
    
    
    350,457
    
    
    
    391,579
    
    
    
    443,912Net Loans (1)
    
    
    2,674,064
    
    
    
    3,291,125
    
    
    
    3,241,097
    
    
    
    2,837,390
    
    
    
    2,469,080Total Assets
    
    
    3,162,706
    
    
    
    3,875,816
    
    
    
    3,983,657
    
    
    
    3,725,243
    
    
    
    3,414,252Total Deposits
    
    
    2,749,327
    
    
    
    3,070,080
    
    
    
    3,001,699
    
    
    
    2,944,715
    
    
    
    2,826,114Total Liabilities
    
    
    3,012,962
    
    
    
    3,611,901
    
    
    
    3,613,101
    
    
    
    3,238,873
    
    
    
    2,987,923Total Stockholders Equity
    
    
    149,744
    
    
    
    263,915
    
    
    
    370,556
    
    
    
    486,370
    
    
    
    426,329Tangible Equity
    
    
    146,362
    
    
    
    258,965
    
    
    
    256,548
    
    
    
    272,412
    
    
    
    208,580Average Net Loans (1)
    
    
    3,044,395
    
    
    
    3,276,142
    
    
    
    3,049,775
    
    
    
    2,721,229
    
    
    
    2,359,439Average Investment Securities
    
    
    188,325
    
    
    
    271,802
    
    
    
    368,144
    
    
    
    414,672
    
    
    
    418,750Average Interest-Earning Assets
    
    
    3,611,009
    
    
    
    3,653,720
    
    
    
    3,494,758
    
    
    
    3,214,761
    
    
    
    2,871,564Average Total Assets
    
    
    3,717,179
    
    
    
    3,866,856
    
    
    
    3,882,891
    
    
    
    3,602,181
    
    
    
    3,249,190Average Deposits
    
    
    3,109,322
    
    
    
    2,913,171
    
    
    
    2,989,806
    
    
    
    2,881,448
    
    
    
    2,632,254Average Borrowings
    
    
    341,514
    
    
    
    591,930
    
    
    
    355,819
    
    
    
    221,347
    
    
    
    165,482Average Interest-Bearing Liabilities
    
    
    2,909,014
    
    
    
    2,874,470
    
    
    
    2,643,296
    
    
    
    2,367,389
    
    
    
    2,046,227Average Stockholders Equity
    
    
    225,708
    
    
    
    323,462
    
    
    
    492,637
    
    
    
    458,227
    
    
    
    417,813Average Tangible Equity
    
    
    221,537
    
    
    
    264,490
    
    
    
    275,036
    
    
    
    242,362
    
    
    
    198,527PER SHARE DATA:Earnings (Loss) Per Share  Basic
    
    $
    (2.57
    )
    
    $
    (2.23
    )
    
    $
    (1.27
    )
    
    $
    1.34
    
    
    $
    1.18Earnings (Loss) Per Share  Diluted
    
    $
    (2.57
    )
    
    $
    (2.23
    )
    
    $
    (1.27
    )
    
    $
    1.32
    
    
    $
    1.16Book Value Per Share (2)
    
    $
    2.93
    
    
    $
    5.75
    
    
    $
    8.08
    
    
    $
    9.91
    
    
    $
    8.76Tangible Book Value Per Share (3)
    
    $
    2.86
    
    
    $
    5.64
    
    
    $
    5.59
    
    
    $
    5.55
    
    
    $
    4.29Cash Dividends Per Share
    
    
    
    
    
    $
    0.09
    
    
    $
    0.24
    
    
    $
    0.24
    
    
    $
    0.20Common Shares Outstanding (4)
    
    
    51,182,390
    
    
    
    45,905,549
    
    
    
    45,860,941
    
    
    
    49,076,613
    
    
    
    48,658,798
 
 (1)
    
    Loans receivable, net of allowance for loan losses and deferred loan fees.(2)
    
    Total stockholders equity divided by common shares outstanding.(3)
    
    Tangible equity divided by common shares outstanding.(4)
    
    On January 20, 2005, our Board of Director declared a two-for-one stock split and
new shares were distributed on February 15, 2005. 44




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##### Table of Contents



As of and for the Year Ended December 31,2009
    
    
    2008
    
    
    2007
    
    
    2006
    
    
    2005SELECTED PERFORMANCE RATIOS:Return on Average Assets (4)
    
    
    (3.29
    %)
    
    
    (2.64
    %)
    
    
    (1.56
    %)
    
    
    1.81
    %
    
    
    1.78
    %Return on Average Stockholders Equity (5)
    
    
    (54.17
    %)
    
    
    (31.56
    %)
    
    
    (12.33
    %)
    
    
    14.26
    %
    
    
    13.83
    %Return on Average Tangible Equity (6)
    
    
    (55.19
    %)
    
    
    (38.60
    %)
    
    
    (22.09
    %)
    
    
    26.96
    %
    
    
    29.11
    %Net Interest Spread (7)
    
    
    2.28
    %
    
    
    2.95
    %
    
    
    3.20
    %
    
    
    3.65
    %
    
    
    4.02
    %Net Interest Margin (8)
    
    
    2.84
    %
    
    
    3.72
    %
    
    
    4.39
    %
    
    
    4.83
    %
    
    
    4.89
    %Efficiency Ratio (9)
    
    
    67.76
    %
    
    
    116.60
    %
    
    
    99.03
    %
    
    
    40.65
    %
    
    
    41.41
    %Dividend Payout Ratio (10)
    
    
    
    
    
    
    (4.05
    %)
    
    
    (18.11
    %)
    
    
    18.02
    %
    
    
    16.84
    %Average Stockholders Equity to Average Total Assets
    
    
    6.07
    %
    
    
    8.36
    %
    
    
    12.69
    %
    
    
    12.72
    %
    
    
    12.86
    %SELECTED CAPITAL RATIOS:Total Capital to Total Risk-Weighted Assets:Hanmi Financial
    
    
    9.12
    %
    
    
    10.79
    %
    
    
    10.65
    %
    
    
    12.55
    %
    
    
    12.04
    %Hanmi Bank
    
    
    9.07
    %
    
    
    10.70
    %
    
    
    10.59
    %
    
    
    12.28
    %
    
    
    11.98
    %Tier 1 Capital to Total Risk-Weighted Assets:Hanmi Financial
    
    
    6.76
    %
    
    
    9.52
    %
    
    
    9.40
    %
    
    
    11.58
    %
    
    
    11.03
    %Hanmi Bank
    
    
    7.77
    %
    
    
    9.44
    %
    
    
    9.34
    %
    
    
    11.31
    %
    
    
    10.96
    %Tier 1 Capital to Average Total Assets:Hanmi Financial
    
    
    5.82
    %
    
    
    8.93
    %
    
    
    8.52
    %
    
    
    10.08
    %
    
    
    9.11
    %Hanmi Bank
    
    
    6.69
    %
    
    
    8.85
    %
    
    
    8.47
    %
    
    
    9.85
    %
    
    
    9.06
    %SELECTED ASSET QUALITY RATIOS:Non-Performing Loans to Total Gross Loans(11)
    
    
    7.77
    %
    
    
    3.62
    %
    
    
    1.66
    %
    
    
    0.50
    %
    
    
    0.41
    %Non-Performing Assets to Total Assets (12)
    
    
    7.76
    %
    
    
    3.17
    %
    
    
    1.37
    %
    
    
    0.38
    %
    
    
    0.30
    %Net Loan Charge-Offs to Average Total Gross Loans
    
    
    3.88
    %
    
    
    1.38
    %
    
    
    0.73
    %
    
    
    0.17
    %
    
    
    0.12
    %Allowance for Loan Losses to Total Gross Loans
    
    
    5.14
    %
    
    
    2.11
    %
    
    
    1.33
    %
    
    
    0.96
    %
    
    
    1.00
    %Allowance for Loan Losses to Non-Performing Loans
    
    
    66.19
    %
    
    
    58.23
    %
    
    
    80.05
    %
    
    
    193.86
    %
    
    
    246.40
    %
 
 (4)
    
    Net income (loss) divided by average total assets.(5)
    
    Net income (loss) divided by average stockholders equity.(6)
    
    Net income (loss) divided by average tangible equity.(7)
    
    Average yield earned on interest-earning assets less average rate paid on
interest-bearing liabilities. Computed on a tax-equivalent basis using an effective marginal rate of 35 percent(8)
    
    Net interest income before provision for credit losses divided by average
interest-earning assets. Computed on a tax-equivalent basis using an effective marginal rate of 35 percent(9)
    
    Total non-interest expense divided by the sum of net interest income before
provision for credit losses and total non-interest income.(10)
    
    Dividends declared per share divided by basic earnings (loss) per share.(11)
    
    Non-performing loans consist of non-accrual loan and loans past due 90 days or more
still accruing interest.(12)
    
    Non-performing assets consist of non-performing loans and other real estate owned. Non-GAAP Financial Measures
 Return on Average Tangible Equity
  45




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##### Table of Contents



Year Ended December 31,2009
    
    
    2008
    
    
    2007
    
    
    2006
    
    
    2005(Dollars in Thousands)Average Stockholders Equity
    
    $
    225,708
    
    
    $
    323,462
    
    
    $
    492,637
    
    
    $
    458,227
    
    
    $
    417,813Less Average Goodwill and Average Other Intangible Assets
    
    
    (4,171
    )
    
    
    (58,972
    )
    
    
    (217,601
    )
    
    
    (215,865
    )
    
    
    (219,286
    )Average Tangible Equity
    
    $
    221,537
    
    
    $
    264,490
    
    
    $
    275,036
    
    
    $
    242,362
    
    
    $
    198,527Return on Average Stockholders Equity
    
    
    (54.17
    %)
    
    
    (31.56
    %)
    
    
    (12.33
    %)
    
    
    14.26
    %
    
    
    13.83
    %Effect of Average Goodwill and Average Other Intangible Assets
    
    
    (1.02
    %)
    
    
    (7.04
    %)
    
    
    (9.76
    %)
    
    
    12.70
    %
    
    
    15.28
    %Return on Average Tangible Equity
    
    
    (55.19
    %)
    
    
    (38.60
    %)
    
    
    (22.09
    %)
    
    
    26.96
    %
    
    
    29.11
    %
 Tangible Book Value Per Share
   December 31,2009
    
    
    2008
    
    
    2007
    
    
    2006
    
    
    2005(Dollars in Thousands, Except Per Share Amounts)Total Stockholders Equity
    
    $
    149,744
    
    
    $
    263,915
    
    
    $
    370,556
    
    
    $
    486,370
    
    
    $
    426,329Less Goodwill and Other Intangible Assets
    
    
    (3,382
    )
    
    
    (4,950
    )
    
    
    (114,008
    )
    
    
    (213,958
    )
    
    
    (217,749
    )Tangible Equity
    
    $
    146,362
    
    
    $
    258,965
    
    
    $
    256,548
    
    
    $
    272,412
    
    
    $
    208,580Book Value Per Share
    
    $
    2.93
    
    
    $
    5.75
    
    
    $
    8.08
    
    
    $
    9.91
    
    
    $
    8.76Effect of Goodwill and Other Intangible Assets
    
    
    (0.07
    )
    
    
    (0.11
    )
    
    
    (2.49
    )
    
    
    (4.36
    )
    
    
    (4.47
    )Tangible Book Value Per Share
    
    $
    2.86
    
    
    $
    5.64
    
    
    $
    5.59
    
    
    $
    5.55
    
    
    $
    4.29
 46




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##### Table of Contents



ITEM 7. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 Item 1A. Risk Factors.
 CRITICAL ACCOUNTING POLICIES
 Notes to Consolidated Financial Statements, Note 2  Summary of Significant
Accounting Policies.
 Allowance for Loan Losses
 Financial Condition  Allowance for Loan Losses and Allowance for
Off-Balance Sheet Items, Results of Operations  Provision for Credit Losses Notes to
Consolidated Financial Statements, Note 2  Summary of Significant Accounting Policies
 Loan Sales
 Notes to Consolidated
Financial Statements, Note2  Summary of Significant Accounting Policies Note 5  Loans
 47




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##### Table of Contents



Investment Securities
 Notes to Consolidated Financial Statements, Note 2  Summary of Significant Accounting Policies Investment,
   Notes to Consolidated Financial Statements,
Note 4  Securities
 Income Taxes
  48




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##### Table of Contents



Notes to Consolidated Financial Statements, Note 2 
Summary of Significant Accounting Policies Note 12  Income Taxes
 49




---



##### Table of Contents



EXECUTIVE OVERVIEW
  Financial Condition 
Allowance for Loan Losses and Allowance for Off-Balance Sheet Items
   Outlook for 2010
   50




---



##### Table of Contents



RESULTS OF OPERATIONS
 Net Interest Income, Net Interest Spread and Net Interest Margin
   51




---



##### Table of Contents



Year Ended December 31,2009
    
    
    2008
    
    
    2007Interest
    
    
    Average
    
    
    
    
    
    
    Interest
    
    
    Average
    
    
    
    
    
    
    Interest
    
    
    AverageAverage
    
    
    Income/
    
    
    Yield/
    
    
    Average
    
    
    Income/
    
    
    Yield/
    
    
    Average
    
    
    Income/
    
    
    Yield/Balance
    
    
    Expense
    
    
    Rate
    
    
    Balance
    
    
    Expense
    
    
    Rate
    
    
    Balance
    
    
    Expense
    
    
    Rate(Dollars in Thousands)ASSETSInterest-Earning Assets:Gross Loans, Net (1)
    
    $
    3,157,133
    
    
    $
    173,318
    
    
    
    5.49
    %
    
    $
    3,332,133
    
    
    $
    223,942
    
    
    
    6.72
    %
    
    $
    3,080,544
    
    
    $
    261,992
    
    
    
    8.50
    %Municipal Securities (2)
    
    
    54,448
    
    
    
    3,543
    
    
    
    6.51
    %
    
    
    63,918
    
    
    
    4,180
    
    
    
    6.54
    %
    
    
    71,937
    
    
    
    4,700
    
    
    
    6.53
    %Obligations of Other U.S.
Government Agencies
    
    
    24,417
    
    
    
    1,108
    
    
    
    4.54
    %
    
    
    65,440
    
    
    
    2,813
    
    
    
    4.30
    %
    
    
    116,701
    
    
    
    4,963
    
    
    
    4.25
    %Other Debt Securities
    
    
    109,460
    
    
    
    4,568
    
    
    
    4.17
    %
    
    
    142,444
    
    
    
    6,574
    
    
    
    4.62
    %
    
    
    179,506
    
    
    
    8,436
    
    
    
    4.70
    %Equity Securities
    
    
    41,399
    
    
    
    656
    
    
    
    1.58
    %
    
    
    38,516
    
    
    
    1,918
    
    
    
    4.98
    %
    
    
    26,228
    
    
    
    1,413
    
    
    
    5.39
    %Federal Funds Sold
    
    
    84,363
    
    
    
    326
    
    
    
    0.39
    %
    
    
    8,934
    
    
    
    166
    
    
    
    1.86
    %
    
    
    19,746
    
    
    
    1,032
    
    
    
    5.23
    %Term Federal Funds Sold
    
    
    95,822
    
    
    
    1,718
    
    
    
    1.79
    %
    
    
    1,913
    
    
    
    43
    
    
    
    2.25
    %
    
    
    96
    
    
    
    5
    
    
    
    5.21
    %Interest-Earning Deposits
    
    
    43,967
    
    
    
    151
    
    
    
    0.34
    %
    
    
    422
    
    
    
    10
    
    
    
    2.37
    %
    
    
    
    
    
    
    
    
    
    
    Total Interest-Earning Assets
    
    
    3,611,009
    
    
    
    185,388
    
    
    
    5.13
    %
    
    
    3,653,720
    
    
    
    239,646
    
    
    
    6.56
    %
    
    
    3,494,758
    
    
    
    282,541
    
    
    
    8.08
    %Noninterest-Earning Assets:Cash and Cash Equivalents
    
    
    71,448
    
    
    
    
    
    
    
    
    
    
    
    88,679
    
    
    
    
    
    
    
    
    
    
    
    92,148Allowance for Loan Losses
    
    
    (112,738
    )
    
    
    
    
    
    
    
    
    
    
    (55,991
    )
    
    
    
    
    
    
    
    
    
    
    (30,769
    )Other Assets
    
    
    147,460
    
    
    
    
    
    
    
    
    
    
    
    180,448
    
    
    
    
    
    
    
    
    
    
    
    326,754Total Noninterest-Earning
Assets
    
    
    106,170
    
    
    
    
    
    
    
    
    
    
    
    213,136
    
    
    
    
    
    
    
    
    
    
    
    388,133TOTAL ASSETS
    
    $
    3,717,179
    
    
    
    
    
    
    
    
    
    
    $
    3,866,856
    
    
    
    
    
    
    
    
    
    
    $
    3,882,891LIABILITIES AND
STOCKHOLDERS EQUITYInterest-Bearing Liabilities:Deposits:Savings
    
    $
    91,089
    
    
    
    2,328
    
    
    
    2.56
    %
    
    $
    89,866
    
    
    
    2,093
    
    
    
    2.33
    %
    
    $
    97,173
    
    
    
    2,004
    
    
    
    2.06
    %Money Market Checking
and NOW Accounts
    
    
    507,619
    
    
    
    9,786
    
    
    
    1.93
    %
    
    
    618,779
    
    
    
    19,909
    
    
    
    3.22
    %
    
    
    452,825
    
    
    
    15,446
    
    
    
    3.41
    %Time Deposits of $100,000
or More
    
    
    1,051,994
    
    
    
    34,807
    
    
    
    3.31
    %
    
    
    1,045,968
    
    
    
    43,598
    
    
    
    4.17
    %
    
    
    1,430,603
    
    
    
    75,516
    
    
    
    5.28
    %Other Time Deposits
    
    
    916,798
    
    
    
    29,325
    
    
    
    3.20
    %
    
    
    527,927
    
    
    
    18,753
    
    
    
    3.55
    %
    
    
    306,876
    
    
    
    15,551
    
    
    
    5.07
    %Federal Home Loan Bank
Advances
    
    
    257,529
    
    
    
    3,399
    
    
    
    1.32
    %
    
    
    498,875
    
    
    
    14,027
    
    
    
    2.81
    %
    
    
    237,733
    
    
    
    12,156
    
    
    
    5.11
    %Other Borrowings
    
    
    1,579
    
    
    
    2
    
    
    
    0.13
    %
    
    
    10,649
    
    
    
    346
    
    
    
    3.25
    %
    
    
    35,680
    
    
    
    1,793
    
    
    
    5.03
    %Junior Subordinated Debentures
    
    
    82,406
    
    
    
    3,271
    
    
    
    3.97
    %
    
    
    82,406
    
    
    
    5,056
    
    
    
    6.14
    %
    
    
    82,406
    
    
    
    6,644
    
    
    
    8.06
    %Total Interest-Bearing
Liabilities
    
    
    2,909,014
    
    
    
    82,918
    
    
    
    2.85
    %
    
    
    2,874,470
    
    
    
    103,782
    
    
    
    3.61
    %
    
    
    2,643,296
    
    
    
    129,110
    
    
    
    4.88
    %Noninterest-Bearing Liabilities:Demand Deposits
    
    
    541,822
    
    
    
    
    
    
    
    
    
    
    
    630,631
    
    
    
    
    
    
    
    
    
    
    
    702,329Other Liabilities
    
    
    40,635
    
    
    
    
    
    
    
    
    
    
    
    38,293
    
    
    
    
    
    
    
    
    
    
    
    44,629Total Noninterest-Bearing
Liabilities
    
    
    582,457
    
    
    
    
    
    
    
    
    
    
    
    668,924
    
    
    
    
    
    
    
    
    
    
    
    746,958Total Liabilities
    
    
    3,491,471
    
    
    
    
    
    
    
    
    
    
    
    3,543,394
    
    
    
    
    
    
    
    
    
    
    
    3,390,254Stockholders Equity
    
    
    225,708
    
    
    
    
    
    
    
    
    
    
    
    323,462
    
    
    
    
    
    
    
    
    
    
    
    492,637TOTAL LIABILITIES AND
STOCKHOLDERS EQUITY
    
    $
    3,717,179
    
    
    
    
    
    
    
    
    
    
    $
    3,866,856
    
    
    
    
    
    
    
    
    
    
    $
    3,882,891Net Interest Income
    
    
    
    
    
    $
    102,470
    
    
    
    
    
    
    
    
    
    
    $
    135,864
    
    
    
    
    
    
    
    
    
    
    $
    153,431Net Interest Spread(3)
    
    
    
    
    
    
    
    
    
    
    2.28
    %
    
    
    
    
    
    
    
    
    
    
    2.95
    %
    
    
    
    
    
    
    
    
    
    
    3.20
    %Net Interest Margin(4)
    
    
    
    
    
    
    
    
    
    
    2.84
    %
    
    
    
    
    
    
    
    
    
    
    3.72
    %
    
    
    
    
    
    
    
    
    
    
    4.39
    %
 
 (1)
    
    Average balances for loans include non-accrual loans and net of deferred fees and
related direct costs. Loan fees have been included in the calculation of interest income. Loan
fees were $2.3 million, $2.4 million and $2.7 million for the years ended December 31, 2009,
2008 and 2007, respectively.(2)
    
    Computed on a tax-equivalent basis using an effective marginal rate of 35 percent.(3)
    
    Represents the average yield earned on interest-earning assets less the average rate
paid on interest-bearing liabilities.(4)
    
    Represents net interest income as a percentage of average interest-earning assets. 52




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##### Table of Contents



Year Ended December 31,2009 vs. 2008
    
    
    2008 vs. 2007Increase (Decrease)
    
    
    Increase (Decrease)Due to Change in
    
    
    Due to Change inVolume
    
    
    Rate
    
    
    Total
    
    
    Volume
    
    
    Rate
    
    
    Total(In Thousands)Interest and Dividend Income:Gross Loans, Net
    
    $
    (11,281
    )
    
    $
    (39,343
    )
    
    $
    (50,624
    )
    
    $
    20,139
    
    
    $
    (58,189
    )
    
    $
    (38,050
    )Municipal Securities
    
    
    (616
    )
    
    
    (21
    )
    
    
    (637
    )
    
    
    (524
    )
    
    
    4
    
    
    
    (520
    )Obligations of Other U.S. Government Agencies
    
    
    (1,854
    )
    
    
    149
    
    
    
    (1,705
    )
    
    
    (2,202
    )
    
    
    52
    
    
    
    (2,150
    )Other Debt Securities
    
    
    (1,419
    )
    
    
    (587
    )
    
    
    (2,006
    )
    
    
    (1,713
    )
    
    
    (149
    )
    
    
    (1,862
    )Equity Securities
    
    
    134
    
    
    
    (1396
    )
    
    
    (1,262
    )
    
    
    619
    
    
    
    (114
    )
    
    
    505Federal Funds Sold
    
    
    386
    
    
    
    (226
    )
    
    
    160
    
    
    
    (398
    )
    
    
    (468
    )
    
    
    (866
    )Term Federal Funds Sold
    
    
    1,686
    
    
    
    (11
    )
    
    
    1,675
    
    
    
    43
    
    
    
    (5
    )
    
    
    38Interest-Earning Deposits
    
    
    158
    
    
    
    (17
    )
    
    
    141
    
    
    
    10
    
    
    
    
    
    
    
    10Total Interest and Dividend Income
    
    
    (12,806
    )
    
    
    (41,452
    )
    
    
    (54,258
    )
    
    
    15,974
    
    
    
    (58,869
    )
    
    
    (42,895
    )Interest Expense:Savings
    
    
    28
    
    
    
    207
    
    
    
    235
    
    
    
    (158
    )
    
    
    247
    
    
    
    89Money Market Checking and NOW Accounts
    
    
    (3,133
    )
    
    
    (6,990
    )
    
    
    (10,123
    )
    
    
    5,382
    
    
    
    (919
    )
    
    
    4,463Time Deposits of $100,000 or More
    
    
    250
    
    
    
    (9,041
    )
    
    
    (8,791
    )
    
    
    (17,907
    )
    
    
    (14,011
    )
    
    
    (31,918
    )Other Time Deposits
    
    
    12,603
    
    
    
    (2,031
    )
    
    
    10,572
    
    
    
    8,835
    
    
    
    (5,633
    )
    
    
    3,202Federal Home Loan Bank Advances and Other
Borrowings
    
    
    (5,231
    )
    
    
    (5,741
    )
    
    
    (10,972
    )
    
    
    8,497
    
    
    
    (8,073
    )
    
    
    424Junior Subordinated Debentures
    
    
    
    
    
    
    (1,785
    )
    
    
    (1,785
    )
    
    
    
    
    
    
    (1,588
    )
    
    
    (1,588
    )Total Interest Expense
    
    
    4,517
    
    
    
    (25,381
    )
    
    
    (20,864
    )
    
    
    4,649
    
    
    
    (29,977
    )
    
    
    (25,328
    )Change in Net Interest Income
    
    $
    (17,323
    )
    
    $
    (16,071
    )
    
    $
    (33,394
    )
    
    $
    11,325
    
    
    $
    (28,892
    )
    
    $
    (17,567
    )
   53




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##### Table of Contents



Provision for Credit Losses
 Non-Performing Assets Allowance for Loan
Losses and Allowance for Off-Balance Sheet Items
 Non-Performing
Assets Allowance for Loan Losses and Allowance for Off-Balance Sheet Items
 54




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##### Table of Contents



Non-Interest Income
  Year Ended December 31,2009
    
    
    2008
    
    
    2007(In Thousands)Service Charges on Deposit Accounts
    
    $
    17,054
    
    
    $
    18,463
    
    
    $
    18,061Insurance Commissions
    
    
    4,492
    
    
    
    5,067
    
    
    
    4,954Remittance Fees
    
    
    2,109
    
    
    
    2,194
    
    
    
    2,049Trade Finance Fees
    
    
    1,956
    
    
    
    3,088
    
    
    
    4,493Other Service Charges and Fees
    
    
    1,810
    
    
    
    2,365
    
    
    
    2,527Net Gain on Sales of Loans
    
    
    1,220
    
    
    
    765
    
    
    
    5,452Bank-Owned Life Insurance Income
    
    
    932
    
    
    
    952
    
    
    
    933Net Gain on Sales of Investment Securities
    
    
    1,833
    
    
    
    77
    
    
    
    Other-Than-Temporary Impairment Loss on Securities
    
    
    
    
    
    
    (2,410
    )
    
    
    (1,074
    )Other Operating Income
    
    
    704
    
    
    
    2,293
    
    
    
    2,611Total Non-Interest Income
    
    $
    32,110
    
    
    $
    32,854
    
    
    $
    40,006
        55




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##### Table of Contents



Non-Interest Expense
  Year Ended December 31,2009
    
    
    2008
    
    
    2007(In Thousands)Salaries and Employee Benefits
    
    $
    33,101
    
    
    $
    42,209
    
    
    $
    47,036Occupancy and Equipment
    
    
    11,239
    
    
    
    11,158
    
    
    
    10,494Deposit Insurance Premiums and Regulatory Assessments
    
    
    10,418
    
    
    
    3,713
    
    
    
    587Data Processing
    
    
    6,297
    
    
    
    5,799
    
    
    
    6,390Other Real Estate Owned Expense
    
    
    5,890
    
    
    
    390
    
    
    
    8Professional Fees
    
    
    4,099
    
    
    
    3,539
    
    
    
    2,468Advertising and Promotion
    
    
    2,402
    
    
    
    3,518
    
    
    
    3,630Supplies and Communications
    
    
    2,352
    
    
    
    2,518
    
    
    
    2,592Loan-Related Expense
    
    
    1,947
    
    
    
    790
    
    
    
    674Amortization of Other Intangible Assets
    
    
    1,568
    
    
    
    1,958
    
    
    
    2,324Other Operating Expenses
    
    
    11,041
    
    
    
    12,042
    
    
    
    10,835Impairment Loss on Goodwill
    
    
    
    
    
    
    107,393
    
    
    
    102,891Total Non-Interest Expense
    
    $
    90,354
    
    
    $
    195,027
    
    
    $
    189,929
   56




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##### Table of Contents



Income Taxes
   Notes to Consolidated Financial Statements, Note 12  Income Taxes,
  57




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##### Table of Contents



FINANCIAL CONDITION
 Investment Portfolio
     Investment Portfolio as of December 31,2009
    
    
    2008
    
    
    2007Amortized
    
    
    Fair
    
    
    Amortized
    
    
    Fair
    
    
    Amortized
    
    
    FairCost
    
    
    Value
    
    
    Cost
    
    
    Value
    
    
    Cost
    
    
    Value(In Thousands)Securities Held to Maturity:Municipal Bonds
    
    $
    696
    
    
    $
    696
    
    
    $
    695
    
    
    $
    695
    
    
    $
    694
    
    
    $
    694Mortgage-Backed Securities (1)
    
    
    173
    
    
    
    175
    
    
    
    215
    
    
    
    215
    
    
    
    246
    
    
    
    247Total Securities Held to Maturity
    
    $
    869
    
    
    $
    871
    
    
    $
    910
    
    
    $
    910
    
    
    $
    940
    
    
    $
    941Securities Available for Sale:Mortgage-Backed Securities (1)
    
    $
    65,218
    
    
    $
    66,332
    
    
    $
    77,515
    
    
    $
    78,860
    
    
    $
    99,332
    
    
    $
    99,198U.S. Government Agency Securities
    
    
    33,325
    
    
    
    32,763
    
    
    
    17,580
    
    
    
    17,700
    
    
    
    104,893
    
    
    
    105,089Collateralized Mortgage Obligations (2)
    
    
    12,520
    
    
    
    12,789
    
    
    
    36,204
    
    
    
    36,162
    
    
    
    51,881
    
    
    
    51,418Asset-Backed Securities
    
    
    8,127
    
    
    
    8,188
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Municipal Bonds
    
    
    7,369
    
    
    
    7,359
    
    
    
    58,987
    
    
    
    58,313
    
    
    
    69,907
    
    
    
    71,751Other Securities
    
    
    3,925
    
    
    
    4,195
    
    
    
    4,684
    
    
    
    4,958
    
    
    
    3,925
    
    
    
    3,835Equity Securities
    
    
    511
    
    
    
    794
    
    
    
    511
    
    
    
    804
    
    
    
    
    
    
    
    Corporate Bonds (3)
    
    
    
    
    
    
    
    
    
    
    355
    
    
    
    169
    
    
    
    18,295
    
    
    
    18,226Total Securities Available for Sale
    
    $
    130,995
    
    
    $
    132,420
    
    
    $
    195,836
    
    
    $
    196,966
    
    
    $
    348,233
    
    
    $
    349,517
 
 (1)
    
    Collateralized by residential mortgages and guaranteed by U.S. government sponsored
entities.(2)
    
    Collateralized by residential mortgages and guaranteed by U.S. government sponsored
entities, except for two private-label securities held as of December 31, 2008 with an
unrealized loss totaling $42,000. The two private-label securities were sold during the year
ended December 31, 2009.(3)
    
    Balances presented for amortized cost, representing one corporate bond, were net of
an OTTI charge of $2.4 million, which was related to a credit loss, as of December 31, 2008.
Therefore, the adoption of a new accounting standard did not require a reclassification for
the non-credit portion of previously recognized OTTI from the opening balance of retained
earnings to other comprehensive income as of March 31, 2009. The corporate bond was sold
during the year ended December 31, 2009. 58




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##### Table of Contents



The following table summarizes the contractual maturity schedule for investment securities,
at amortized cost, and their weighted-average yield as of December 31, 2009:
 After One Year But
    
    
    After Five Years ButWithin One Year
    
    
    Within Five Years
    
    
    Within Ten Years
    
    
    After Ten YearsAmount
    
    
    Yield
    
    
    Amount
    
    
    Yield
    
    
    Amount
    
    
    Yield
    
    
    Amount
    
    
    Yield(Dollars in Thousands)Mortgage-Backed
Securities
    
    $
    2,287
    
    
    
    4.29
    %
    
    $
    6,506
    
    
    
    4.24
    %
    
    $
    5,355
    
    
    
    4.45
    %
    
    $
    51,243
    
    
    
    4.35
    %U.S. Government Agency
Securities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    9,999
    
    
    
    4.10
    %
    
    
    23,326
    
    
    
    5.57
    %Collateralized Mortgage
Obligations
    
    
    3,386
    
    
    
    4.00
    %
    
    
    3,811
    
    
    
    4.09
    %
    
    
    5,323
    
    
    
    3.95
    %
    
    
    
    
    
    
    Asset-Backed Securities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,440
    
    
    
    4.43
    %
    
    
    2,687
    
    
    
    4.51
    %Municipal Bonds (1)
    
    
    
    
    
    
    
    
    
    
    695
    
    
    
    7.06
    %
    
    
    2,869
    
    
    
    6.13
    %
    
    
    4,501
    
    
    
    6.65
    %Other Securities
    
    
    3,925
    
    
    
    3.37
    %
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Equity Securities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    511
    
    
    
    Corporate Bonds
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    9,598
    
    
    
    3.81
    %
    
    $
    11,012
    
    
    
    4.37
    %
    
    $
    28,986
    
    
    
    4.40
    %
    
    $
    82,268
    
    
    
    4.80
    %
 
 (1)
    
    The yield on municipal bonds has been computed on a tax-equivalent basis, using an
effective marginal rate of 35 percent.  Holding PeriodLess than 12 Months
    
    
    12 Months or More
    
    
    TotalGross
    
    
    Estimated
    
    
    Number
    
    
    Gross
    
    
    Estimated
    
    
    Number
    
    
    Gross
    
    
    Estimated
    
    
    NumberInvestment Securities
    
    Unrealized
    
    
    Fair
    
    
    of
    
    
    Unrealized
    
    
    Fair
    
    
    of
    
    
    Unrealized
    
    
    Fair
    
    
    ofAvailable for Sale
    
    Losses
    
    
    Value
    
    
    Securities
    
    
    Losses
    
    
    Value
    
    
    Securities
    
    
    Losses
    
    
    Value
    
    
    Securities(In Thousands)December 31, 2009:Mortgage-Backed Securities
    
    $
    144
    
    
    $
    14,584
    
    
    
    3
    
    
    $
    
    
    
    $
    
    
    
    
    
    
    
    $
    144
    
    
    $
    14,584
    
    
    
    3Municipal Bonds
    
    
    12
    
    
    
    303
    
    
    
    1
    
    
    
    80
    
    
    
    793
    
    
    
    1
    
    
    
    92
    
    
    
    1,096
    
    
    
    2U.S. Government Agency
Securities
    
    
    562
    
    
    
    32,764
    
    
    
    6
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    562
    
    
    
    32,764
    
    
    
    6Other Securities
    
    
    24
    
    
    
    1,976
    
    
    
    2
    
    
    
    39
    
    
    
    961
    
    
    
    1
    
    
    
    63
    
    
    
    2,937
    
    
    
    3$
    742
    
    
    $
    49,627
    
    
    
    12
    
    
    $
    119
    
    
    $
    1,754
    
    
    
    2
    
    
    $
    861
    
    
    $
    51,381
    
    
    
    14December 31, 2008:Mortgage-Backed Securities
    
    $
    158
    
    
    $
    10,631
    
    
    
    42
    
    
    $
    33
    
    
    $
    5,277
    
    
    
    4
    
    
    $
    191
    
    
    $
    15,908
    
    
    
    46Municipal Bonds
    
    
    968
    
    
    
    35,614
    
    
    
    66
    
    
    
    119
    
    
    
    1,749
    
    
    
    4
    
    
    
    1,087
    
    
    
    37,363
    
    
    
    70Collateralized Mortgage
Obligations
    
    
    36
    
    
    
    4,569
    
    
    
    4
    
    
    
    143
    
    
    
    5,903
    
    
    
    4
    
    
    
    179
    
    
    
    10,472
    
    
    
    8Other Securities
    
    
    72
    
    
    
    929
    
    
    
    1
    
    
    
    40
    
    
    
    1,960
    
    
    
    2
    
    
    
    112
    
    
    
    2,889
    
    
    
    3Corporate Bonds
    
    
    186
    
    
    
    169
    
    
    
    1
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    186
    
    
    
    169
    
    
    
    1$
    1,420
    
    
    $
    51,912
    
    
    
    114
    
    
    $
    335
    
    
    $
    14,889
    
    
    
    14
    
    
    $
    1,755
    
    
    $
    66,801
    
    
    
    128
   59




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##### Table of Contents



Loan Portfolio
    60




---



##### Table of Contents



Amount of Loans Outstanding as of December 31,2009
    
    
    2008
    
    
    2007
    
    
    2006
    
    
    2005(In Thousands)Real Estate Loans:Commercial Property
    
    $
    839,598
    
    
    $
    908,970
    
    
    $
    795,675
    
    
    $
    757,428
    
    
    $
    733,650Construction
    
    
    126,350
    
    
    
    178,783
    
    
    
    215,857
    
    
    
    202,207
    
    
    
    152,080Residential Property (1)
    
    
    77,149
    
    
    
    92,361
    
    
    
    90,375
    
    
    
    81,758
    
    
    
    88,442Total Real Estate Loans
    
    
    1,043,097
    
    
    
    1,180,114
    
    
    
    1,101,907
    
    
    
    1,041,393
    
    
    
    974,172Commercial and Industrial Loans:Commercial Term Loans
    
    
    1,420,034
    
    
    
    1,611,449
    
    
    
    1,599,853
    
    
    
    1,202,612
    
    
    
    945,210Commercial Lines of Credit
    
    
    101,159
    
    
    
    214,699
    
    
    
    256,978
    
    
    
    225,630
    
    
    
    224,271SBA Loans (2)
    
    
    139,531
    
    
    
    178,399
    
    
    
    118,528
    
    
    
    171,631
    
    
    
    155,491International Loans
    
    
    53,488
    
    
    
    95,185
    
    
    
    119,360
    
    
    
    126,561
    
    
    
    106,520Total Commercial and Industrial Loans
    
    
    1,714,212
    
    
    
    2,099,732
    
    
    
    2,094,719
    
    
    
    1,726,434
    
    
    
    1,431,492Consumer Loans (3)
    
    
    63,303
    
    
    
    83,525
    
    
    
    90,449
    
    
    
    100,121
    
    
    
    92,154Total Gross Loans
    
    $
    2,820,612
    
    
    $
    3,363,371
    
    
    $
    3,287,075
    
    
    $
    2,867,948
    
    
    $
    2,497,818
 
 (1)
    
    As of December 31, 2009, 2008, 2007, 2006 and 2005, residential mortgage loans held
for sale totaling $0, $0, $310,000, $630,000 and $1.1 million, respectively, were included at
the lower of cost or fair value.(2)
    
    As of December 31, 2009, 2008, 2007, 2006 and 2005, SBA loans held for sale totaling
$5.0 million, $37.4 million, $6.0 million, $23.2 million and $0, respectively, were included
at the lower of cost or fair value.(3)
    
    Consumer loans include home equity lines of credit.  Percentage Distribution
of Loans as of December 31,2009
    
    
    2008
    
    
    2007
    
    
    2006
    
    
    2005Real Estate Loans:Commercial Property
    
    
    29.8
    %
    
    
    27.0
    %
    
    
    24.2
    %
    
    
    26.4
    %
    
    
    29.4
    %Construction
    
    
    4.5
    %
    
    
    5.3
    %
    
    
    6.6
    %
    
    
    7.1
    %
    
    
    6.1
    %Residential Property
    
    
    2.7
    %
    
    
    2.8
    %
    
    
    2.7
    %
    
    
    2.8
    %
    
    
    3.5
    %Total Real Estate Loans
    
    
    37.0
    %
    
    
    35.1
    %
    
    
    33.5
    %
    
    
    36.3
    %
    
    
    39.0
    %Commercial and Industrial Loans:Commercial Term Loans
    
    
    50.3
    %
    
    
    47.9
    %
    
    
    48.7
    %
    
    
    41.9
    %
    
    
    37.8
    %Commercial Lines of Credit
    
    
    3.6
    %
    
    
    6.4
    %
    
    
    7.8
    %
    
    
    7.9
    %
    
    
    9.0
    %SBA Loans
    
    
    4.9
    %
    
    
    5.3
    %
    
    
    3.6
    %
    
    
    6.0
    %
    
    
    6.2
    %International Loans
    
    
    2.0
    %
    
    
    2.8
    %
    
    
    3.6
    %
    
    
    4.4
    %
    
    
    4.3
    %Total Commercial and Industrial Loans
    
    
    60.8
    %
    
    
    62.4
    %
    
    
    63.7
    %
    
    
    60.2
    %
    
    
    57.3
    %Consumer Loans
    
    
    2.2
    %
    
    
    2.5
    %
    
    
    2.8
    %
    
    
    3.5
    %
    
    
    3.7
    %Total Gross Loans
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %
  December 31,2009
    
    
    2008(In Thousands)Commitments to Extend Credit
    
    $
    262,821
    
    
    $
    386,785Standby Letters of Credit
    
    
    17,225
    
    
    
    47,289Commercial Letters of Credit
    
    
    13,544
    
    
    
    29,177Unused Credit Card Lines
    
    
    23,408
    
    
    
    16,912Total Undisbursed Loan Commitments
    
    $
    316,998
    
    
    $
    480,163
 61




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##### Table of Contents



After OneYear ButWithin
    
    
    Within
    
    
    AfterOne Year
    
    
    Five Years
    
    
    Five Years

    
    
    Total(In Thousands)Real Estate Loans:Commercial Property
    
    $
    703,955
    
    
    $
    135,643
    
    
    $
    
    
    
    $
    839,598Construction
    
    
    126,350
    
    
    
    
    
    
    
    
    
    
    
    126,350Residential Property
    
    
    19,463
    
    
    
    52,401
    
    
    
    5,285
    
    
    
    77,149Total Real Estate Loans
    
    
    849,768
    
    
    
    188,044
    
    
    
    5,285
    
    
    
    1,043,097Commercial and Industrial Loans:Commercial Term Loans
    
    
    1,075,332
    
    
    
    344,702
    
    
    
    
    
    
    
    1,420,034Commercial Lines of Credit
    
    
    101,159
    
    
    
    
    
    
    
    
    
    
    
    101,159SBA Loans
    
    
    136,269
    
    
    
    3,262
    
    
    
    
    
    
    
    139,531International Loans
    
    
    53,488
    
    
    
    
    
    
    
    
    
    
    
    53,488Total Commercial and Industrial Loans
    
    
    1,366,248
    
    
    
    347,964
    
    
    
    
    
    
    
    1,714,212Consumer Loans
    
    
    61,954
    
    
    
    1,349
    
    
    
    
    
    
    
    63,303Total Gross Loans
    
    $
    2,277,970
    
    
    $
    537,357
    
    
    $
    5,285
    
    
    $
    2,820,612Loans With Predetermined Interest Rates
    
    $
    412,984
    
    
    $
    512,365
    
    
    $
    5,285
    
    
    $
    930,634Loans With Variable Interest Rates
    
    $
    1,864,986
    
    
    $
    24,992
    
    
    $
    
    
    
    $
    1,889,978
  Balance as of
    
    
    Percentage of TotalIndustry
    
    December 31, 2009
    
    
    Gross Loans Outstanding(In Thousands)Lessors of Non-Residential Buildings
    
    $
    417,266
    
    
    
    14.8
    %Accommodation/Hospitality
    
    $
    413,380
    
    
    
    14.7
    %Gasoline Stations
    
    $
    343,100
    
    
    
    12.2
    %
  Non-Performing Assets
   62




---



##### Table of Contents



December 31,2009
    
    
    2008
    
    
    2007
    
    
    2006
    
    
    2005(Dollars in Thousands)Non-Performing Loans:Non-Accrual Loans:Real Estate Loans:Commercial Property
    
    $
    58,927
    
    
    $
    8,160
    
    
    $
    2,684
    
    
    $
    246
    
    
    $
    Construction
    
    
    15,185
    
    
    
    38,163
    
    
    
    24,118
    
    
    
    
    
    
    
    Residential Property
    
    
    3,335
    
    
    
    1,350
    
    
    
    1,490
    
    
    
    
    
    
    
    474Commercial and Industrial Loans
    
    
    140,931
    
    
    
    73,007
    
    
    
    25,729
    
    
    
    13,862
    
    
    
    9,574Consumer Loans
    
    
    622
    
    
    
    143
    
    
    
    231
    
    
    
    105
    
    
    
    74Total Non-Accrual Loans
    
    
    219,000
    
    
    
    120,823
    
    
    
    54,252
    
    
    
    14,213
    
    
    
    10,122Loans 90 Days or More Past Due and Still Accruing
(as to Principal or Interest):Commercial and Industrial Loans
    
    
    
    
    
    
    989
    
    
    
    150
    
    
    
    
    
    
    
    Consumer Loans
    
    
    67
    
    
    
    86
    
    
    
    77
    
    
    
    2
    
    
    
    9Total Loans 90 Days or More Past Due and Still
Accruing (as to Principal or Interest)
    
    
    67
    
    
    
    1,075
    
    
    
    227
    
    
    
    2
    
    
    
    9Total Non-Performing Loans
    
    
    219,067
    
    
    
    121,898
    
    
    
    54,479
    
    
    
    14,215
    
    
    
    10,131Other Real Estate Owned
    
    
    26,306
    
    
    
    823
    
    
    
    287
    
    
    
    
    
    
    
    Total Non-Performing Assets
    
    $
    245,373
    
    
    $
    122,721
    
    
    $
    54,766
    
    
    $
    14,215
    
    
    $
    10,131Non-Performing Loans as a Percentage of Total Gross Loans
    
    
    7.77
    %
    
    
    3.62
    %
    
    
    1.66
    %
    
    
    0.50
    %
    
    
    0.41
    %Non-Performing Assets as a Percentage of Total Assets
    
    
    7.76
    %
    
    
    3.17
    %
    
    
    1.37
    %
    
    
    0.38
    %
    
    
    0.30
    %
   63




---



##### Table of Contents



Allowance for Loan Losses and Allowance for Off-Balance Sheet Items
        64




---



##### Table of Contents




    
    changes in lending policies and procedures, including underwriting standards and
collection, charge-offs,
and recovery practice;
    
    changes in national and local economic and business conditions and developments,
including the condition
of various market segments;
    
    changes in the nature and volume of the portfolio;
    
    changes in the experience, ability, and depth of lending management and staff;
    
    changes in the trend of the volume and severity of past due and classified loans,
and trends in the volume
of non-accrual loans, troubled debt restructurings, charge-offs and other loan
modifications;
    
    changes in the quality of the Banks loan review system and the degree of oversight
by the Board of
Directors;
    
    the existence and effect of any concentrations of credit, and changes in the level
of such concentrations;
    
    transfer risk on cross-border lending activities;
    
    the effect of external factors such as competition and legal and regulatory
requirements as well as
declining collateral values on the level of estimated credit losses in the Banks current
portfolio.
   December 31,2009
    
    
    2008
    
    
    2007
    
    
    2006
    
    
    2005Allowance for Loan
    
    Allowance
    
    
    Loans
    
    
    Allowance
    
    
    Loans
    
    
    Allowance
    
    
    Loans
    
    
    Allowance
    
    
    Loans
    
    
    Allowance
    
    
    LoansLosses Applicable To
    
    Amount
    
    
    Receivable
    
    
    Amount
    
    
    Receivable
    
    
    Amount
    
    
    Receivable
    
    
    Amount
    
    
    Receivable
    
    
    Amount
    
    
    Receivable(Dollars in Thousands)Real Estate Loans:Commercial Property
    
    $
    19,149
    
    
    $
    839,598
    
    
    $
    5,587
    
    
    $
    908,970
    
    
    $
    2,269
    
    
    $
    795,675
    
    
    $
    2,101
    
    
    $
    757,428
    
    
    $
    2,043
    
    
    $
    733,650Construction
    
    
    9,043
    
    
    
    126,350
    
    
    
    4,102
    
    
    
    178,783
    
    
    
    3,478
    
    
    
    215,857
    
    
    
    586
    
    
    
    202,207
    
    
    
    475
    
    
    
    152,080Residential Property (1)
    
    
    997
    
    
    
    77,149
    
    
    
    449
    
    
    
    92,361
    
    
    
    32
    
    
    
    90,065
    
    
    
    19
    
    
    
    81,128
    
    
    
    19
    
    
    
    87,377Total Real Estate Loans
    
    
    29,189
    
    
    
    1,043,097
    
    
    
    10,138
    
    
    
    1,180,114
    
    
    
    5,779
    
    
    
    1,101,597
    
    
    
    2,706
    
    
    
    1,040,763
    
    
    
    2,537
    
    
    
    973,107Commercial and
Industrial Loans (1)
    
    
    110,678
    
    
    
    1,709,202
    
    
    
    58,866
    
    
    
    2,062,322
    
    
    
    36,011
    
    
    
    2,088,694
    
    
    
    23,099
    
    
    
    1,703,194
    
    
    
    21,035
    
    
    
    1,431,492Consumer Loans
    
    
    2,690
    
    
    
    63,303
    
    
    
    1,586
    
    
    
    83,525
    
    
    
    1,821
    
    
    
    90,449
    
    
    
    1,752
    
    
    
    100,121
    
    
    
    1,391
    
    
    
    92,154Unallocated
    
    
    2,439
    
    
    
    
    
    
    
    396
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total
    
    $
    144,996
    
    
    $
    2,815,602
    
    
    $
    70,986
    
    
    $
    3,325,961
    
    
    $
    43,611
    
    
    $
    3,280,740
    
    
    $
    27,557
    
    
    $
    2,844,078
    
    
    $
    24,963
    
    
    $
    2,496,753
 
 (1)
    
    Loans held for sale excluded. 65




---



##### Table of Contents



As of and for the Year Ended December 31,2009
    
    
    2008
    
    
    2007
    
    
    2006
    
    
    2005(Dollars in Thousands)Allowance for Loan Losses:Balance at Beginning of Year
    
    $
    70,986
    
    
    $
    43,611
    
    
    $
    27,557
    
    
    $
    24,963
    
    
    $
    22,702Charge-Offs:Real Estate Loans
    
    
    27,262
    
    
    
    15,005
    
    
    
    199
    
    
    
    
    
    
    
    Commercial and Industrial Loans
    
    
    95,768
    
    
    
    31,916
    
    
    
    22,255
    
    
    
    5,333
    
    
    
    4,371Consumer Loans
    
    
    2,350
    
    
    
    1,231
    
    
    
    876
    
    
    
    796
    
    
    
    827Total Charge-Offs
    
    
    125,380
    
    
    
    48,152
    
    
    
    23,330
    
    
    
    6,129
    
    
    
    5,198Recoveries on Loans Previously Charged Off:Real Estate Loans
    
    
    5
    
    
    
    
    
    
    
    
    
    
    
    406
    
    
    
    Commercial and Industrial Loans
    
    
    2,650
    
    
    
    1,979
    
    
    
    494
    
    
    
    957
    
    
    
    2,193Consumer Loans
    
    
    128
    
    
    
    203
    
    
    
    202
    
    
    
    187
    
    
    
    201Total Recoveries on Loans Previously Charged Off
    
    
    2,783
    
    
    
    2,182
    
    
    
    696
    
    
    
    1,550
    
    
    
    2,394Net Loan Charge-Offs
    
    
    122,597
    
    
    
    45,970
    
    
    
    22,634
    
    
    
    4,579
    
    
    
    2,804Provision Charged to Operating Expense
    
    
    196,607
    
    
    
    73,345
    
    
    
    38,688
    
    
    
    7,173
    
    
    
    5,065Balance at End of Year
    
    $
    144,996
    
    
    $
    70,986
    
    
    $
    43,611
    
    
    $
    27,557
    
    
    $
    24,963Allowance for Off-Balance Sheet Items:Balance at Beginning of Year
    
    $
    4,096
    
    
    $
    1,765
    
    
    $
    2,130
    
    
    $
    2,130
    
    
    $
    1,800Provision Charged to Operating Expense
    
    
    (220
    )
    
    
    2,331
    
    
    
    (365
    )
    
    
    
    
    
    
    330Balance at End of Year
    
    $
    3,876
    
    
    $
    4,096
    
    
    $
    1,765
    
    
    $
    2,130
    
    
    $
    2,130Ratios:Net Loan Charge-Offs to Average Total Gross Loans
    
    
    3.88
    %
    
    
    1.38
    %
    
    
    0.73
    %
    
    
    0.17
    %
    
    
    0.12
    %Net Loan Charge-Offs to Total Gross Loans at End of Period
    
    
    4.35
    %
    
    
    1.37
    %
    
    
    0.69
    %
    
    
    0.16
    %
    
    
    0.11
    %Allowance for Loan Losses to Average Total Gross Loans
    
    
    4.59
    %
    
    
    2.13
    %
    
    
    1.41
    %
    
    
    1.00
    %
    
    
    1.05
    %Allowance for Loan Losses to Total Gross Loans at End of Period
    
    
    5.14
    %
    
    
    2.11
    %
    
    
    1.33
    %
    
    
    0.96
    %
    
    
    1.00
    %Net Loan Charge-Offs to Allowance for Loan Losses
    
    
    84.55
    %
    
    
    64.76
    %
    
    
    51.90
    %
    
    
    16.62
    %
    
    
    11.23
    %Net Loan Charge-Offs to Provision Charged to Operating Expense
    
    
    62.36
    %
    
    
    62.68
    %
    
    
    58.50
    %
    
    
    63.84
    %
    
    
    55.36
    %Allowance for Loan Losses to Non-Performing Loans
    
    
    66.19
    %
    
    
    58.23
    %
    
    
    80.05
    %
    
    
    193.86
    %
    
    
    246.40
    %Balances:Average Total Gross Loans Outstanding During Period
    
    $
    3,158,624
    
    
    $
    3,334,008
    
    
    $
    3,082,671
    
    
    $
    2,751,565
    
    
    $
    2,386,575Total Gross Loans Outstanding at End of Period
    
    $
    2,820,612
    
    
    $
    3,363,371
    
    
    $
    3,287,075
    
    
    $
    2,867,948
    
    
    $
    2,497,818Non-Performing Loans at End of Period
    
    $
    219,067
    
    
    $
    121,898
    
    
    $
    54,479
    
    
    $
    14,215
    
    
    $
    10,131
   66




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##### Table of Contents



Deposits
   Year Ended December 31,2009
    
    
    2008
    
    
    2007Balance
    
    
    Percent
    
    
    Balance
    
    
    Percent
    
    
    Balance
    
    
    Percent(Dollars in Thousands)Demand, Noninterest-Bearing
    
    $
    556,306
    
    
    
    20.2
    %
    
    $
    536,944
    
    
    
    17.5
    %
    
    $
    680,282
    
    
    
    22.7
    %Savings
    
    
    111,172
    
    
    
    4.0
    %
    
    
    81,869
    
    
    
    2.7
    %
    
    
    93,099
    
    
    
    3.1
    %Money Market Checking and NOW Accounts
    
    
    685,858
    
    
    
    24.9
    %
    
    
    370,401
    
    
    
    12.1
    %
    
    
    445,806
    
    
    
    14.9
    %Time Deposits of $100,000 or More
    
    
    815,190
    
    
    
    29.8
    %
    
    
    849,800
    
    
    
    27.6
    %
    
    
    1,441,683
    
    
    
    47.9
    %Other Time Deposits
    
    
    580,801
    
    
    
    21.1
    %
    
    
    1,231,066
    
    
    
    40.1
    %
    
    
    340,829
    
    
    
    11.4
    %Total Deposits
    
    $
    2,749,327
    
    
    
    100.0
    %
    
    $
    3,070,080
    
    
    
    100.0
    %
    
    $
    3,001,699
    
    
    
    100.0
    %
  67




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##### Table of Contents



Interest Rate Risk Management  Liquidity  Hanmi
Bank.
   Year Ended December 31,2009
    
    
    2008
    
    
    2007Average
    
    
    Average
    
    
    Average
    
    
    Average
    
    
    Average
    
    
    AverageBalance
    
    
    Rate
    
    
    Balance
    
    
    Rate
    
    
    Balance
    
    
    Rate(Dollars in Thousands)Demand, Noninterest-Bearing
    
    $
    541,822
    
    
    
    
    
    
    $
    630,631
    
    
    
    
    
    
    $
    702,329
    
    
    
    Savings
    
    
    91,089
    
    
    
    2.56
    %
    
    
    89,866
    
    
    
    2.33
    %
    
    
    97,173
    
    
    
    2.06
    %Money Market Checking and NOW Accounts
    
    
    507,619
    
    
    
    1.93
    %
    
    
    618,779
    
    
    
    3.22
    %
    
    
    452,825
    
    
    
    3.41
    %Time Deposits of $100,000 or More
    
    
    1,051,994
    
    
    
    3.31
    %
    
    
    1,045,968
    
    
    
    4.17
    %
    
    
    1,430,603
    
    
    
    5.28
    %Other Time Deposits
    
    
    916,798
    
    
    
    3.20
    %
    
    
    527,927
    
    
    
    3.55
    %
    
    
    306,876
    
    
    
    5.07
    %Total Deposits
    
    $
    3,109,322
    
    
    
    2.45
    %
    
    $
    2,913,171
    
    
    
    2.90
    %
    
    $
    2,989,806
    
    
    
    3.63
    %
  December 31,2009
    
    
    2008
    
    
    2007(In Thousands)Three Months or Less
    
    $
    344,901
    
    
    $
    238,695
    
    
    $
    958,917Over Three Months Through Six Months
    
    
    246,116
    
    
    
    246,087
    
    
    
    289,293Over Six Months Through Twelve Months
    
    
    219,739
    
    
    
    338,233
    
    
    
    188,890Over Twelve Months
    
    
    4,434
    
    
    
    26,785
    
    
    
    4,583Total Time Deposits of $100,000 or More
    
    $
    815,190
    
    
    $
    849,800
    
    
    $
    1,441,683
 Federal Home Loan Bank Advances
 Note 10  FHLB Advances and Other
Borrowings
 68




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##### Table of Contents



Junior Subordinated Debentures
 Note 11  Junior
Subordinated Debentures
 INTEREST RATE RISK MANAGEMENT
  69




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##### Table of Contents



After
    
    
    After OneLess
    
    
    Three
    
    
    Year ButThan
    
    
    Months
    
    
    Within
    
    
    After
    
    
    Non-Three
    
    
    But Within
    
    
    Five
    
    
    Five
    
    
    Interest-Months
    
    
    One Year
    
    
    Years
    
    
    Years
    
    
    Sensitive
    
    
    Total(Dollars in Thousands)ASSETSCash and Due from Banks
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    55,263
    
    
    $
    55,263InterestBearing Deposits in Other Banks
    
    
    95,559
    
    
    
    3,288
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    98,847Investment Securities:Fixed Rate
    
    
    4,624
    
    
    
    11,980
    
    
    
    32,367
    
    
    
    71,877
    
    
    
    
    
    
    
    120,848Floating Rate
    
    
    68
    
    
    
    306
    
    
    
    7,180
    
    
    
    4,887
    
    
    
    
    
    
    
    12,441Loans:Fixed Rate
    
    
    151,971
    
    
    
    297,291
    
    
    
    475,805
    
    
    
    5,285
    
    
    
    
    
    
    
    930,352Floating Rate
    
    
    1,627,047
    
    
    
    14,921
    
    
    
    29,292
    
    
    
    
    
    
    
    
    
    
    
    1,671,260NonAccrual
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    219,000
    
    
    
    219,000Deferred Loan Fees and Allowance
for Loan Losses
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (146,548
    )
    
    
    (146,548
    )Federal Home Loan Bank and Federal
Reserve Bank Stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    38,575
    
    
    
    
    
    
    
    38,575Other Assets
    
    
    
    
    
    
    26,408
    
    
    
    
    
    
    
    6,785
    
    
    
    129,475
    
    
    
    162,668TOTAL ASSETS
    
    $
    1,879,269
    
    
    $
    354,194
    
    
    $
    544,644
    
    
    $
    127,409
    
    
    $
    257,190
    
    
    $
    3,162,706LIABILITIES AND STOCKHOLDERS EQUITYLiabilities:Deposits:Demand  NoninterestBearing
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    556,306
    
    
    $
    556,306Savings
    
    
    11,017
    
    
    
    26,416
    
    
    
    53,823
    
    
    
    19,916
    
    
    
    
    
    
    
    111,172Money Market Checking and NOW
Accounts
    
    
    95,881
    
    
    
    198,843
    
    
    
    278,109
    
    
    
    113,025
    
    
    
    
    
    
    
    685,858Time Deposits:Fixed Rate
    
    
    648,555
    
    
    
    741,664
    
    
    
    5,767
    
    
    
    5
    
    
    
    
    
    
    
    1,395,991Floating Rate
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Federal Home Loan Bank Advances
    
    
    150,197
    
    
    
    606
    
    
    
    3,175
    
    
    
    
    
    
    
    
    
    
    
    153,978Other Borrowings
    
    
    1,747
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,747Junior Subordinated Debentures
    
    
    82,406
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    82,406Other Liabilities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    25,504
    
    
    
    25,504Stockholders Equity
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    149,744
    
    
    
    149,744TOTAL LIABILITIES AND
STOCKHOLDERS EQUITY
    
    $
    989,803
    
    
    $
    967,529
    
    
    $
    340,874
    
    
    $
    132,946
    
    
    $
    731,554
    
    
    $
    3,162,706Repricing Gap
    
    $
    889,466
    
    
    $
    (613,335
    )
    
    $
    203,770
    
    
    $
    (5,537
    )
    
    $
    (474,364
    )
    
    $
    Cumulative Repricing Gap
    
    $
    889,466
    
    
    $
    276,131
    
    
    $
    479,901
    
    
    $
    474,364
    
    
    $
    
    
    
    $
    Cumulative Repricing Gap as a
Percentage of Total Assets
    
    
    28.12
    %
    
    
    8.73
    %
    
    
    15.17
    %
    
    
    15.00
    %
    
    
    Cumulative Repricing Gap as a
Percentage of Interest-Earning Assets
    
    
    30.97
    %
    
    
    9.61
    %
    
    
    16.71
    %
    
    
    16.51
    %
    
    
    
  70




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##### Table of Contents



Less Than Three Months
    
    Less Than Twelve MonthsDecember 31,
    
    December 31,2009
    
    2008
    
    2009
    
    2008(Dollars in Thousands)Cumulative Repricing Gap
    
    $
    889,466
    
    
    $
    1,127,888
    
    
    $
    276,131
    
    
    $
    (145,945
    )Percentage of Total Assets
    
    
    28.12
    %
    
    
    29.10
    %
    
    
    8.73
    %
    
    
    (3.77
    %)Percentage of Interest-Earning Assets
    
    
    30.97
    %
    
    
    31.21
    %
    
    
    9.61
    %
    
    
    (4.04
    %)
   Rate Shock TablePercentage Changes
    
    Change in AmountChange in
    
    Net
    
    Economic
    
    Net
    
    EconomicInterest
    
    Interest
    
    Value of
    
    Interest
    
    Value ofRate
    
    Income
    
    Equity
    
    Income
    
    Equity(Dollars in Thousands)200%
    
    
    11.08
    %
    
    
    7.78
    %
    
    $
    15,414
    
    
    $
    23,345100%
    
    
    5.44
    %
    
    
    4.49
    %
    
    $
    7,575
    
    
    $
    13,468(100%)
    
    
    (1
    )
    
    
    (1
    )
    
    
    (1
    )
    
    
    (1
    )(200%)
    
    
    (1
    )
    
    
    (1
    )
    
    
    (1
    )
    
    
    (1
    )
 
 (1)
    
    The table above only reflects the impact of upward shocks due to the fact
that a downward parallel shock of 100 basis points or more is not possible given that
some short-term rates are currently less than one percent.  71




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##### Table of Contents



CAPITAL RESOURCES AND LIQUIDITY
 Capital Resources
    Ratio of Tangible ShareholdersDate
    
    Equity to Total Tangible AssetsBy December 31, 2009
    
    Not Less Than 7.0 PercentBy July 31, 2010
    
    Not Less Than 9.0 PercentFrom December 31, 2010 and Until the Order is Terminated
    
    Not Less Than 9.5 Percent
  Liquidity  Hanmi Financial
 Dividends Notes to
Consolidated Financial Statements, Note 15  Regulatory Matters,
 72




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##### Table of Contents



Liquidity  Hanmi Bank
      73




---



##### Table of Contents



OFF-BALANCE SHEET ARRANGEMENTS
   December 31,2009
    
    
    2008(In Thousands)Commitments to Extend Credit
    
    $
    262,821
    
    
    $
    386,785Standby Letters of Credit
    
    
    17,225
    
    
    
    47,289Commercial Letters of Credit
    
    
    13,544
    
    
    
    29,177Unused Credit Card Lines
    
    
    23,408
    
    
    
    16,912Total Undisbursed Loan Commitments
    
    $
    316,998
    
    
    $
    480,163
 74




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##### Table of Contents



CONTRACTUAL OBLIGATIONS
  More Than
    
    
    More ThanOne Year
    
    
    Three Yearsand Less
    
    
    and Less
    
    
    MoreLess Than
    
    
    Than Three
    
    
    Than Five
    
    
    Than FiveContractual Obligations
    
    One Year
    
    
    Years
    
    
    Years
    
    
    Years
    
    
    Total(In Thousands)Time Deposits
    
    $
    1,389,983
    
    
    $
    5,974
    
    
    $
    29
    
    
    $
    5
    
    
    $
    1,395,991Federal Home Loan Bank Advances and Other Borrowings
    
    
    1,747
    
    
    
    150,000
    
    
    
    3,978
    
    
    
    
    
    
    
    155,725Commitments to Extend Credit
    
    
    262,821
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    262,821Junior Subordinated Debentures
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    82,406
    
    
    
    82,406Standby Letters of Credit
    
    
    17,184
    
    
    
    41
    
    
    
    
    
    
    
    
    
    
    
    17,225Operating Lease Obligations
    
    
    5,401
    
    
    
    8,532
    
    
    
    5,390
    
    
    
    7,344
    
    
    
    26,667Total Contractual Obligations
    
    $
    1,677,136
    
    
    $
    164,547
    
    
    $
    9,397
    
    
    $
    89,755
    
    
    $
    1,940,835
 RECENTLY ISSUED ACCOUNTING STANDARDS
 FASB ASC 105, Generally Accepted Accounting Principles
 FASB ASC 810, Consolidations
 FASB ASC 860, Transfers and Servicing
 75




---



##### Table of Contents



FASB ASC 855, Subsequent Events
 FASB ASU 2010-01, Equity (Topic 505), Accounting for Distributions to Shareholders with
Components of Stock and Cash
 FASB ASU 2010-06, Fair Value Measurements and Disclosures (Topic 820)
 
 ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
 Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations
 Interest Rate Risk Management Capital Resources and Liquidity .
 
 ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
  
 ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
  
 ITEM 9A. CONTROLS AND PROCEDURES
 Disclosure Controls and Procedures
 Evaluation of Disclosure Controls and Procedures
   76




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##### Table of Contents



Managements Report on Internal Control Over Financial Reporting
  
    
    pertain to the maintenance of records that in reasonable detail accurately and fairly
reflect the transactions and dispositions of the assets of the company;
    
    provide reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with U.S. generally accepted accounting
principles;
    
    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 consolidated financial statements.
      77




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##### Table of Contents



Changes in Internal Control over Financial Reporting
  We designed and implemented several key initiatives to significantly strengthen our
internal loan review function. These included:
 
    
    intensive review by the loan monitoring department to validate the
appropriateness of loan grades;
    
    expanded additional review of all loan grading changes by management
and senior loan officers;
    
    independent third party review to ensure the assessment of our internal
loan grades.
 We implemented several key changes to ensure the adequacy of allowance for loan losses.
These included:
 
    
    increasing qualitative adjustments based on current and potential loss
scenarios to sufficiently reflect deterioration in the asset portfolio as well as
economic decline;
    
    implementing more stringent assessment of restructured loans by
down-grading all such loans to Substandard;
    
    closely monitoring collateral dependent loans by continually obtaining
up to date valuations;
    
    adhering to more stringent requirements for charge-offs regards to
impaired loans.
  Remediation of Material Weakness
  
    
    increasing management oversight of the loan portfolio by establishing two new
departments to primarily focus on performing quality control review and monitoring;
    
    providing intensive onsite review and training to loan officers and other
branch staffs by management;
    
    outsourcing to independent third parties for credit review to validate the
appropriateness of internal loan grading.
  78




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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
 Internal Control-Integrated
Framework
      79




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80




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##### Table of Contents



ITEM 9B. OTHER INFORMATION
  
 PART III
 
 ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
 The Board of Directors and
Executive Officers Section 16(a) Beneficial Ownership Reporting Compliance
 Code of Ethics
 www.hanmi.com
 
 ITEM 11. EXECUTIVE COMPENSATION
 Executive Compensation
 
 ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER
MATTERS
 Beneficial Ownership of Principal
Stockholders and Management
 Securities Authorized for Issuance Under Equity Compensation Plans
  Number of SecuritiesRemaining Available forFuture Issuance UnderNumber of Securities to be
    
    
    Weighted-Average
    
    
    Equity CompensationIssued Upon Exercise of
    
    
    Exercise Price of
    
    
    Plans (ExcludingOutstanding Options,
    
    
    Outstanding Options,
    
    
    SecuritiesWarrants and Rights
    
    
    Warrants and Rights
    
    
    Reflected in Column(a))(a)
    
    
    
    (b)Equity Compensation Plans
Approved By Security Holders
    
    
    1,180,358
    
    
    $
    11.78
    
    
    
    3,000,000Equity Compensation Plans Not
Approved By Security Holders
    
    
    
    
    
    $
    
    
    
    
    Total Equity Compensation Plans
    
    
    1,180,358
    
    
    $
    11.78
    
    
    
    3,000,000
 81




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ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
INDEPENDENCE
 Certain Relationships and
Related Transactions Director Independence
 
 ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
 Independent Accountants
 
 PART IV
 
 ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
 Financial Statements and Schedules
 (1)
    
    The Financial Statements required to be filed hereunder are listed in the Index
to Consolidated Financial Statements on page 83 of this Report.(2)
    
    All Financial Statement Schedules have been omitted as the required information
is inapplicable 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 at pages 144 and 145.
 82




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HANMI FINANCIAL CORPORATION AND SUBSIDIARIES
 
 INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
 PageReport of Independent Registered Public Accounting Firm
    
    
    84Consolidated Balance Sheets as of December 31, 2009 and 2008
    
    
    85Consolidated Statements of Operations for the Years Ended December 31, 2009, 2008 and 2007
    
    
    86Consolidated Statements of Changes in Stockholders Equity and Comprehensive Income
for the Years Ended December 31, 2009, 2008 and 2007
    
    
    87Consolidated Statements of Cash Flows for the Years Ended December 31, 2009, 2008 and 2007
    
    
    88Notes to Consolidated Financial Statements
    
    
    89
 83




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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
     Internal Control-Integrated
Framework
  
 84




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##### Table of Contents



HANMI FINANCIAL CORPORATION AND SUBSIDIARIES
 
 CONSOLIDATED BALANCE SHEETS  (Dollars in Thousands)
 December
31,2009
    
    

2008ASSETSCash and Due From Banks
    
    $
    55,263
    
    
    $
    83,933Interest-Bearing Deposits in Other Banks
    
    
    98,847
    
    
    
    2,014Federal Funds Sold
    
    
    
    
    
    
    130,000Cash and Cash Equivalents
    
    
    154,110
    
    
    
    215,947Securities Held to Maturity, at Amortized Cost (Fair Value: 2009  $871; 2008  $910)
    
    
    869
    
    
    
    910Securities Available for Sale, at Fair Value
    
    
    132,420
    
    
    
    196,207Loans Receivable, Net of Allowance for Loan Losses of $144,996 and $70,986 at
December 31, 2009 and 2008, Respectively
    
    
    2,669,054
    
    
    
    3,253,715Loans Held for Sale, at the Lower of Cost or Fair Value
    
    
    5,010
    
    
    
    37,410Customers Liability on Acceptances
    
    
    994
    
    
    
    4,295Premises and Equipment, Net
    
    
    18,657
    
    
    
    20,279Accrued Interest Receivable
    
    
    9,492
    
    
    
    12,347Other Real Estate Owned
    
    
    26,306
    
    
    
    823Deferred Income Taxes
    
    
    3,608
    
    
    
    29,456Servicing Assets
    
    
    3,842
    
    
    
    3,791Other Intangible Assets
    
    
    3,382
    
    
    
    4,950Federal Home Loan Bank Stock, at Cost
    
    
    30,697
    
    
    
    30,697Federal Reserve Bank Stock, at Cost
    
    
    7,878
    
    
    
    10,228Income Taxes Receivable
    
    
    56,554
    
    
    
    11,712Bank-Owned Life Insurance
    
    
    26,408
    
    
    
    25,476Other Assets
    
    
    13,425
    
    
    
    17,573TOTAL ASSETS
    
    $
    3,162,706
    
    
    $
    3,875,816LIABILITIES AND STOCKHOLDERS EQUITYLIABILITIES:Deposits:Noninterest-Bearing
    
    $
    556,306
    
    
    $
    536,944Interest-Bearing:
    
    
    2,193,021
    
    
    
    2,533,136Total Deposits
    
    
    2,749,327
    
    
    
    3,070,080Accrued Interest Payable
    
    
    12,606
    
    
    
    18,539Acceptances Outstanding
    
    
    994
    
    
    
    4,295Federal Home Loan Bank Advances
    
    
    153,978
    
    
    
    422,196Other Borrowings
    
    
    1,747
    
    
    
    787Junior Subordinated Debentures
    
    
    82,406
    
    
    
    82,406Other Liabilities
    
    
    11,904
    
    
    
    13,598Total Liabilities
    
    
    3,012,962
    
    
    
    3,611,901COMMITMENTS AND CONTINGENCIESSTOCKHOLDERS EQUITY:Common Stock, $0.001 Par Value; Authorized 200,000,000 Shares; Issued 55,814,890
Shares (51,182,390 Shares Outstanding) and 50,538,049 Shares (45,905,549 Shares
Outstanding) at December 31, 2009 and 2008, Respectively
    
    
    56
    
    
    
    51Additional Paid-In Capital
    
    
    357,174
    
    
    
    349,304Unearned Compensation
    
    
    (302
    )
    
    
    (218
    )Accumulated Other Comprehensive Income  Unrealized Gain on Securities Available
for Sale, Interest-Only Strips and Interest Rate Swaps, Net of Income Taxes of $602
and $473 at December 31, 2009 and 2008, Respectively
    
    
    859
    
    
    
    544Accumulated Deficit
    
    
    (138,031
    )
    
    
    (15,754
    )Treasury Stock, at Cost (4,632,500 Shares at December 31, 2009 and 2008)
    
    
    (70,012
    )
    
    
    (70,012
    )Total Stockholders Equity
    
    
    149,744
    
    
    
    263,915TOTAL LIABILITIES AND STOCKHOLDERS EQUITY
    
    $
    3,162,706
    
    
    $
    3,875,816
  85




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HANMI FINANCIAL CORPORATION AND SUBSIDIARIES
 
 CONSOLIDATED STATEMENTS OF OPERATIONS  (Dollars in Thousands, Except Per Share Data)
 Year Ended December 31,2009
    
    
    2008
    
    
    2007INTEREST AND DIVIDEND INCOME:Interest and Fees on Loans
    
    $
    173,318
    
    
    $
    223,942
    
    
    $
    261,992Taxable Interest on Investment Securities
    
    
    5,675
    
    
    
    9,387
    
    
    
    13,399Tax-Exempt Interest on Investment Securities
    
    
    2,303
    
    
    
    2,717
    
    
    
    3,055Interest on Term Federal Funds Sold
    
    
    1,718
    
    
    
    43
    
    
    
    5Dividends on Federal Reserve Bank Stock
    
    
    592
    
    
    
    692
    
    
    
    704Interest on Federal Funds Sold and Securities Purchased Under Resale Agreements
    
    
    326
    
    
    
    166
    
    
    
    1,032Interest on Interest-Bearing Deposits in Other Banks
    
    
    151
    
    
    
    10
    
    
    
    Dividends on Federal Home Loan Bank Stock
    
    
    64
    
    
    
    1,226
    
    
    
    709Total Interest and Dividend Income
    
    
    184,147
    
    
    
    238,183
    
    
    
    280,896INTEREST EXPENSE:Interest on Deposits
    
    
    76,246
    
    
    
    84,353
    
    
    
    108,517Interest on Federal Home Loan Bank Advances
    
    
    3,399
    
    
    
    14,027
    
    
    
    12,156Interest on Junior Subordinated Debentures
    
    
    3,271
    
    
    
    5,056
    
    
    
    6,644Interest on Other Borrowings
    
    
    2
    
    
    
    346
    
    
    
    1,793Total Interest Expense
    
    
    82,918
    
    
    
    103,782
    
    
    
    129,110NET INTEREST INCOME (LOSS) BEFORE PROVISION FOR CREDIT LOSSES
    
    
    101,229
    
    
    
    134,401
    
    
    
    151,786Provision for Credit Losses
    
    
    196,387
    
    
    
    75,676
    
    
    
    38,323NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES
    
    
    (95,158
    )
    
    
    58,725
    
    
    
    113,463NON-INTEREST INCOME:Service Charges on Deposit Accounts
    
    
    17,054
    
    
    
    18,463
    
    
    
    18,061Insurance Commissions
    
    
    4,492
    
    
    
    5,067
    
    
    
    4,954Remittance Fees
    
    
    2,109
    
    
    
    2,194
    
    
    
    2,049Trade Finance Fees
    
    
    1,956
    
    
    
    3,088
    
    
    
    4,493Other Service Charges and Fees
    
    
    1,810
    
    
    
    2,365
    
    
    
    2,527Net Gain on Sales of Loans
    
    
    1,220
    
    
    
    765
    
    
    
    5,452Bank-Owned Life Insurance Income
    
    
    932
    
    
    
    952
    
    
    
    933Net Gain on Sales of Investment Securities
    
    
    1,833
    
    
    
    77
    
    
    
    Other-Than-Temporary Impairment Loss on Securities
    
    
    
    
    
    
    (2,410
    )
    
    
    (1,074
    )Other Operating Income
    
    
    704
    
    
    
    2,293
    
    
    
    2,611Total Non-Interest Income
    
    
    32,110
    
    
    
    32,854
    
    
    
    40,006NON-INTEREST EXPENSE:Salaries and Employee Benefits
    
    
    33,101
    
    
    
    42,209
    
    
    
    47,036Occupancy and Equipment
    
    
    11,239
    
    
    
    11,158
    
    
    
    10,494Deposit Insurance premiums and Regulatory Assessments
    
    
    10,418
    
    
    
    3,713
    
    
    
    587Data Processing
    
    
    6,297
    
    
    
    5,799
    
    
    
    6,390Other Real Estate Owned Expense
    
    
    5,890
    
    
    
    390
    
    
    
    8Professional Fees
    
    
    4,099
    
    
    
    3,539
    
    
    
    2,468Advertising and Promotion
    
    
    2,402
    
    
    
    3,518
    
    
    
    3,630Supplies and Communications
    
    
    2,352
    
    
    
    2,518
    
    
    
    2,592Loan-Related Expense
    
    
    1,947
    
    
    
    790
    
    
    
    674Amortization of Other Intangible Assets
    
    
    1,568
    
    
    
    1,958
    
    
    
    2,324Other Operating Expenses
    
    
    11,041
    
    
    
    12,042
    
    
    
    10,835Impairment Loss on Goodwill
    
    
    
    
    
    
    107,393
    
    
    
    102,891Total Non-Interest Expense
    
    
    90,354
    
    
    
    195,027
    
    
    
    189,929INCOME (LOSS) BEFORE PROVISION (BENEFIT) FOR INCOME TAXES
    
    
    (153,402
    )
    
    
    (103,448
    )
    
    
    (36,460
    )Provision (Benefit) for Income Taxes
    
    
    (31,125
    )
    
    
    (1,355
    )
    
    
    24,302NET LOSS
    
    $
    (122,277
    )
    
    $
    (102,093
    )
    
    $
    (60,762
    )EARNINGS (LOSS) PER SHARE:Basic
    
    $
    (2.57
    )
    
    $
    (2.23
    )
    
    $
    (1.27
    )Diluted
    
    $
    (2.57
    )
    
    $
    (2.23
    )
    
    $
    (1.27
    )WEIGHTED-AVERAGE SHARES OUTSTANDING:Basic
    
    
    47,570,361
    
    
    
    45,872,541
    
    
    
    47,787,213Diluted
    
    
    47,570,361
    
    
    
    45,872,541
    
    
    
    47,787,213DIVIDENDS DECLARED PER SHARE
    
    $
    
    
    
    $
    0.09
    
    
    $
    0.24
  86




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HANMI
FINANCIAL CORPORATION AND SUBSIDIARIES
 
 CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS EQUITY AND COMPREHENSIVE INCOME  (Dollars in Thousands)
 Common Stock  Number of Shares
    


    Stockholders EquityGross
    
    
    
    
    
    
    Net
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    AccumulatedShares
    
    
    
    
    
    
    Shares
    
    
    
    
    
    
    Additional
    
    
    
    
    
    
    Other
    
    
    Retained
    
    
    Treasury
    
    
    TotalIssued and
    
    
    Treasury
    
    
    Issued and
    
    
    Common
    
    
    Paid-in
    
    
    Unearned
    
    
    Comprehensive
    
    
    Earnings
    
    
    Stock,
    
    
    StockholdersOutstanding
    
    
    Shares
    
    
    Outstanding
    
    
    Stock
    
    
    Capital
    
    
    Compensation
    
    
    Income (Loss)
    
    
    (Deficit)
    
    
    at Cost
    
    
    EquityBALANCE AT JANUARY 1, 2007
    
    
    50,239,613
    
    
    
    (1,163,000
    )
    
    
    49,076,613
    
    
    
    50
    
    
    
    344,810
    
    
    
    
    
    
    
    (3,200
    )
    
    
    164,751
    
    
    
    (20,041
    )
    
    
    486,370Shares Issued for Business Acquisitions
    
    
    102,181
    
    
    
    
    
    
    
    102,181
    
    
    
    
    
    
    
    2,198
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,198Exercises of Stock Options and Stock Warrants
    
    
    132,647
    
    
    
    
    
    
    
    132,647
    
    
    
    
    
    
    
    1,164
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,164Share-Based Compensation Expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,880
    
    
    
    11
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,891Restricted Stock Awards
    
    
    19,000
    
    
    
    
    
    
    
    19,000
    
    
    
    
    
    
    
    256
    
    
    
    (256
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Tax Benefit from Exercise of Stock Options
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    317
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    317Cash Dividends
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (11,574
    )
    
    
    
    
    
    
    (11,574
    )Repurchase of Common Stock
    
    
    
    
    
    
    (3,469,500
    )
    
    
    (3,469,500
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (49,971
    )
    
    
    (49,971
    )Repurchase of Stock Warrants
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,552
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,552
    )Comprehensive Income:Net Loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (60,762
    )
    
    
    
    
    
    
    (60,762
    )Change in Unrealized Gain on Securities
Available for Sale, Interest-Only Strips
and
Interest Rate Swaps, Net of Income Taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,475
    
    
    
    
    
    
    
    
    
    
    
    3,475Total Comprehensive Loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (57,287
    )BALANCE AT DECEMBER 31, 2007
    
    
    50,493,441
    
    
    
    (4,632,500
    )
    
    
    45,860,941
    
    
    
    50
    
    
    
    348,073
    
    
    
    (245
    )
    
    
    275
    
    
    
    92,415
    
    
    
    (70,012
    )
    
    
    370,556Cumulative-Effect Adjustment  Adoption of
EITF Issue No. 06-4
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,223
    )
    
    
    
    
    
    
    (2,223
    )Shares Issued for Business Acquisitions
    
    
    39,608
    
    
    
    
    
    
    
    39,608
    
    
    
    1
    
    
    
    292
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    293Repurchase of Stock Options
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (70
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (70
    )Share-Based Compensation Expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    983
    
    
    
    53
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,036Restricted Stock Awards
    
    
    10,000
    
    
    
    
    
    
    
    10,000
    
    
    
    
    
    
    
    67
    
    
    
    (67
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Cancellation of Restricted Stock Award
    
    
    (5,000
    )
    
    
    
    
    
    
    (5,000
    )
    
    
    
    
    
    
    (41
    )
    
    
    41
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Cash Dividends
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3,853
    )
    
    
    
    
    
    
    (3,853
    )Comprehensive Loss:Net Loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (102,093
    )
    
    
    
    
    
    
    (102,093
    )Change in Unrealized Gain on Securities
Available for Sale, Interest-Only Strips
and
Interest Rate Swaps, Net of Income Taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    269
    
    
    
    
    
    
    
    
    
    
    
    269Total Comprehensive Loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (101,824
    )BALANCE AT DECEMBER 31, 2008
    
    
    50,538,049
    
    
    
    (4,632,500
    )
    
    
    45,905,549
    
    
    $
    51
    
    
    $
    349,304
    
    
    $
    (218
    )
    
    $
    544
    
    
    $
    (15,754
    )
    
    $
    (70,012
    )
    
    $
    263,915Shares Issued for Business Acquisitions
    
    
    39,418
    
    
    
    
    
    
    
    39,418
    
    
    
    
    
    
    
    46
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    46Issuance of Stock in Private Offering
    
    
    5,070,423
    
    
    
    
    
    
    
    5,070,423
    
    
    
    5
    
    
    
    6,834
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6,839Share-Based Compensation Expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    836
    
    
    
    70
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    906Restricted Stock Awards
    
    
    205,000
    
    
    
    
    
    
    
    205,000
    
    
    
    
    
    
    
    284
    
    
    
    (284
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Cancellation of Restricted Stock Award
    
    
    (38,000
    )
    
    
    
    
    
    
    (38,000
    )
    
    
    
    
    
    
    (130
    )
    
    
    130
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Comprehensive Loss:Net Loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (122,277
    )
    
    
    
    
    
    
    (122,277
    )Change in Unrealized Gain on Securities
Available for Sale, Interest-Only Strips
and
Net of Income Taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    315
    
    
    
    
    
    
    
    
    
    
    
    315Total Comprehensive Loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (121,962
    )BALANCE AT DECEMBER 31, 2009
    
    
    55,814,890
    
    
    
    (4,632,500
    )
    
    
    51,182,390
    
    
    $
    56
    
    
    $
    357,174
    
    
    $
    (302
    )
    
    $
    859
    
    
    $
    (138,031
    )
    
    $
    (70,012
    )
    
    $
    149,744
  87




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##### Table of Contents



HANMI FINANCIAL CORPORATION AND SUBSIDIARIES
 
 CONSOLIDATED STATEMENTS OF CASH FLOWS  (In Thousands)
 Year Ended December 31,2009
    
    
    2008
    
    
    2007CASH FLOWS FROM OPERATING ACTIVITIES:Net Loss
    
    $
    (122,277
    )
    
    $
    (102,093
    )
    
    $
    (60,762
    )Adjustments to Reconcile Net Loss to Net Cash Provided By Operating Activities:Depreciation and Amortization of Premises and Equipment
    
    
    2,610
    
    
    
    2,900
    
    
    
    2,953Amortization of Premiums and Accretion of Discounts on Investment Securities, Net
    
    
    (516
    )
    
    
    164
    
    
    
    218Amortization of Other Intangible Assets
    
    
    1,568
    
    
    
    1,958
    
    
    
    2,324Amortization of Servicing Assets
    
    
    823
    
    
    
    1,295
    
    
    
    2,046Share-Based Compensation Expense
    
    
    906
    
    
    
    1,036
    
    
    
    1,891Provision for Credit Losses
    
    
    196,387
    
    
    
    75,676
    
    
    
    38,323Federal Home Loan Bank and Federal Reserve Bank Stock Dividends
    
    
    
    
    
    
    (1,259
    )
    
    
    (708
    )Net Gain on Sales of Investment Securities
    
    
    (1,833
    )
    
    
    (77
    )
    
    
    Other-Than-Temporary Impairment Loss on Investment Securities
    
    
    
    
    
    
    2,410
    
    
    
    1,074Net Gain on Sales of Loans
    
    
    (1,220
    )
    
    
    (765
    )
    
    
    (5,452
    )(Gain) Loss on Sales of Other Real Estate Owned
    
    
    211
    
    
    
    324
    
    
    
    (226
    )Valuation Impairment on Other Real Estate Owned
    
    
    3,115
    
    
    
    
    
    
    
    Impairment Loss on Goodwill
    
    
    
    
    
    
    107,393
    
    
    
    102,891Excess Tax Benefit from Exercises of Stock Options
    
    
    
    
    
    
    
    
    
    
    (193
    )Deferred Tax Expense (Benefit)
    
    
    26,016
    
    
    
    (11,254
    )
    
    
    (14,618
    )Origination of Loans Held for Sale
    
    
    (1,711
    )
    
    
    (54,347
    )
    
    
    (108,639
    )Net Proceeds from Sales of Loans Held for Sale
    
    
    35,331
    
    
    
    24,037
    
    
    
    131,626Decrease (Increase) in Accrued Interest Receivable
    
    
    2,855
    
    
    
    5,064
    
    
    
    (492
    )Increase in Servicing Assets, Net
    
    
    (874
    )
    
    
    (750
    )
    
    
    (1,803
    )Increase in Cash Surrender Value of Bank-Owned Life Insurance
    
    
    (932
    )
    
    
    (951
    )
    
    
    (933
    )(Increase) Decrease in Other Assets
    
    
    4,000
    
    
    
    7,937
    
    
    
    2,875Increase in Income Taxes Receivable
    
    
    (44,842
    )
    
    
    (6,081
    )
    
    
    Increase (Decrease) in Accrued Interest Payable
    
    
    (5,933
    )
    
    
    (3,289
    )
    
    
    (754
    )Increase (Decrease) in Other Liabilities
    
    
    (1,428
    )
    
    
    (5,573
    )
    
    
    3,158Net Cash Provided By Operating Activities
    
    
    92,256
    
    
    
    43,755
    
    
    
    94,821CASH FLOWS FROM INVESTING ACTIVITIES:Proceeds from Matured Term Federal Funds Sold
    
    
    
    
    
    
    
    
    
    
    5,000Proceeds from Redemption of Federal Home Loan Bank and Federal Reserve Bank Stock
    
    
    2,350
    
    
    
    4,074
    
    
    
    Proceeds from Matured or Called Securities Available for Sale
    
    
    62,144
    
    
    
    147,320
    
    
    
    89,958Proceeds from Sales of Investment Securities Available for Sale
    
    
    93,685
    
    
    
    28,501
    
    
    
    Proceeds from Sales of Other Real Estate Owned
    
    
    4,917
    
    
    
    2,128
    
    
    
    1,306Net Decrease (Increase) in Loans Receivable
    
    
    354,328
    
    
    
    (95,286
    )
    
    
    (461,297
    )Purchases of Federal Home Loan Bank and Federal Reserve Bank Stock
    
    
    
    
    
    
    (10,261
    )
    
    
    (7,849
    )Purchases of Investment Securities Available for Sale
    
    
    (89,357
    )
    
    
    (24,580
    )
    
    
    (44,980
    )Purchases of Premises and Equipment
    
    
    (988
    )
    
    
    (2,379
    )
    
    
    (3,682
    )Business Acquisitions, Net of Cash Acquired
    
    
    
    
    
    
    
    
    
    
    (1,727
    )Net Cash Provided By (Used In) Investing Activities
    
    
    427,079
    
    
    
    49,517
    
    
    
    (423,271
    )CASH FLOWS FROM FINANCING ACTIVITIES:Increase (Decrease) in Deposits
    
    
    (320,753
    )
    
    
    68,381
    
    
    
    56,984Net Proceeds from Issuance of Common Stock in Private Offering
    
    
    6,839
    
    
    
    
    
    
    
    Proceeds from Exercises of Stock Options and Stock Warrants
    
    
    
    
    
    
    
    
    
    
    1,164Excess Tax Benefit from Exercises of Stock Options
    
    
    
    
    
    
    
    
    
    
    193Cash Paid to Acquire Treasury Stock
    
    
    
    
    
    
    
    
    
    
    (49,971
    )Cash Paid to Repurchase Stock Options and Stock Warrants
    
    
    
    
    
    
    (70
    )
    
    
    (2,552
    )Cash Dividends Paid
    
    
    
    
    
    
    (3,853
    )
    
    
    (11,574
    )Proceeds from Long-Term Federal Home Loan Bank Advances and Other Borrowings
    
    
    
    
    
    
    250,000
    
    
    
    Repayment of Long-Term Federal Home Loan Bank Advances and Other Borrowings
    
    
    (107,218
    )
    
    
    (468
    )
    
    
    (443
    )Net Change in Short-Term Federal Home Loan Bank Advances and Other Borrowings
    
    
    (160,040
    )
    
    
    (313,713
    )
    
    
    318,546Net Cash (Used In) Provided By Financing Activities
    
    
    (581,172
    )
    
    
    277
    
    
    
    312,347NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
    
    
    (61,837
    )
    
    
    93,549
    
    
    
    (16,103
    )Cash and Cash Equivalents at Beginning of Year
    
    
    215,947
    
    
    
    122,398
    
    
    
    138,501CASH AND CASH EQUIVALENTS AT END OF YEAR
    
    $
    154,110
    
    
    $
    215,947
    
    
    $
    122,398SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:Cash Paid During the Period for:Interest Paid
    
    $
    88,851
    
    
    $
    107,071
    
    
    $
    129,864Income Taxes Paid
    
    $
    
    
    
    $
    13,873
    
    
    $
    38,232Non-Cash Activities:Stock Issued for Business Acquisition
    
    $
    46
    
    
    $
    293
    
    
    $
    2,198Transfer of Loans to Other Real Estate Owned
    
    $
    38,726
    
    
    $
    2,988
    
    
    $
    1,367Loan Provided in the Sale of Other Real Estate Owned
    
    $
    5,000
    
    
    $
    
    
    
    $
    Transfer of Equity Securities from Other Assets to Securities Available for Sale
    
    $
    
    
    
    $
    511
    
    
    $
    
  88




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##### Table of Contents



HANMI FINANCIAL CORPORATION AND SUBSIDIARIES
 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 DECEMBER 31, 2009, 2008 AND 2007
 NOTE 1  REGULATORY MATTERS AND GOING CONCERN CONSIDERATION
   Written Agreement and Final Order
  89




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##### Table of Contents



HANMI FINANCIAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2009, 2008 AND 2007 (Continued)
 NOTE 1  REGULATORY MATTERS AND GOING CONCERN CONSIDERATION (Continued)
  Ratio of Tangible ShareholdersDate
    
    Equity to Total Tangible AssetsBy December 31, 2009
    
    Not Less Than 7.0 PercentBy July 31, 2010
    
    Not Less Than 9.0 PercentFrom December 31, 2010 and Until the Order is Terminated
    
    Not Less Than 9.5 Percent
   
    
    The Board Committees have been reorganized after a board assessment was conducted to
leverage the experience and skill base of our directors and improve board oversight of the Banks
operations.
    
    Tools such as master calendar of scheduled events and policy exception trigger tables have
been created to assist the Boards ability to monitor the Banks operations more effectively.
    
    Jung Hak Son, a 24 year member of the Bank has been appointed to the Chief Credit Officer
position and is currently awaiting approval from the regulatory agencies.
    
    Loan policies and procedures continue to be adjusted and enhanced to keep current with the
rapidly changing credit and economic environment.
    
    Allowance for loan loss quantitative and qualitative factors have been changed to reflect
the higher risk in the loan portfolio due to the recessionary economy.
    
    The credit department has also been reorganized and reinforced with additional personnel to
increase the level of management loan review and loan monitoring.
    
    Written plans have been developed for each problem loan greater than $3 Million and the
plans implemented and monitored to improve loan work out and loan collection.
    
    Banks strategic plan has been reviewed and revised, then approved by the Board of
Directors.
    
    Banks liquidity management plan and contingency funding plan have been significantly
revised to reflect the additional restrictions and challenges of the market.
    
    The capital plan has been revised and significant effort is being made to raise the required
capital within the time frame mandated by the Order.
    
    A Compliance Committee has been organized to monitor the progress toward full compliance
with all the provisions of the Agreement and the Order and approves the reports prior to submission
according to the schedule established.
 90




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##### Table of Contents



HANMI FINANCIAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2009, 2008 AND 2007 (Continued)
 NOTE 1  REGULATORY MATTERS AND GOING CONCERN CONSIDERATION (Continued)
  Going Concern
     91




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##### Table of Contents



HANMI FINANCIAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2009, 2008 AND 2007 (Continued)
 NOTE 2  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 Summary of Operations
    Basis of Presentation
   Principles of Consolidation
  92




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##### Table of Contents



HANMI FINANCIAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2009, 2008 AND 2007 (Continued)
 NOTE 2  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
 Use of Estimates in the Preparation of Financial Statements
  Reclassifications
  Liquidity Risk
 Risks and Uncertainties,
 Note 22  Liquidity.
 Cash and Cash Equivalents
  93




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##### Table of Contents



HANMI FINANCIAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2009, 2008 AND 2007 (Continued)
 NOTE 2  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
 Securities
  1.
    
    Securities that we have the positive intent and ability to hold to maturity are
classified as held-to-maturity and reported at amortized cost;2.
    
    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; and3.
    
    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
as a separate component of stockholders equity as accumulated other comprehensive income,
net of income taxes.
    94




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##### Table of Contents



HANMI FINANCIAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2009, 2008 AND 2007 (Continued)
 NOTE 2  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
  Loans Receivable
    Loans Held for Sale
  95




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##### Table of Contents



HANMI FINANCIAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2009, 2008 AND 2007 (Continued)
 NOTE 2  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
 Allowance for Loan Losses
      1.
    
    the present value of the expected future cash flows, discounted at the loans effective
interest rate; or2.
    
    the loans observable fair value; or3.
    
    the fair value of the collateral, if the loan is collateral-dependent.
 Interagency Policy Statement on the Allowance for Loan and Lease Losses
 96




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##### Table of Contents



HANMI FINANCIAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2009, 2008 AND 2007 (Continued)
 NOTE 2  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
 Premises and Equipment
  Buildings and Improvements
    
    10 to 30 yearsFurniture and Equipment
    
    3 to 7 YearsLeasehold Improvements
    
    Term of Lease or Useful Life, Whichever is ShorterSoftware
    
    3 Years
 Impairment of Long-Lived Assets
 Property,
Plant and Equipment.
 Other Real Estate Owned
  Servicing Assets
 Transfers and Servicing
   97




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##### Table of Contents



HANMI FINANCIAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2009, 2008 AND 2007 (Continued)
 NOTE 2  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
 Goodwill
 Intangibles-Goodwill and Other,
  Other Intangible Assets
   Federal Home Loan Bank Stock
  98




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##### Table of Contents



HANMI FINANCIAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2009, 2008 AND 2007 (Continued)
 NOTE 2  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
 Federal Reserve Bank Stock
  Derivative Instruments
 Derivatives and
Hedging  Overall.
     99




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##### Table of Contents



HANMI FINANCIAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2009, 2008 AND 2007 (Continued)
 NOTE 2  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
 Bank-Owned Life Insurance
  Affordable Housing Investments
  Junior Subordinated Debentures
  Consolidation of Variable Interest Entities (Revised December 2003)  an
Interpretation of ARB No. 51,
 Income Taxes
  100




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##### Table of Contents



HANMI FINANCIAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2009, 2008 AND 2007 (Continued)
 NOTE 2  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
 Share-Based Compensation
 Compensation-Stock Compensation, Accounting for Stock-Based Compensation. Accounting for Stock Issued to Employees,
 Transition
Election Related to Accounting for the Tax Effects of the Share-Based Payment Awards.
   Earnings (Loss) Per Share
  Treasury Stock
  Recently Issued Accounting Standards
 FASB ASC 105, Generally Accepted Accounting Principles
 101




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##### Table of Contents



HANMI FINANCIAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2009, 2008 AND 2007 (Continued)
 NOTE 2  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
 FASB ASC 810, Consolidations
 FASB ASC 860, Transfers and Servicing
 FASB ASC 855, Subsequent Events
 FASB ASU 2010-01, Equity (Topic 505), Accounting for Distributions to Shareholders with
Components of Stock and Cash
 102




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##### Table of Contents



HANMI FINANCIAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2009, 2008 AND 2007 (Continued)
 NOTE 2  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
 FASB ASU 2010-06, Fair Value Measurements and Disclosures (Topic 820)
 NOTE 3  FAIR VALUE MEASUREMENTS
 Fair Value Option and Fair Value Measurements
 Fair Value Measurements and Disclosures,
 Financial Instruments, Note 4  Investment Securities.
  Investment Securities Available for Sale
 Loans Held for Sale
 103




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##### Table of Contents



HANMI FINANCIAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2009, 2008 AND 2007 (Continued)
 NOTE 3  FAIR VALUE MEASUREMENTS (Continued)
 Impaired Loans Receivables,
 Other Real Estate Owned
 Servicing Assets and Servicing Liabilities
 Other Intangible Assets
 Investments  Debt and Equity Securities,
 104




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##### Table of Contents



HANMI FINANCIAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2009, 2008 AND 2007 (Continued)
 NOTE 3  FAIR VALUE MEASUREMENTS (Continued)
 Fair Value Measurement
  
    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.
 Assets and Liabilities Measured at Fair Value on a Recurring Basis
  Level 1
    
    
    Level 2
    
    
    Level 3SignificantObservableInputs WithQuoted Prices in
    
    
    No ActiveActive Markets
    
    
    Market With
    
    
    Significant
    
    
    Balance as offor Identical
    
    
    Identical
    
    
    Unobservable
    
    
    December 31,Assets
    
    
    Characteristics
    
    
    Inputs
    
    
    2009(In Thousands)ASSETS:Securities Available for Sale:Mortgage-Backed Securities
    
    $
    
    
    
    $
    66,332
    
    
    $
    
    
    
    $
    66,332U.S. Government Agency Securities
    
    
    32,763
    
    
    
    
    
    
    
    
    
    
    
    32,763Collateralized Mortgage Obligations
    
    
    
    
    
    
    12,789
    
    
    
    
    
    
    
    12,789Asset-Backed Securities
    
    
    
    
    
    
    8,188
    
    
    
    
    
    
    
    8,188Other Securities
    
    
    
    
    
    
    2,937
    
    
    
    1,258
    
    
    
    4,195Municipal Bonds
    
    
    
    
    
    
    7,359
    
    
    
    
    
    
    
    7,359Equity Securities
    
    
    794
    
    
    
    
    
    
    
    
    
    
    
    794Total Securities Available for Sale
    
    $
    33,557
    
    
    $
    97,605
    
    
    $
    1,258
    
    
    $
    132,420Servicing Assets
    
    $
    
    
    
    $
    
    
    
    $
    3,842
    
    
    $
    3,842LIABILITIES:Servicing Liabilities
    
    $
    
    
    
    $
    
    
    
    $
    216
    
    
    $
    216
 105




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##### Table of Contents



HANMI FINANCIAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2009, 2008 AND 2007 (Continued)
 NOTE 3  FAIR VALUE MEASUREMENTS (Continued)
  Fair Value Measurements Using Significant Unobservable Inputs (Level 3)Realized andUnrealizedBeginning
    
    
    
    
    
    Realized and
    
    Gains or Losses
    
    
    
    
    
    EndingBalance as of
    
    Purchases,
    
    Unrealized
    
    in Other
    
    Transfers
    
    Balance as ofJanuary 1,
    
    Issuances and
    
    Gains or Losses
    
    Comprehensive
    
    In and/or Out
    
    December 31,2009
    
    Settlements
    
    in Earnings
    
    Income
    
    of Level 3
    
    2009(In Thousands)ASSETS:Investment
Securities Available
for Sale:Other Securities
    
    $
    1,311
    
    
    $
    
    
    
    $
    
    
    
    $
    (53
    )
    
    $
    
    
    
    $
    1,258Servicing Assets
    
    $
    3,791
    
    
    $
    874
    
    
    $
    (823
    )
    
    $
    
    
    
    $
    
    
    
    $
    3,842LIABILITIES:Servicing Liabilities
    
    $
    (238
    )
    
    $
    
    
    
    $
    22
    
    
    $
    
    
    
    $
    
    
    
    $
    216
 Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis
  Level 1
    
    Level 2
    
    Level 3SignificantObservableInputs WithQuoted Prices in
    
    No ActiveActive Markets
    
    Market With
    
    Significant
    
    Balance as offor Identical
    
    Identical
    
    Unobservable
    
    December 31,Assets
    
    Characteristics
    
    Inputs
    
    2009(In Thousands)ASSETS:Loans Held for Sale
    
    $
    
    
    
    $
    5,010
    
    
    $
    
    
    
    $
    5,010Impaired Loans
    
    $
    
    
    
    $
    163,529
    
    
    $
    16,519
    
    
    $
    180,048Other Real Estate Owned
    
    $
    
    
    
    $
    26,306
    
    
    $
    
    
    
    $
    26,306Other Intangible Assets
    
    $
    
    
    
    $
    3,382
    
    
    $
    
    
    
    $
    3,382
   106




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##### Table of Contents



HANMI FINANCIAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2009, 2008 AND 2007 (Continued)
 NOTE 3  FAIR VALUE MEASUREMENTS (Continued)
  December 31, 2009
    
    
    December 31, 2008Carrying
    
    
    Estimated
    
    
    Carrying
    
    
    Estimatedor Contract
    
    
    Fair
    
    
    or Contract
    
    
    FairAmount
    
    
    Value
    
    
    Amount
    
    
    Value(In Thousands)Financial Assets:Cash and Cash Equivalents
    
    $
    154,110
    
    
    $
    154,110
    
    
    $
    215,947
    
    
    $
    215,947Investment Securities Held to Maturity
    
    
    869
    
    
    
    871
    
    
    
    910
    
    
    
    910Investment Securities Available for Sale
    
    
    132,420
    
    
    
    132,420
    
    
    
    196,207
    
    
    
    196,207Loans Receivable, Net of Allowance for Loan Losses
    
    
    2,674,064
    
    
    
    2,573,080
    
    
    
    3,251,311
    
    
    
    3,246,955Accrued Interest Receivable
    
    
    9,492
    
    
    
    9,492
    
    
    
    12,347
    
    
    
    12,347Investment in Federal Home Loan Bank Stock
    
    
    30,697
    
    
    
    30,697
    
    
    
    30,697
    
    
    
    30,697Investment in Federal Reserve Bank Stock
    
    
    7,878
    
    
    
    7,878
    
    
    
    10,228
    
    
    
    10,228Financial Liabilities:Noninterest-Bearing Deposits
    
    
    556,306
    
    
    
    556,306
    
    
    
    536,944
    
    
    
    536,944Interest-Bearing Deposits
    
    
    2,193,022
    
    
    
    2,197,866
    
    
    
    2,533,136
    
    
    
    2,538,394Borrowings
    
    
    236,453
    
    
    
    237,354
    
    
    
    505,389
    
    
    
    506,429Accrued Interest Payable
    
    
    12,606
    
    
    
    12,606
    
    
    
    18,539
    
    
    
    18,539Off-Balance Sheet Items:Commitments to Extend Credit
    
    
    262,821
    
    
    
    177
    
    
    
    386,785
    
    
    
    384Standby Letters of Credit
    
    
    17,225
    
    
    
    37
    
    
    
    47,289
    
    
    
    194
  Cash and Cash Equivalents
 Investment Securities
 Loans Receivable, Net of Allowance for Loan Losses
 Accrued Interest Receivable
 Investment in Federal Home Loan Bank and Federal Reserve Bank Stock
 Noninterest-Bearing Deposits
 107




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##### Table of Contents



HANMI FINANCIAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2009, 2008 AND 2007 (Continued)
 NOTE 3  FAIR VALUE MEASUREMENTS (Continued)
 Interest-Bearing Deposits
 Borrowings
 Accrued Interest Payable
 Commitments to Extend Credit and Standby Letters of Credit
 NOTE 4  INVESTMENT SECURITIES
  Gross
    
    
    Gross
    
    
    EstimatedAmortized
    
    
    Unrealized
    
    
    Unrealized
    
    
    FairCost
    
    
    Gain
    
    
    Loss
    
    
    Value(In Thousands)December 31, 2009:Municipal Bonds
    
    $
    696
    
    
    $
    
    
    
    $
    
    
    
    $
    696Mortgage-Backed Securities (1)
    
    
    173
    
    
    
    2
    
    
    
    
    
    
    
    175$
    869
    
    
    $
    2
    
    
    $
    
    
    
    $
    871December 31, 2008:Municipal Bonds
    
    $
    695
    
    
    $
    
    
    
    $
    
    
    
    $
    695Mortgage-Backed Securities (1)
    
    
    215
    
    
    
    
    
    
    
    
    
    
    
    215$
    910
    
    
    $
    
    
    
    $
    
    
    
    $
    910
 
 (1)
    
    Collateralized by residential mortgages and guaranteed by U.S. government
sponsored entities. 108




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##### Table of Contents



HANMI FINANCIAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2009, 2008 AND 2007 (Continued)
 NOTE 4  INVESTMENT SECURITIES (Continued)
  Gross
    
    
    Gross
    
    
    EstimatedAmortized
    
    
    Unrealized
    
    
    Unrealized
    
    
    FairCost
    
    
    Gain
    
    
    Loss
    
    
    Value(In Thousands)December 31, 2009:Mortgage-Backed Securities (1)
    
    $
    65,218
    
    
    $
    1,258
    
    
    $
    144
    
    
    $
    66,332U.S. Government Agency Securities
    
    
    33,325
    
    
    
    
    
    
    
    562
    
    
    
    32,763Collateralized Mortgage Obligations (2)
    
    
    12,520
    
    
    
    269
    
    
    
    
    
    
    
    12,789Asset-Backed Securities
    
    
    8,127
    
    
    
    61
    
    
    
    
    
    
    
    8,188Municipal Bonds
    
    
    7,369
    
    
    
    82
    
    
    
    92
    
    
    
    7,359Other Securities
    
    
    3,925
    
    
    
    332
    
    
    
    62
    
    
    
    4,195Equity Securities
    
    
    511
    
    
    
    283
    
    
    
    
    
    
    
    794$
    130,995
    
    
    $
    2,285
    
    
    $
    860
    
    
    $
    132,420December 31, 2008:Mortgage-Backed Securities (1)
    
    $
    77,515
    
    
    $
    1,536
    
    
    $
    191
    
    
    $
    78,860U.S. Government Agency Securities
    
    
    17,580
    
    
    
    120
    
    
    
    
    
    
    
    17,700Collateralized Mortgage Obligations (2)
    
    
    36,204
    
    
    
    137
    
    
    
    179
    
    
    
    36,162Municipal Bonds
    
    
    58,987
    
    
    
    413
    
    
    
    1,087
    
    
    
    58,313Other Securities
    
    
    3,925
    
    
    
    386
    
    
    
    112
    
    
    
    4,199Equity Securities
    
    
    511
    
    
    
    293
    
    
    
    
    
    
    
    804Corporate Bonds (3)
    
    
    355
    
    
    
    
    
    
    
    186
    
    
    
    169$
    195,077
    
    
    $
    2,885
    
    
    $
    1,755
    
    
    $
    196,207
 
 (1)
    
    Collateralized by residential mortgages and guaranteed by U.S. government
sponsored entities.(2)
    
    Collateralized by residential mortgages and guaranteed by U.S. government sponsored
entities, except for two private-label securities held as of December 31, 2008 with an
unrealized loss totaling $42,000. The two private-label securities were sold during the year
ended December 31, 2009.(3)
    
    Balances presented for amortized cost, representing one corporate bond, were net of
an OTTI charge of $2.4 million, which was related to a credit loss, as of December 31, 2008.
Therefore, the adoption of FASB ASC 320 did not require a reclassification for the non-credit
portion of previously recognized OTTI from the opening balance of retained earnings to other
comprehensive income as of March 31, 2009. The corporate bond was sold in the fourth quarter
of 2009 for a realized gain of $83,000.  Available for Sale
    
    
    Held to MaturityAmortized
    
    
    Estimated
    
    
    Amortized
    
    
    EstimatedCost
    
    
    Fair Value
    
    
    Cost
    
    
    Fair Value(In Thousands)Within One Year
    
    $
    3,925
    
    
    $
    4,195
    
    
    $
    
    
    
    $
    Over One Year Through Five Years
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Over Five Years Through Ten Years
    
    
    18,308
    
    
    
    18,096
    
    
    
    696
    
    
    
    696Over Ten Years
    
    
    30,513
    
    
    
    30,214
    
    
    
    
    
    
    
    Mortgage-Backed Securities
    
    
    65,218
    
    
    
    66,332
    
    
    
    173
    
    
    
    175Collateralized Mortgage Obligations
    
    
    12,520
    
    
    
    12,789
    
    
    
    
    
    
    
    Equity Securities
    
    
    511
    
    
    
    794
    
    
    
    
    
    
    
    $
    130,995
    
    
    $
    132,420
    
    
    $
    869
    
    
    $
    871
 109




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##### Table of Contents



HANMI FINANCIAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2009, 2008 AND 2007 (Continued)
 NOTE 4  INVESTMENT SECURITIES (Continued)
  Holding PeriodLess than 12 Months
    
    
    
    

    12 Months or More
    
    
    

    
    TotalGross
    
    
    Estimated
    
    
    Number
    
    
    Gross
    
    
    Estimated
    
    
    Number
    
    
    Gross
    
    
    Estimated
    
    
    NumberInvestment Securities
    
    Unrealized
    
    
    Fair
    
    
    of
    
    
    Unrealized
    
    
    Fair
    
    
    of
    
    
    Unrealized
    
    
    Fair
    
    
    ofAvailable for Sale
    
    Losses
    
    
    Value
    
    
    Securities
    
    
    Losses
    
    
    Value
    
    
    Securities
    
    
    Losses
    
    
    Value
    
    
    Securities(In Thousands)December 31, 2009:Mortgage-Backed Securities
    
    $
    144
    
    
    $
    14,584
    
    
    
    3
    
    
    $
    
    
    
    $
    
    
    
    
    
    
    
    $
    144
    
    
    $
    14,584
    
    
    
    3Municipal Bonds
    
    
    12
    
    
    
    303
    
    
    
    1
    
    
    
    80
    
    
    
    793
    
    
    
    1
    
    
    
    92
    
    
    
    1,096
    
    
    
    2U.S. Government Agency
Securities
    
    
    562
    
    
    
    32,764
    
    
    
    6
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    562
    
    
    
    32,764
    
    
    
    6Other Securities
    
    
    24
    
    
    
    1,976
    
    
    
    2
    
    
    
    39
    
    
    
    961
    
    
    
    1
    
    
    
    63
    
    
    
    2,937
    
    
    
    3$
    742
    
    
    $
    49,627
    
    
    
    12
    
    
    $
    119
    
    
    $
    1,754
    
    
    
    2
    
    
    $
    861
    
    
    $
    51,381
    
    
    
    14December 31, 2008:Mortgage-Backed Securities
    
    $
    158
    
    
    $
    10,631
    
    
    
    42
    
    
    $
    33
    
    
    $
    5,277
    
    
    
    4
    
    
    $
    191
    
    
    $
    15,908
    
    
    
    46Municipal Bonds
    
    
    968
    
    
    
    35,614
    
    
    
    66
    
    
    
    119
    
    
    
    1,749
    
    
    
    4
    
    
    
    1,087
    
    
    
    37,363
    
    
    
    70Collateralized Mortgage
Obligations
    
    
    36
    
    
    
    4,569
    
    
    
    4
    
    
    
    143
    
    
    
    5,903
    
    
    
    4
    
    
    
    179
    
    
    
    10,472
    
    
    
    8Other Securities
    
    
    72
    
    
    
    929
    
    
    
    1
    
    
    
    40
    
    
    
    1,960
    
    
    
    2
    
    
    
    112
    
    
    
    2,889
    
    
    
    3Corporate Bonds
    
    
    186
    
    
    
    169
    
    
    
    1
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    186
    
    
    
    169
    
    
    
    1$
    1,420
    
    
    $
    51,912
    
    
    
    114
    
    
    $
    335
    
    
    $
    14,889
    
    
    
    14
    
    
    $
    1,755
    
    
    $
    66,801
    
    
    
    128
   110




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HANMI FINANCIAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2009, 2008 AND 2007 (Continued)
 NOTE 4  INVESTMENT SECURITIES (Continued)
  Year Ended December 31,2009
    
    
    2008
    
    
    2007(In Thousands)Gross Realized Gains on Sales of Investment Securities
    
    $
    2,327
    
    
    $
    618
    
    
    $
    Gross Realized Losses on Sales of Investment Securities
    
    
    (494
    )
    
    
    (541
    )
    
    
    Net Realized Gains on Sales of Investment Securities
    
    $
    1,833
    
    
    $
    77
    
    
    $
    Proceeds from Sales of Investment Securities
    
    $
    93,685
    
    
    $
    28,501
    
    
    $
    Tax Expense on Sales of Investment Securities
    
    $
    771
    
    
    $
    32
    
    
    $
    
   111




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##### Table of Contents



HANMI FINANCIAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2009, 2008 AND 2007 (Continued)
 NOTE 5  LOANS
 Loans Receivable
  December 31,2009
    
    
    2008(In Thousands)Real Estate Loans:Commercial Property
    
    $
    839,598
    
    
    $
    908,970Construction
    
    
    126,350
    
    
    
    178,783Residential Property
    
    
    77,149
    
    
    
    92,361Total Real Estate Loans
    
    
    1,043,097
    
    
    
    1,180,114Commercial and Industrial Loans:Commercial Term Loans
    
    
    1,420,034
    
    
    
    1,611,449Commercial Lines of Credit
    
    
    101,159
    
    
    
    214,699SBA Loans
    
    
    134,521
    
    
    
    140,989International Loans
    
    
    53,488
    
    
    
    95,185Total Commercial and Industrial Loans
    
    
    1,709,202
    
    
    
    2,062,322Consumer Loans
    
    
    63,303
    
    
    
    83,525Total Gross Loans
    
    
    2,815,602
    
    
    
    3,325,961Allowance for Loans Losses
    
    
    (144,996
    )
    
    
    (70,986
    )Deferred Loan Fees
    
    
    (1,552
    )
    
    
    (1,260
    )Loans Receivable, Net
    
    $
    2,669,054
    
    
    $
    3,253,715
  Allowance for Loan Losses and Allowance for Off-Balance Sheet Items
  As of and for the Year Ended December 31,2009
    
    
    2008
    
    
    2007Allowance
    
    
    
    
    
    
    Allowance
    
    
    
    
    
    
    Allowancefor Off-
    
    
    
    
    
    
    for Off-
    
    
    
    
    
    
    for Off-Allowance
    
    
    Balance
    
    
    Allowance
    
    
    Balance
    
    
    Allowance
    
    
    Balancefor Loan
    
    
    Sheet
    
    
    for Loan
    
    
    Sheet
    
    
    for Loan
    
    
    SheetLosses
    
    
    Items
    
    
    Losses
    
    
    Items
    
    
    Losses
    
    
    Items(In Thousands)Balance at Beginning of Year
    
    $
    70,986
    
    
    $
    4,096
    
    
    $
    43,611
    
    
    $
    1,765
    
    
    $
    27,557
    
    
    $
    2,130Provision Charged to Operating Expense
    
    
    196,607
    
    
    
    (220
    )
    
    
    73,345
    
    
    
    2,331
    
    
    
    38,688
    
    
    
    (365
    )Loans Charged Off
    
    
    (125,380
    )
    
    
    
    
    
    
    (48,152
    )
    
    
    
    
    
    
    (23,330
    )
    
    
    Recoveries
    
    
    2,783
    
    
    
    
    
    
    
    2,182
    
    
    
    
    
    
    
    696
    
    
    
    Balance at End of Year
    
    $
    144,996
    
    
    $
    3,876
    
    
    $
    70,986
    
    
    $
    4,096
    
    
    $
    43,611
    
    
    $
    1,765
 112




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##### Table of Contents



HANMI FINANCIAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2009, 2008 AND 2007 (Continued)
 NOTE 5  LOANS (Continued)
 Impaired Loans
  As of and for theYear Ended December 31,2009
    
    
    2008
    
    
    2007(In Thousands)Recorded Investment With Related Allowance
    
    $
    91,371
    
    
    $
    71,448
    
    
    $
    38,930Recorded Investment With No Related Allowance
    
    
    109,363
    
    
    
    49,945
    
    
    
    15,202Allowance on Impaired Loans
    
    
    (23,148
    )
    
    
    (18,157
    )
    
    
    (11,829
    )Net Recorded Investment in Impaired Loans
    
    $
    177,586
    
    
    $
    103,236
    
    
    $
    42,303Average Total Recorded Investment in Impaired Loans
    
    $
    281,980
    
    
    $
    149,680
    
    
    $
    61,249
  Year Ended December 31,2009
    
    
    2008
    
    
    2007(In Thousands)Interest Income That Would Have Been Recognized Had Impaired
Loans Performed in Accordance With Their Original Terms
    
    $
    17,471
    
    
    $
    7,327
    
    
    $
    4,672Less: Interest Income Recognized on Impaired Loans on a Cash Basis
    
    
    (9,569
    )
    
    
    (5,422
    )
    
    
    (3,705
    )Interest Foregone on Impaired Loans
    
    $
    7,902
    
    
    $
    1,905
    
    
    $
    967
  Non-Performing Assets
  December 31,2009
    
    
    2008(In Thousands)Non-Accrual Loans
    
    $
    219,000
    
    
    $
    120,823Loans 90 Days or More Past Due and Still Accruing
    
    
    67
    
    
    
    1,075Total Non-Performing Loans
    
    
    219,067
    
    
    
    121,898Other Real Estate Owned
    
    
    26,306
    
    
    
    823Total Non-Performing Assets
    
    $
    245,373
    
    
    $
    122,721
  113




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##### Table of Contents



HANMI FINANCIAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2009, 2008 AND 2007 (Continued)
 NOTE 5  LOANS (Continued)
    Troubled Debt Restructured Loans
  Servicing Assets
  December 31,2009
    
    
    2008(In Thousands)Balance at Beginning of Year
    
    $
    3,791
    
    
    $
    4,336Additions
    
    
    874
    
    
    
    405Changes in Valuation Allowance
    
    
    
    
    
    
    345Amortization
    
    
    (823
    )
    
    
    (1,295
    )Balance at End of Year
    
    $
    3,842
    
    
    $
    3,791
  114




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##### Table of Contents



HANMI FINANCIAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2009, 2008 AND 2007 (Continued)
 NOTE 6  PREMISES AND EQUIPMENT
  December 31,2009
    
    
    2008(In Thousands)Land
    
    $
    6,120
    
    
    $
    6,120Buildings and Improvements
    
    
    9,035
    
    
    
    8,790Furniture and Equipment
    
    
    14,468
    
    
    
    14,528Leasehold Improvements
    
    
    11,240
    
    
    
    10,956Software
    
    
    862
    
    
    
    86241,725
    
    
    
    41,256Accumulated Depreciation and Amortization
    
    
    (23,068
    )
    
    
    (20,977
    )Total Premises and Equipment, Net
    
    $
    18,657
    
    
    $
    20,279
  NOTE 7  GOODWILL
  As of and for theYear EndedDecember 31,2009
    

    2008(In Thousands)Balance at Beginning of Year
    
    $
    

    $
    107,100Acquired Goodwill
    
    
    

    
    293Impairment Loss on Goodwill
    
    
    

    
    (107,393
    )Balance at End of Year
    
    $
    

    $
    
 Impairment Loss on Goodwill
  115




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##### Table of Contents



HANMI FINANCIAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2009, 2008 AND 2007 (Continued)
 NOTE 8  OTHER INTANGIBLE ASSETS
  December 31, 2009
    
    
    December 31, 2008Gross
    
    
    
    
    
    
    Net
    
    
    Gross
    
    
    
    
    
    
    NetAmortization
    
    
    Carrying
    
    
    Accumulated
    
    
    Carrying
    
    
    Carrying
    
    
    Accumulated
    
    
    CarryingPeriod
    
    
    Amount
    
    
    Amortization
    
    
    Amount
    
    
    Amount
    
    
    Amortization
    
    
    Amount(In Thousands)Other Intangible Assets:Core Deposit Intangible
    
    8 years
    
    $
    13,137
    
    
    $
    (11,822
    )
    
    $
    1,315
    
    
    $
    13,137
    
    
    $
    (10,538
    )
    
    $
    2,599Trade Names
    
    20 years
    
    
    970
    
    
    
    (146
    )
    
    
    824
    
    
    
    970
    
    
    
    (97
    )
    
    
    873Client/Insured Relationships
    
    10 years
    
    
    770
    
    
    
    (231
    )
    
    
    539
    
    
    
    770
    
    
    
    (154
    )
    
    
    616Non-Compete Agreements
    
    5 years
    
    
    600
    
    
    
    (360
    )
    
    
    240
    
    
    
    600
    
    
    
    (240
    )
    
    
    360Carrier Relationships
    
    15 years
    
    
    580
    
    
    
    (116
    )
    
    
    464
    
    
    
    580
    
    
    
    (78
    )
    
    
    502Total Other Intangible Assets
    
    
    
    
    
    $
    16,057
    
    
    $
    (12,675
    )
    
    $
    3,382
    
    
    $
    16,057
    
    
    $
    (11,107
    )
    
    $
    4,950
   Year EndingDecember 31,
    
    Amount(In Thousands)2010
    
    $
    1,1492011
    
    $
    7002012
    
    $
    1982013
    
    $
    1652014
    
    $
    164
  NOTE 9  DEPOSITS
  TimeDeposits
    
    
    OtherYear Ending
    
    of $100,000
    
    
    TimeDecember 31,
    
    or More
    
    
    Deposits
    
    
    Total(In Thousands)2010
    
    $
    812,085
    
    
    $
    577,898
    
    
    $
    1,389,9832011
    
    
    4,434
    
    
    
    1,420
    
    
    
    5,8542012
    
    
    
    
    
    
    120
    
    
    
    1202013
    
    
    
    
    
    
    
    
    
    
    2014
    
    
    
    
    
    
    29
    
    
    
    29Thereafter
    
    
    
    
    
    
    5
    
    
    
    5Total
    
    $
    816,519
    
    
    $
    579,472
    
    
    $
    1,395,991
 116




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##### Table of Contents



HANMI FINANCIAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2009, 2008 AND 2007 (Continued)
 NOTE 9  DEPOSITS (Continued)
  Year Ended December 31,2009
    
    
    2008
    
    
    2007(In Thousands)Savings
    
    $
    2,328
    
    
    $
    2,093
    
    
    $
    2,004Money Market Checking and NOW Accounts
    
    
    9,786
    
    
    
    19,909
    
    
    
    15,446Time Deposits of $100,000 or More
    
    
    34,807
    
    
    
    43,598
    
    
    
    75,516Other Time Deposits
    
    
    29,325
    
    
    
    18,753
    
    
    
    15,551Total Interest Expense on Deposits
    
    $
    76,246
    
    
    $
    84,353
    
    
    $
    108,517
   NOTE 10  FHLB ADVANCES AND OTHER BORROWINGS
  December 31,2009
    
    
    2008(In Thousands)FHLB Advances
    
    $
    153,978
    
    
    $
    422,196Note Issued to U.S. Treasury
    
    
    1,747
    
    
    
    787Total FHLB Advances and Other Borrowings
    
    $
    155,725
    
    
    $
    422,983
  December 31, 2009
    
    
    December 31, 2008Weighted-
    
    
    
    
    
    
    Weighted-Average
    
    
    
    
    
    
    AverageYear of
    
    
    
    
    
    Interest
    
    
    
    
    
    
    InterestMaturity
    
    Amount
    
    
    Rate
    
    
    Amount
    
    
    Rate(Dollars in Thousands)2009
    
    $
    
    
    
    
    
    
    
    $
    161,000
    
    
    
    1.71
    %2010
    
    
    
    
    
    
    
    
    
    
    6,908
    
    
    
    4.44
    %2011
    
    
    150,000
    
    
    
    0.76
    %
    
    
    150,000
    
    
    
    0.76
    %2012
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2013
    
    
    
    
    
    
    
    
    
    
    100,000
    
    
    
    0.67
    %2014
    
    
    3,978
    
    
    
    5.27
    %
    
    
    4,288
    
    
    
    5.27
    %$
    153,978
    
    
    
    0.88
    %
    
    $
    422,196
    
    
    
    1.21
    %
 117




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##### Table of Contents



HANMI FINANCIAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2009, 2008 AND 2007 (Continued)
 NOTE 10  FHLB ADVANCES AND OTHER BORROWINGS (Continued)
  Year Ended December 31,2009
    
    2008
    
    2007(Dollars in Thousands)Weighted-Average Interest Rate at End of Year
    
    
    0.88
    %
    
    
    1.21
    %
    
    
    4.73
    %Weighted-Average Interest Rate During the Year
    
    
    1.32
    %
    
    
    2.81
    %
    
    
    5.11
    %Average Balance of FHLB Advances
    
    $
    257,529
    
    
    $
    498,875
    
    
    $
    237,733Maximum Amount Outstanding at Any Month-End
    
    $
    411,156
    
    
    $
    597,472
    
    
    $
    432,664
    118




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##### Table of Contents



HANMI FINANCIAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2009, 2008 AND 2007 (Continued)
 NOTE 11  JUNIOR SUBORDINATED DEBENTURES
  Trust
    
    
    Interest
    
    
    
    
    
    
    
    
    
    JuniorPreferred
    
    
    Rate as of
    
    
    
    
    
    
    
    
    
    Subordinated
    
    
    FinalSecurities
    
    
    December 31,
    
    Fixed/
    
    
    Interest Rate
    
    
    Debt Owed
    
    
    MaturityDescription
    

Issuance (1)
    
    
    Outstanding
    
    
    2009
    
    Adjustable
    
    
    Basis
    
    

to Trusts (2)
    
    
    DateHanmi Capital
Trust I
    
    
    1/8/2004
    
    
    $
    30,000
    
    
    
    3.15
    %
    
    Adjustable quarterly
    
    3 month LIBOR + 2.90%
    
    $
    30,928
    
    
    
    1/15/2034Hanmi Capital Trust
II
    
    
    3/15/2004
    
    
    $
    30,000
    
    
    
    3.15
    %
    
    Adjustable quarterly
    
    3 month LIBOR + 2.90%
    
    $
    30,928
    
    
    
    3/15/2034Hanmi Capital Trust
III
    
    
    4/28/2004
    
    
    $
    20,000
    
    
    
    2.91
    %
    
    Adjustable quarterly
    
    3 month LIBOR + 2.63%
    
    $
    20,619
    
    
    
    4/30/2034
 
 (1)
    
    Each issue of junior subordinated debentures may be redeemed
in whole or in part by us after five years from the first
interest payment date.(2)
    
    Junior subordinated debt includes the funding cost of $69,000    119




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##### Table of Contents



HANMI FINANCIAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2009, 2008 AND 2007 (Continued)
 NOTE 11  JUNIOR SUBORDINATED DEBENTURES (Continued)
    NOTE 12  INCOME TAXES
 Income Taxes.
   December 31,
    
    
    December 31,2009
    
    
    2008(In Thousands)Unrecognized Tax Benefits at Beginning of Year
    
    $
    1,437
    
    
    $
    1,032Gross Increases for Tax Positions of Prior Years
    
    
    589
    
    
    
    960Gross Decreases for Tax Positions of Prior Years
    
    
    (167
    )
    
    
    Increases in Tax Positions for Current Year
    
    
    80
    
    
    
    131Settlements
    
    
    
    
    
    
    Lapse in Statute of Limitations
    
    
    (120
    )
    
    
    (686
    )Unrecognized Tax Benefits at End of Year
    
    $
    1,819
    
    
    $
    1,437
 120




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##### Table of Contents



HANMI FINANCIAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2009, 2008 AND 2007 (Continued)
 NOTE 12  INCOME TAXES (Continued)
      Year Ended December 31,2009
    
    
    2008
    
    
    2007(In Thousands)Current Expense:Federal
    
    $
    (56,829
    )
    
    $
    7,020
    
    
    $
    30,074State
    
    
    (312
    )
    
    
    2,879
    
    
    
    8,846(57,141
    )
    
    
    9,899
    
    
    
    38,920Deferred Expense:Federal
    
    
    18,343
    
    
    
    (7,590
    )
    
    
    (10,791
    )State
    
    
    7,673
    
    
    
    (3,664
    )
    
    
    (3,827
    )26,016
    
    
    
    (11,254
    )
    
    
    (14,618
    )Provision (Benefit) for Income Taxes
    
    $
    (31,125
    )
    
    $
    (1,355
    )
    
    $
    24,302
 121




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##### Table of Contents



HANMI FINANCIAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2009, 2008 AND 2007 (Continued)
 NOTE 12  INCOME TAXES (Continued)
  December 31,2009
    
    
    2008(In Thousands)Deferred Tax Assets:Credit Loss Provision
    
    $
    64,254
    
    
    $
    35,792Depreciation
    
    
    1,618
    
    
    
    2,170NOL
    
    
    17,758
    
    
    
    Tax Credit
    
    
    587
    
    
    
    564Other
    
    
    3,844
    
    
    
    398Total Deferred Tax Assets
    
    
    88,061
    
    
    
    38,924Deferred Tax Liabilities:Mark to Market
    
    
    (32,287
    )
    
    
    (1,374
    )Purchase Accounting
    
    
    (4,260
    )
    
    
    (4,559
    )Unrealized Gain on Securities Available for Sale, Interest-Only
Strips and Interest Rate Swaps
    
    
    (602
    )
    
    
    (471
    )State Taxes
    
    
    (53
    )
    
    
    (2,337
    )Other
    
    
    (2,017
    )
    
    
    (727
    )Total Deferred Tax Liabilities
    
    
    (39,219
    )
    
    
    (9,468
    )Valuation Allowance
    
    
    (45,234
    )
    
    
    Net Deferred Tax Assets
    
    $
    3,608
    
    
    $
    29,456
   Year Ended December 31,2009
    
    
    2008
    
    
    2007Federal Statutory Income Tax Rate
    
    
    35.0
    %
    
    
    35.0
    %
    
    
    (35.0
    %)State Taxes, Net of Federal Tax Benefits
    
    
    (3.4
    %)
    
    
    0.5
    %
    
    
    9.1
    %Tax-Exempt Municipal Securities
    
    
    0.5
    %
    
    
    0.9
    %
    
    
    (3.0
    %)Other
    
    
    1.0
    %
    
    
    1.2
    %
    
    
    (4.3
    %)Valuation Allowance
    
    
    (12.8
    %)
    
    
    
    
    
    
    Impairment Loss on Goodwill
    
    
    
    
    
    
    (36.3
    %)
    
    
    99.9
    %Effective Tax Rate
    
    
    20.3
    %
    
    
    1.3
    %
    
    
    66.7
    %
  122




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##### Table of Contents



HANMI FINANCIAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2009, 2008 AND 2007 (Continued)
 NOTE 13  SHARE-BASED COMPENSATION
    Year Ended December 31,2009
    
    2008
    
    2007Share-Based Compensation Expense
    
    $
    906
    
    
    $
    1,036
    
    
    $
    1,891Related Tax Benefits
    
    $
    381
    
    
    $
    436
    
    
    $
    795
  Unrecognized
    
    
    Average ExpectedExpense
    
    
    Recognition Period(Dollars in Thousands)Stock Option Awards
    
    $
    1,025
    
    
    1.8 yearsRestricted Stock Awards
    
    
    302
    
    
    4.0 yearsTotal Unrecognized Share-Based Compensation Expense
    
    $
    1,327
    
    
    2.3 years
 2007 Equity Compensation Plan
 Stock Options
   Year Ended December 31,2009
    
    2008
    
    2007Weighted-Average Estimated Fair Value Per Share of Options Granted
    
    $
    0.64
    
    
    $
    1.54
    
    
    $
    4.49
 123




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##### Table of Contents



HANMI FINANCIAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2009, 2008 AND 2007 (Continued)
 NOTE 13  SHARE-BASED COMPENSATION (Continued)
  Year Ended December 31,2009
    
    2008
    
    2007Weighted-Average Assumptions:Dividend Yield
    
    
    0.00
    %
    
    
    1.78
    %
    
    
    1.68
    %Expected Volatility
    
    
    51.28
    %
    
    
    35.89
    %
    
    
    29.98
    %Expected Term
    
    5.0 years
    
    3.1 years
    
    4.9 yearsRisk-Free Interest Rate
    
    
    1.89
    %
    
    
    3.04
    %
    
    
    4.29
    %
   Year Ended December 31,2009
    
    2008
    
    2007(In Thousands)Grant Date Fair Value of Options Granted
    
    $
    173
    
    
    $
    216
    
    
    $
    596Fair Value of Options Vested
    
    $
    993
    
    
    $
    1,249
    
    
    $
    1,590Total Intrinsic Value of Options Exercised (1)
    
    $
    
    
    
    $
    
    
    
    $
    1,197Cash Received from Options Exercised
    
    $
    
    
    
    $
    
    
    
    $
    1,145Actual Tax Benefit Realized from Tax Deductions on Options Exercised
    
    $
    
    
    
    $
    
    
    
    $
    317
 
 (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.  Year Ended December 31,2009
    
    
    2008
    
    
    2007Weighted-
    
    
    
    
    
    
    Weighted-
    
    
    
    
    
    
    Weighted-Average
    
    
    
    
    
    
    Average
    
    
    
    
    
    
    AverageNumber
    
    
    Exercise
    
    
    Number
    
    
    Exercise
    
    
    Number
    
    
    Exerciseof
    
    
    Price Per
    
    
    of
    
    
    Price Per
    
    
    of
    
    
    Price PerShares
    
    
    Share
    
    
    Shares
    
    
    Share
    
    
    Shares
    
    
    ShareOptions Outstanding at Beginning of Year
    
    
    1,323,467
    
    
    $
    14.05
    
    
    
    1,472,766
    
    
    $
    15.33
    
    
    
    1,755,813
    
    
    $
    15.31Options Granted
    
    
    270,000
    
    
    $
    1.39
    
    
    
    140,000
    
    
    $
    6.28
    
    
    
    132,667
    
    
    $
    15.05Options Exercised
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
    
    
    
    
    (130,647
    )
    
    $
    8.76Options Forfeited
    
    
    (154,111
    )
    
    $
    11.93
    
    
    
    (208,467
    )
    
    $
    17.36
    
    
    
    (256,267
    )
    
    $
    18.22Options Expired
    
    
    (258,998
    )
    
    $
    12.45
    
    
    
    (80,832
    )
    
    $
    15.33
    
    
    
    (28,800
    )
    
    $
    16.90Options Outstandingat End of Year
    
    
    1,180,358
    
    
    $
    11.78
    
    
    
    1,323,467
    
    
    $
    14.05
    
    
    
    1,472,766
    
    
    $
    15.33Options Exercisable at End of Year
    
    
    743,958
    
    
    $
    14.21
    
    
    
    778,245
    
    
    $
    13.51
    
    
    
    617,634
    
    
    $
    12.48
 124




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##### Table of Contents



HANMI FINANCIAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2009, 2008 AND 2007 (Continued)
 NOTE 13  SHARE-BASED COMPENSATION (Continued)
  Year Ended December 31,2009
    
    
    2008
    
    
    2007Weighted-
    
    
    
    
    
    
    Weighted-
    
    
    
    
    
    
    Weighted-Average
    
    
    
    
    
    
    Average
    
    
    
    
    
    
    AverageNumber
    
    
    Grant Date
    
    
    Number
    
    
    Grant Date
    
    
    Number
    
    
    Grant Dateof
    
    
    Fair Value
    
    
    of
    
    
    Fair Value
    
    
    of
    
    
    Fair ValueShares
    
    
    Per Share
    
    
    Shares
    
    
    Per Share
    
    
    Shares
    
    
    Per ShareNon-Vested Options Outstanding at
Beginning of Year
    
    
    545,222
    
    
    $
    4.79
    
    
    
    855,132
    
    
    $
    5.47
    
    
    
    1,283,910
    
    
    $
    5.53Options Granted
    
    
    270,000
    
    
    $
    0.64
    
    
    
    140,000
    
    
    $
    1.54
    
    
    
    132,667
    
    
    $
    4.49Options Vested
    
    
    (224,711
    )
    
    $
    4.42
    
    
    
    (241,443
    )
    
    $
    5.17
    
    
    
    (305,178
    )
    
    $
    5.21Options Forfeited
    
    
    (154,111
    )
    
    $
    3.96
    
    
    
    (208,467
    )
    
    $
    4.92
    
    
    
    (256,267
    )
    
    $
    5.57Non-Vested Options Outstanding at
End of Year
    
    
    436,400
    
    
    $
    2.71
    
    
    
    545,222
    
    
    $
    4.79
    
    
    
    855,132
    
    
    $
    5.47
  Options Outstanding
    
    
    Options ExercisableWeighted-
    
    
    Weighted-
    
    
    
    
    
    
    
    
    
    
    Weighted-
    
    
    Weighted-Average
    
    
    Average
    
    
    
    
    
    
    
    
    
    
    Average
    
    
    AverageExercise
    
    
    Remaining
    
    
    
    
    
    
    
    
    
    
    Exercise
    
    
    RemainingExercise
    
    Number
    
    
    Intrinsic
    
    
    Price Per
    
    
    Contractual
    
    
    Number
    
    
    Intrinsic
    
    
    Price Per
    
    
    ContractualPrice Range
    
    of Shares
    
    
    Value(1)
    
    
    Share
    
    
    Life
    
    
    of Shares
    
    
    Value(1)
    
    
    Share
    
    
    Life(Dollars in Thousands, Except Per Share Data)$1.35 to $4.99
    
    
    271,624
    
    
    $
    
    
    
    $
    1.71
    
    
    8.1 years
    
    
    36,624
    
    
    $
    
    
    
    $
    3.89
    
    
    0.7 years$5.00 to $9.99
    
    
    174,191
    
    
    
    
    
    
    $
    6.85
    
    
    5.7 years
    
    
    121,191
    
    
    
    
    
    
    $
    6.79
    
    
    4.6 years$10.00 to $14.99
    
    
    267,500
    
    
    
    
    
    
    $
    13.51
    
    
    4.2 years
    
    
    267,500
    
    
    
    
    
    
    $
    13.51
    
    
    4.2 years$15.00 to $19.99
    
    
    395,043
    
    
    
    
    
    
    $
    17.93
    
    
    6.3 years
    
    
    246,643
    
    
    
    
    
    
    $
    17.98
    
    
    6.2 years$20.00 to $21.63
    
    
    72,000
    
    
    
    
    
    
    $
    21.63
    
    
    6.9 years
    
    
    72,000
    
    
    
    
    
    
    $
    21.63
    
    
    6.9 years1,180,358
    
    
    $
    
    
    
    $
    11.78
    
    
    6.2 years
    
    
    743,958
    
    
    $
    
    
    
    $
    14.21
    
    
    5.0 years
 
 (1)
    
    Intrinsic value represents the difference between the closing stock price on the
last trading day of the period, which was $2.06 as of December 31, 2008, and the exercise
price, multiplied by the number of options. Restricted Stock Awards
  125




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##### Table of Contents



HANMI FINANCIAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2009, 2008 AND 2007 (Continued)
 NOTE 13  SHARE-BASED COMPENSATION (Continued)
  Year Ended December 31,2009
    
    
    2008
    
    
    2007Weighted-
    
    
    
    
    
    
    Weighted-
    
    
    
    
    
    
    Weighted-Average
    
    
    
    
    
    
    Average
    
    
    
    
    
    
    AverageNumber
    
    
    Grant Date
    
    
    Number
    
    
    Grant Date
    
    
    Number
    
    
    Grant Dateof
    
    
    Fair Value
    
    
    of
    
    
    Fair Value
    
    
    of
    
    
    Fair ValueShares
    
    
    Per Share
    
    
    Shares
    
    
    Per Share
    
    
    Shares
    
    
    Per ShareRestricted Stock at Beginning of Year
    
    
    20,200
    
    
    $
    11.42
    
    
    
    19,000
    
    
    $
    13.48
    
    
    
    
    
    
    $
    Restricted Stock Granted
    
    
    205,000
    
    
    $
    1.41
    
    
    
    10,000
    
    
    $
    6.68
    
    
    
    19,000
    
    
    $
    13.48Restricted Stock Forfeited
    
    
    (38,000
    )
    
    $
    3.44
    
    
    
    (5,000
    )
    
    $
    8.21
    
    
    
    
    
    
    $
    Restricted Stock Vested
    
    
    (3,800
    )
    
    $
    10.59
    
    
    
    (3,800
    )
    
    $
    10.59
    
    
    
    
    
    
    $
    Restricted Stock at End of Year
    
    
    183,400
    
    
    $
    1.87
    
    
    
    20,200
    
    
    $
    11.42
    
    
    
    19,000
    
    
    $
    13.48
 2004 CEO Stock Option Plan
 Stock Options
   Year Ended December 31,2009
    
    
    2008
    
    
    2007Number
    
    
    Exercise
    
    
    Number
    
    
    Exercise
    
    
    Number
    
    
    Exerciseof
    
    
    Price Per
    
    
    of
    
    
    Price Per
    
    
    of
    
    
    Price PerShares
    
    
    Share
    
    
    Shares
    
    
    Share
    
    
    Shares
    
    
    ShareOptions Outstanding at Beginning of Year
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
    
    
    
    
    350,000
    
    
    $
    17.17Options Forfeited
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
    
    
    
    
    (233,334
    )
    
    $
    17.17Options Repurchased
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
    
    
    
    
    (116,666
    )
    
    $
    17.17Options Outstanding at End of Year
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
    Options Exercisable at End of Year
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
    
 126




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HANMI FINANCIAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2009, 2008 AND 2007 (Continued)
 NOTE 13  SHARE-BASED COMPENSATION (Continued)
  Year Ended December 31,2009
    
    
    2008
    
    
    2007Number
    
    
    Grant Date
    
    
    Number
    
    
    Grant Date
    
    
    Number
    
    
    Grant Dateof
    
    
    Fair Value
    
    
    of
    
    
    Fair Value
    
    
    of
    
    
    Fair ValueShares
    
    
    Per Share
    
    
    Shares
    
    
    Per Share
    
    
    Shares
    
    
    Per ShareNon-Vested Options Outstanding at
Beginning of Year
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
    
    
    
    
    291,667
    
    
    $
    4.82Options Forfeited
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
    
    
    
    
    (233,334
    )
    
    $
    4.82Options Vested
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
    
    
    
    
    (58,333
    )
    
    $
    4.82Non-Vested Options Outstanding at
End of Year
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
    
 Restricted Stock Awards
   Year Ended December 31,2009
    
    
    2008
    
    
    2007Weighted-
    
    
    
    
    
    
    Weighted-
    
    
    
    
    
    
    Weighted-Average
    
    
    
    
    
    
    Average
    
    
    
    
    
    
    AverageNumber
    
    
    Grant Date
    
    
    Number
    
    
    Grant Date
    
    
    Number
    
    
    Grant Dateof
    
    
    Fair Value
    
    
    of
    
    
    Fair Value
    
    
    of
    
    
    Fair ValueShares
    
    
    Per Share
    
    
    Shares
    
    
    Per Share
    
    
    Shares
    
    
    Per ShareRestricted Stock at Beginning of Year
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
    
    
    
    
    60,000
    
    
    $
    18.15Restricted Stock Vested
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
    
    
    
    
    (60,000
    )
    
    $
    18.15Restricted Stock at End of Year
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
    
 NOTE 14  STOCKHOLDERS EQUITY
 Stock Warrants
  127




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HANMI FINANCIAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2009, 2008 AND 2007 (Continued)
 NOTE 14  STOCKHOLDERS EQUITY (Continued)
 Repurchase of Common Stock
  NOTE 15  REGULATORY MATTERS
  Risk-Based Capital
  128




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HANMI FINANCIAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2009, 2008 AND 2007 (Continued)
 NOTE 15  REGULATORY MATTERS (Continued)
  Minimum
    
    
    Minimum to BeRegulatory
    
    
    Categorized asActual
    
    
    Requirement
    
    
    Well CapitalizedAmount
    
    
    Ratio
    
    
    Amount
    
    
    Ratio
    
    
    Amount
    
    
    Ratio(Dollars in Thousands)December 31, 2009Total Capital (to Risk-Weighted Assets):Hanmi Financial
    
    $
    262,796
    
    
    
    9.12
    %
    
    $
    230,614
    
    
    
    8.00
    %
    
    
    N/A
    
    
    
    N/AHanmi Bank
    
    $
    261,194
    
    
    
    9.07
    %
    
    $
    230,261
    
    
    
    8.00
    %
    
    $
    287,826
    
    
    
    10.00
    %Tier 1 Capital (to Risk-Weighted Assets):Hanmi Financial
    
    $
    194,749
    
    
    
    6.76
    %
    
    $
    115,307
    
    
    
    4.00
    %
    
    
    N/A
    
    
    
    N/AHanmi Bank
    
    $
    223,700
    
    
    
    7.77
    %
    
    $
    115,131
    
    
    
    4.00
    %
    
    $
    172,696
    
    
    
    6.00
    %Tier 1 Capital (to Average Assets):Hanmi Financial
    
    $
    194,749
    
    
    
    5.82
    %
    
    $
    133,945
    
    
    
    4.00
    %
    
    
    N/A
    
    
    
    N/AHanmi Bank
    
    $
    223,700
    
    
    
    6.69
    %
    
    $
    133,770
    
    
    
    4.00
    %
    
    $
    167,212
    
    
    
    5.00
    %December 31, 2008Total Capital (to Risk-Weighted Assets):Hanmi Financial
    
    $
    383,043
    
    
    
    10.79
    %
    
    $
    283,943
    
    
    
    8.00
    %
    
    
    N/A
    
    
    
    N/AHanmi Bank
    
    $
    379,438
    
    
    
    10.70
    %
    
    $
    283,561
    
    
    
    8.00
    %
    
    $
    354,451
    
    
    
    10.00
    %Tier 1 Capital (to Risk-Weighted Assets):Hanmi Financial
    
    $
    338,042
    
    
    
    9.52
    %
    
    $
    141,972
    
    
    
    4.00
    %
    
    
    N/A
    
    
    
    N/AHanmi Bank
    
    $
    334,628
    
    
    
    9.44
    %
    
    $
    141,781
    
    
    
    4.00
    %
    
    $
    212,671
    
    
    
    6.00
    %Tier 1 Capital (to Average Assets):Hanmi Financial
    
    $
    338,042
    
    
    
    8.93
    %
    
    $
    151,371
    
    
    
    4.00
    %
    
    
    N/A
    
    
    
    N/AHanmi Bank
    
    $
    334,628
    
    
    
    8.85
    %
    
    $
    151,168
    
    
    
    4.00
    %
    
    $
    188,959
    
    
    
    5.00
    %
 Reserve Requirement
  Memorandum of Understanding
  129




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HANMI FINANCIAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2009, 2008 AND 2007 (Continued)
 NOTE 15  REGULATORY MATTERS (Continued)
    
    
    In the first quarter of 2008, the historical loss rate migration analysis was enhanced.
Twelve previous quarters loss history, with the most recent six quarters weighted more
heavily at 1.5 to 1.0 to factor in the increased loss rate to reflect the changing economic
environment. Previously, the analysis was conducted using the previous 28 quarters all
weighted evenly. The revision is more realistic and dynamic, which is particularly
pertinent during these fast-changing times.
    
    The reserve factors for contingent liabilities have also been enhanced and now are
based on the actual loan pool usage percentages and the risk rating reserve percentages,
whereas before only the weighted historical loss rates for clean loans were used.
    
    Furthermore, collateral values are fluctuating more widely this past year than in previous
years. Therefore,
real estate secured loans are being monitored more frequently, and collateral is being
reappraised more
frequently so that impairment on these loans, whether they are classified loans or pass loans,
may be
calculated accurately for purposes of the allowance for loan losses.
    
    The impairment policy has also been revised to require charge-offs of fully impaired
loans within 90 days of the impairment date. Exceptions to this policy are allowed only
with the Chief Credit Officers approval.
    
    The MOU addresses enhancement of loan policies and procedures. The revisions to the
loan policies and procedures were made more in response to changes in the business
environment and increased credit risk, rather than to a specific mandate in the MOU.
   130




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HANMI FINANCIAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2009, 2008 AND 2007 (Continued)
 NOTE 15  REGULATORY MATTERS (Continued)
   
    
    The Board of Directors membership has been changed. Since October 2008, seven directors
have retired or
resigned. The Board has successfully recruited and elected three new directors, each of them
with prior
banking experience, professional designations and a wealth of knowledge and experience.
    
    The Corporate Governance Guidelines have also been revised and enhanced to more clearly
outline director
qualifications, nomination procedures and succession planning.
    
    The MOU also called for enhancements to the Capital Augmentation and Maintenance Plan, the
Liquidity
Contingency Plan, the Strategic Plan and the Earnings Plan. These have been completed and the
plans are
being followed with positive results.
    
    The MOU requires the Bank to submit reports quarterly on the progress made on all of the
provisions. At
this time, the Bank is in full or substantial compliance with a majority of the provisions,
with the
understanding that some of the provisions, like the Asset Quality Improvement Plan, the
Capital
Augmentation and Maintenance Plan, and the Earnings Plan, require the implementation of the
plans and a
passage of time to show the results of the plans.
    
    The regulators recommended that the Board of Directors increase its members by one
additional director,
and further enhancement to the management succession and retention programs. The Board of
Directors is
addressing these issues.
 Written Agreement and Final Order
  131




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HANMI FINANCIAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2009, 2008 AND 2007 (Continued)
 NOTE 15  REGULATORY MATTERS (Continued)
   Ratio of Tangible ShareholdersDate
    
    Equity to Total Tangible AssetsBy December 31, 2009
    
    Not Less Than 7.0 PercentBy July 31, 2010
    
    Not Less Than 9.0 PercentFrom December 31, 2010 and Until the Order is Terminated
    
    Not Less Than 9.5 Percent
   
    
    The Board Committees have been reorganized after a board assessment was conducted to
leverage the
experience and skill base of our directors and improve board oversight of the Banks
operations.
    
    Tools such as master calendar of scheduled events and policy exception trigger tables have
been created to
assist the Boards ability to monitor the banks operations more effectively.
    
    Jung Hak Son, a 24 year member of the Bank has been appointed to the Chief Credit Officer
position
and is currently awaiting approval from the regulatory agencies.
    
    Loan policies and procedures continue to be adjusted and enhanced to keep current with the
rapidly
changing credit and economic environment.
 132




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HANMI FINANCIAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2009, 2008 AND 2007 (Continued)
 NOTE 15  REGULATORY MATTERS (Continued)
 
    
    Allowance for loan loss quantitative and qualitative factors have been changed to
reflect the higher risk in
the loan portfolio due to the recessionary economy.
    
    The credit department has also been reorganized and reinforced with additional personnel to
increase the
level of management loan review and loan monitoring.
    
    Written plans have been developed for each problem loan greater than $3 Million and the
plans
implemented and monitored to improve loan work out and loan collection.
    
    Banks strategic plan has been reviewed and revised, then approved by the Board of
Directors.
    
    Banks liquidity management plan and contingency funding plan have been significantly
revised to reflect
the additional restrictions and challenges of the market.
    
    Capital plan has been revised and significant effort is being made to raise the required
capital within the
time frame mandated by the Order.
    
    A Compliance Committee has been organized to monitor the progress toward full compliance
with all the
provisions of the Agreement and the Order and approves the reports prior to submission
according to the
schedule established.
    Capital Plan
  133




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HANMI FINANCIAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2009, 2008 AND 2007 (Continued)
 NOTE 16  EARNINGS (LOSS) PER SHARE
   Weighted-Income
    
    
    Average
    
    
    Per(Loss)
    
    
    Shares
    
    
    Share(Numerator)
    
    
    (Denominator)
    
    
    Amount(Dollars in Thousands, Except Per Share Amounts)Year Ended December 31, 2009:Basic EPS  Income Available to Common Stockholders
    
    $
    (122,277
    )
    
    
    47,570,361
    
    
    $
    (2.57
    )Effect of Dilutive Securities  Options and Warrants
    
    
    
    
    
    
    
    
    
    
    Diluted EPS  Income Available to Common Stockholders
    
    $
    (122,277
    )
    
    
    45,570,361
    
    
    $
    (2.57
    )Year Ended December 31, 2008:Basic EPS  Income Available to Common Stockholders
    
    $
    (102,093
    )
    
    
    45,872,541
    
    
    $
    (2.23
    )Effect of Dilutive Securities  Options and Warrants
    
    
    
    
    
    
    
    
    
    
    Diluted EPS  Income Available to Common Stockholders
    
    $
    (102,093
    )
    
    
    45,872,541
    
    
    $
    (2.23
    )Year Ended December 31, 2007:Basic EPS  Income Available to Common Stockholders
    
    $
    (60,762
    )
    
    
    47,787,213
    
    
    $
    (1.27
    )Effect of Dilutive Securities  Options and Warrants
    
    
    
    
    
    
    
    
    
    
    Diluted EPS  Income Available to Common Stockholders
    
    $
    (60,762
    )
    
    
    47,787,213
    
    
    $
    (1.27
    )
  NOTE 17  EMPLOYEE BENEFITS
 4 01(k) Plan
  Bank-Owned Life Insurance
  134




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HANMI FINANCIAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2009, 2008 AND 2007 (Continued)
 NOTE 17  EMPLOYEE BENEFITS (Continued)
 Deferred Compensation Plan
  NOTE 18  COMMITMENTS AND CONTINGENCIES
 Lease Commitments
  Year EndingDecember 31,
    
    Amount(In Thousands)2010
    
    $
    5,4342011
    
    
    4,6672012
    
    
    3,8652013
    
    
    3,3382014
    
    
    2,051Thereafter
    
    
    7,344Total
    
    $
    26,699
  Litigation
  NOTE 19  OFF-BALANCE SHEET COMMITMENTS
  135




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HANMI FINANCIAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2009, 2008 AND 2007 (Continued)
 NOTE 19  OFF-BALANCE SHEET COMMITMENTS (Continued)
  December 31,2009
    
    
    2008(In Thousands)Commitments to Extend Credit
    
    $
    262,821
    
    
    $
    386,785Standby Letters of Credit
    
    
    17,225
    
    
    
    47,289Commercial Letters of Credit
    
    
    13,544
    
    
    
    29,177Unused Credit Card Lines
    
    
    23,408
    
    
    
    16,912Total Undisbursed Loan Commitments
    
    $
    316,998
    
    
    $
    480,163
 NOTE 20  SEGMENT REPORTING
  NOTE 21  CUMULATIVE-EFFECT ADJUSTMENT FROM THE ADOPTION OF EITF ISSUE NO. 06-4
 Compensation-Retirement Benefits, Compensation-Retirement
Benefits,
 136




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HANMI FINANCIAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2009, 2008 AND 2007 (Continued)
 NOTE 22  LIQUIDITY
 Risks and Uncertainties,
 Hanmi Financial
  Hanmi Bank
   137




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HANMI FINANCIAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2009, 2008 AND 2007 (Continued)
 NOTE 22  LIQUIDITY (Continued)
     138




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HANMI FINANCIAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2009, 2008 AND 2007 (Continued)
 NOTE 22  LIQUIDITY (Continued)
  139




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HANMI FINANCIAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2009, 2008 AND 2007 (Continued)
 NOTE 23  CONDENSED FINANCIAL INFORMATION OF PARENT COMPANY
 BALANCE SHEETS
 December 31,2009
    
    
    2008(In Thousands)ASSETSCash
    
    $
    3,486
    
    
    $
    2,167Securities Available for Sale
    
    
    794
    
    
    
    804Investment in Consolidated Subsidiaries
    
    
    228,324
    
    
    
    340,297Investment in Trust Preferred Securities
    
    
    2,475
    
    
    
    2,475Other Assets
    
    
    1,538
    
    
    
    1,738TOTAL ASSETS
    
    $
    236,617
    
    
    $
    347,481LIABILITIES AND STOCKHOLDERS EQUITYLiabilities:Junior Subordinated Debentures
    
    $
    82,406
    
    
    $
    82,406Other Liabilities
    
    
    4,467
    
    
    
    1,160Stockholders Equity
    
    
    149,744
    
    
    
    263,915TOTAL LIABILITIES AND STOCKHOLDERS EQUITY
    
    $
    236,617
    
    
    $
    347,481
 STATEMENTS OF OPERATIONS
 Year Ended December 31,2009
    
    
    2008
    
    
    2007(In Thousands)Equity in Earnings (Losses) of Subsidiaries
    
    $
    (118,340
    )
    
    $
    (97,040
    )
    
    $
    (54,500
    )Other Expenses, Net
    
    
    (6,057
    )
    
    
    (8,610
    )
    
    
    (10,155
    )Income Tax Benefit
    
    
    2,120
    
    
    
    3,557
    
    
    
    3,893NET INCOME (LOSS)
    
    $
    (122,277
    )
    
    $
    (102,093
    )
    
    $
    (60,762
    )
 140




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HANMI FINANCIAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2009, 2008 AND 2007 (Continued)
 NOTE 23  CONDENSED FINANCIAL INFORMATION OF PARENT COMPANY (Continued)
 STATEMENTS OF CASH FLOWS
    
    Year Ended December 31,2009
    
    
    2008
    
    
    2007(In Thousands)CASH FLOWS FROM OPERATING ACTIVITIES:Net Income (Loss)
    
    $
    (122,277
    )
    
    $
    (102,093
    )
    
    $
    (60,762
    )Adjustments to Reconcile Net Income (Loss) to Net Cash Used
In Operating Activities:Losses (Earnings) of Subsidiaries
    
    
    118,340
    
    
    
    97,040
    
    
    
    54,500Share-Based Compensation Expense
    
    
    906
    
    
    
    1,036
    
    
    
    1,891(Increase) Decrease in Other Assets
    
    
    200
    
    
    
    (706
    )
    
    
    3,139Increase (Decrease) in Other Liabilities
    
    
    3,311
    
    
    
    (2,983
    )
    
    
    (208
    )Tax Benefit from Exercises of Stock Options
    
    
    
    
    
    
    
    
    
    
    317Net Cash Provided (Used) In Operating Activities
    
    
    480
    
    
    
    (7,706
    )
    
    
    (1,123
    )CASH FLOWS FROM INVESTING ACTIVITIES:Dividends Received from Hanmi Bank
    
    
    
    
    
    
    8,500
    
    
    
    63,501Payments from (to) Hanmi Bank
    
    
    (6,000
    )
    
    
    
    
    
    
    Business Acquisitions, Net of Cash Received
    
    
    
    
    
    
    
    
    
    
    (1,727
    )Net Cash Provided (Used) By Investing Activities
    
    
    (6,000
    )
    
    
    8,500
    
    
    
    61,774CASH FLOWS FROM FINANCING ACTIVITIES:Proceeds from Exercise of Stock Options and Stock Warrants
    
    
    
    
    
    
    
    
    
    
    1,164Net Proceeds from Issuance of Common Stock in Private Offering
    
    
    6,839
    
    
    
    
    
    
    
    Cash Paid to Acquire Treasury Stock
    
    
    
    
    
    
    
    
    
    
    (49,971
    )Cash Paid to Repurchase Stock Options and Stock Warrants
    
    
    
    
    
    
    (70
    )
    
    
    (2,552
    )Cash Dividends Paid
    
    
    
    
    
    
    (3,853
    )
    
    
    (11,574
    )Net Cash Provided (Used) In Financing Activities
    
    
    6,839
    
    
    
    (3,923
    )
    
    
    (62,933
    )NET INCREASE (DECREASE) IN CASH
    
    
    1,319
    
    
    
    (3,129
    )
    
    
    (2,282
    )Cash at Beginning of Year
    
    
    2,167
    
    
    
    5,296
    
    
    
    7,578CASH AT END OF YEAR
    
    $
    3,486
    
    
    $
    2,167
    
    
    $
    5,296
 141




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HANMI FINANCIAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2009, 2008 AND 2007 (Continued)
 NOTE 24  QUARTERLY FINANCIAL DATA (UNAUDITED)
  Quarter EndedMarch 31
    
    
    June 30
    
    
    September 30
    
    
    December 31(Dollars in Thousands; Except Per Share Amounts)2009:Interest and Dividend Income
    
    $
    48,015
    
    
    $
    47,680
    
    
    $
    45,495
    
    
    $
    42,957Interest Expense
    
    
    24,885
    
    
    
    24,544
    
    
    
    18,977
    
    
    
    14,512Net Interest Income Before Provision for Credit Losses
    
    
    23,130
    
    
    
    23,136
    
    
    
    26,518
    
    
    
    28,445Provision for Credit Losses
    
    
    45,953
    
    
    
    23,934
    
    
    
    49,500
    
    
    
    77,000Non-Interest Income
    
    
    8,380
    
    
    
    7,678
    
    
    
    8,213
    
    
    
    7,839Non-Interest Expense
    
    
    18,252
    
    
    
    25,703
    
    
    
    23,689
    
    
    
    22,710Income (Loss) Before Provision (Benefit) for Income Taxes
    
    
    (32,695
    )
    
    
    (18,823
    )
    
    
    (38,458
    )
    
    
    (63,426
    )Provision (Benefit) for Income Taxes
    
    
    (15,499
    )
    
    
    (9,288
    )
    
    
    21,207
    
    
    
    (27,545
    )NET INCOME (LOSS)
    
    $
    (17,196
    )
    
    $
    (9,535
    )
    
    $
    (59,665
    )
    
    $
    (35,881
    )EARNINGS (LOSS) PER SHARE:Basic
    
    $
    (0.37
    )
    
    $
    (0.21
    )
    
    $
    (1.26
    )
    
    $
    (0.70
    )Diluted
    
    $
    (0.37
    )
    
    $
    (0.21
    )
    
    $
    (1.26
    )
    
    $
    (0.70
    )2008:Interest and Dividend Income
    
    $
    64,970
    
    
    $
    59,663
    
    
    $
    59,441
    
    
    $
    54,109Interest Expense
    
    
    30,773
    
    
    
    25,595
    
    
    
    23,844
    
    
    
    23,570Net Interest Income Before Provision for Credit Losses
    
    
    34,197
    
    
    
    34,068
    
    
    
    35,597
    
    
    
    30,539Provision for Credit Losses
    
    
    17,821
    
    
    
    19,229
    
    
    
    13,176
    
    
    
    25,450Non-Interest Income
    
    
    9,765
    
    
    
    9,652
    
    
    
    5,328
    
    
    
    7,404Non-Interest Expense
    
    
    21,588
    
    
    
    129,443
    
    
    
    22,235
    
    
    
    21,056Income (Loss) Before Provision for Income Taxes
    
    
    4,553
    
    
    
    (104,952
    )
    
    
    5,514
    
    
    
    (8,563
    )Provision for Income Taxes
    
    
    1,632
    
    
    
    595
    
    
    
    1,166
    
    
    
    (4,748
    )NET INCOME (LOSS)
    
    $
    2,921
    
    
    $
    (105,547
    )
    
    $
    4,348
    
    
    $
    (3,815
    )EARNINGS (LOSS) PER SHARE:Basic
    
    $
    0.06
    
    
    $
    (2.30
    )
    
    $
    0.09
    
    
    $
    (0.08
    )Diluted
    
    $
    0.06
    
    
    $
    (2.30
    )
    
    $
    0.09
    
    
    $
    (0.08
    )
 NOTE 25  SUBSEQUENT EVENTS
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SIGNATURES
  HANMI FINANCIAL CORPORATIONBy:
    /s/ Jay S. YooJay S. YooPresident and Chief Executive OfficerDate:
    March 15, 2010  /s/ Jay S. Yoo
    
    /s/ Brian E. ChoJay S. Yoo
    
    Brian E. ChoPresident and Chief Executive Officer
    
    Executive Vice President and Chief Financial Officer(Principal Executive Officer)
    
    (Principal Financial and Accounting Officer)/s/ Joseph K. Rho
    
    /s/ I Joon AhnJoseph K. Rho
    
    I Joon AhnChairman of the Board
    
    Director/s/ John A. Hall
    
    /s/ William J. StolteJohn A. Hall
    
    Richard B. C. LeeDirector
    
    Director/s/ Joon Hyung Lee
    
    /s/ Paul (Seon-Hong) KimJoon Hyung Lee
    
    Paul (Seon-Hong) KimDirector
    
    Director
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##### Table of Contents



HANMI FINANCIAL CORPORATION AND SUBSIDIARIES
 
 EXHIBIT INDEX
 ExhibitNumber
    
    Document3.1
    
    
    Amended and Restated Certificate of Incorporation of Hanmi Financial Corporation (1)3.2
    
    
    Certificate of Second Amendment of Certificate of Incorporation of Hanmi Financial Corporation (1)3.3
    
    
    Certificate of Third Amendment of Certificate of Incorporation of Hanmi Financial Corporation (2)3.4
    
    
    Amended and Restated Bylaws of Hanmi Financial Corporation (1)3.5
    
    
    Certificate of Amendment to Bylaws of Hanmi Financial Corporation dated November 21, 2007 (1)3.6
    
    
    Certificate of Amendment to Bylaws of Hanmi Financial Corporation dated October 14, 2009 (3)4
    
    
    Specimen stock certificate representing Hanmi Financial Corporation Common Stock (4)10.1
    
    
    Amended and Restated Trust Agreement of Hanmi Capital Trust I dated as of January 8, 2004 among Hanmi Financial
Corporation, Deutsche Bank Trust Company Americas, as Property Trustee, Deutsche Bank Trust Company Delaware, as
Delaware Trustee, and the Administrative Trustees Named Therein (5)10.2
    
    
    Hanmi Capital Trust I Junior Subordinated Indenture dated as of January 8, 2004 entered into between Hanmi Financial
Corporation and Deutsche Bank Trust Company Americas, as Trustee (included as exhibit D to Exhibit 10.1) (5)10.3
    
    
    Hanmi Capital Trust I Guarantee Agreement dated as of January 8, 2004 entered into between Hanmi Financial Corporation,
as Guarantor, and Deutsche Bank Trust Company Americas, as Guarantee Trustee (5)10.4
    
    
    Hanmi Capital Trust I Form of Common Securities Certificate (included as exhibit B to Exhibit 10.1) (5)10.5
    
    
    Hanmi Capital Trust I Form of Preferred Securities Certificate (included as exhibit C to Exhibit 10.1) (5)10.6
    
    
    Amended and Restated Trust Agreement of Hanmi Capital Trust II dated as of March 15, 2004 among Hanmi Financial
Corporation, Deutsche Bank Trust Company Americas, as Property Trustee, Deutsche Bank Trust Company Delaware, as
Delaware Trustee, and the Administrative Trustees Named Therein (5)10.7
    
    
    Hanmi Capital Trust II Junior Subordinated Indenture dated as of March 15, 2004 entered into between Hanmi Financial
Corporation and Deutsche Bank Trust Company Americas, as Trustee (included as exhibit D to Exhibit 10.6) (5)10.8
    
    
    Hanmi Capital Trust II Guarantee Agreement dated as of March 15, 2004 entered into between Hanmi Financial Corporation,
as Guarantor, and Deutsche Bank Trust Company Americas, as Guarantee Trustee (5)10.9
    
    
    Hanmi Capital Trust II Form of Common Securities Certificate (included as exhibit B to Exhibit 10.6) (5)10.10
    
    
    Hanmi Capital Trust II Form of Preferred Securities Certificate (included as exhibit C to Exhibit 10.6) (5)10.11
    
    
    Amended and Restated Trust Agreement of Hanmi Capital Trust III dated as of April 28, 2004 among Hanmi Financial
Corporation, Deutsche Bank Trust Company Americas, as Property Trustee, Deutsche Bank Trust Company Delaware, as
Delaware Trustee, and the Administrative Trustees Named Therein (5)10.12
    
    
    Hanmi Capital Trust III Junior Subordinated Indenture dated as of April 28, 2004 entered into between Hanmi Financial
Corporation and Deutsche Bank Trust Company Americas, as Trustee (included as exhibit D to Exhibit 10.11)
(5)10.13
    
    
    Hanmi Capital Trust III Guarantee Agreement dated as of April 28, 2004 entered into between Hanmi Financial Corporation,
as Guarantor, and Deutsche Bank Trust Company Americas, as Guarantee Trustee (5)10.14
    
    
    Hanmi Capital Trust III Form of Common Securities Certificate (included as exhibit B to Exhibit 10.11) (5)10.15
    
    
    Hanmi Capital Trust III Form of Preferred Securities Certificate (included as exhibit C to Exhibit 10.11) (5)10.16
    
    
    Employment Agreement Between Hanmi Financial Corporation and Hanmi Bank, on the One Hand, and Jay S. Yoo, on the Other
Hand, dated as of June 19, 2008 (6) 10.17
    
    
    Hanmi Financial Corporation 2007 Equity Compensation Plan (7) 10.18
    
    
    Hanmi Financial Corporation Year 2000 Stock Option Plan (8) 10.19
    
    
    Form of Notice of Stock Option Grant and Agreement Pursuant to 2007 Equity Compensation Plan (1) 10.20
    
    
    Form of Notice of Grant and Restricted Stock Agreement Pursuant to 2007 Equity Compensation Plan (1) 10.21
    
    
    Employment Offer Letter with Brian E. Cho, executed November 1, 2007 (9) 10.22
    
    
    Securities Purchase Agreement, dated June 12, 2009, by and between Hanmi Financial Corporation and Leading Investments &
Securities Co., Ltd. (10)10.23
    
    
    Registration Rights Agreement, dated June 12, 2009, by and between Hanmi Financial Corporation and Leading Investments &
Securities Co., Ltd. (10)10.24
    
    
    First Amendment to the Securities Purchase Agreement, dated July 31, 2009, by and between Hanmi Financial Corporation
and Leading Investment & Securities Co., Ltd. (11)
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HANMI FINANCIAL CORPORATION AND SUBSIDIARIES
 EXHIBIT INDEX (Continued)
 ExhibitNumber
    
    Document10.25
    
    
    Amended and Restated Term Sheet, dated September 14, 2009, by and among Hanmi Financial Corporation, Leading Investment &
Securities Co., Ltd., and IWL Partners LLC (12)10.26
    
    
    Second Amendment to the Securities Purchase Agreement, dated September 28, 2009, by and between Hanmi Financial Corporation and
Leading Investment & Securities Co., Ltd. (13)10.27
    
    
    First Amendment to the Amended and Restated Term Sheet, dated September 28, 2009, by and between Hanmi Financial Corporation,
Leading Investment & Securities Co., Ltd., and IWL Partners, LLC (13)10.28
    
    
    Final Order, dated November 2, 2009, issued to Hanmi Bank by the California Department of Financial Institutions (14)10.29
    
    
    Written Agreement, dated November 2, 2009, by and between Hanmi Financial Corporation and Hanmi Bank, on one hand, and the
Federal Reserve Bank of San Francisco, on the other hand (14)14
    
    
    Code of Ethics (15)21
    
    
    Subsidiaries of the Registrant (9)23
    
    
    Consent of KPMG LLP31.1
    
    
    Certification of Chief Executive Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act, as
amended31.2
    
    
    Certification of Chief Financial Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act, as
amended32.1
    
    
    Certification of Chief Executive Officer Pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
Act of 200232.2
    
    
    Certification of Chief Financial Officer Pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002
 
 (1)
    
    Previously filed and incorporated by reference herein from Hanmi Financials Annual
Report on Form 10-K for the year ended December 31, 2008 filed with the SEC on March 13, 2009.(2)
    
    Previously filed and incorporated by reference herein from Hanmi Financials
Quarterly Report on Form 10-Q for the quarter ended June 30, 2009 filed with the SEC on August
11, 2009, as amended November 18, 2009.(3)
    
    Previously filed and incorporated by reference herein from Hanmi Financials
Registration Statement on Form S-3 filed with the SEC on February 4, 2010.(4)
    
    Previously filed and incorporated by reference herein from Hanmi Financial
Corporations Registration Statement on Form S-4 filed with the SEC on March 20, 2000.(5)
    
    Previously filed and incorporated by reference herein from Hanmi Financials
Quarterly Report on Form 10-Q for the quarter ended June 30, 2004 filed with the SEC on August
9, 2004.(6)
    
    Previously filed and incorporated by reference herein from Hanmi Financials
Quarterly Report on Form 10-Q for the quarter ended June 30, 2008 filed with the SEC on August
11, 2008.(7)
    
    Previously filed and incorporated by reference herein from Hanmi Financials Current
Report on Form 8-K filed with the SEC on June 26, 2007.(8)
    
    Previously filed and incorporated by reference herein from Hanmi Financials
Registration Statement on Form S-8 filed with the SEC on August 18, 2000.(9)
    
    Previously filed and incorporated by reference herein from Hanmi Financials Annual
Report on Form 10-K for the year ended December 31, 2007 filed with the SEC on February 29,
2008.(10)
    
    Previously filed and incorporated by reference herein from Hanmi Financials
Current Report on Form 8-K filed with the SEC on June 15, 2009.(11)
    
    Previously filed and incorporated by reference herein from Hanmi Financials
Current Report on Form 8-K filed with the SEC on August 3, 2009.(12)
    
    Previously filed and incorporated by reference herein from Hanmi Financials
Current Report on Form 8-K filed with the SEC on September 14, 2009.(13)
    
    Previously filed and incorporated by reference herein from Hanmi Financials
Current Report on Form 8-K filed with the SEC on October 2, 2009.(14)
    
    Previously filed and incorporated by reference herein from Hanmi Financials
Current Report on Form 8-K filed with the SEC on November 5, 2009.(15)
    
    Previously filed and incorporated by reference herein from Hanmi Financials Annual
Report on Form 10-K for the year ended December 31, 2004 filed with the SEC on March 16, 2005.
    
    Constitutes a management contract or compensatory plan or arrangement. 145