##### Table of Contents



UNITED STATES SECURITIES AND
    EXCHANGE COMMISSION Washington, D.C. 20549
      FORM 10-K
  þANNUAL
    REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
    EXCHANGE ACT OF 1934For the Fiscal Year Ended
    December 31, 2008oro  TRANSITION
    REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
    EXCHANGE ACT OF 1934For 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)
  Securities Registered Pursuant to
    Section 12(b) of the Act:
  Title of Each Class

Name of Each Exchange on Which RegisteredCommon Stock, $0.001 Par Value

NASDAQ Global Select Market   Securities Registered Pursuant to
    Section 12(g) of the Act:
 None
  (Title of Class)
  o þ
  o þ
  þ o
  Regulation S-K 10-K Form 10-K. þ
  Rule 12b-2
 Large accelerated filer o

Accelerated filer þ

Non-accelerated filer o

Smaller reporting company o(Do not check if a smaller reporting
    company)   Rule 12b-2 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, 2008
  TABLE OF CONTENTS
   
 PageCautionary Note Regarding Forward-Looking
    Statements


1PART IItem 1.


Business


2Item 1A.


Risk Factors


20Item 1B.


Unresolved Staff Comments


27Item 2.


Properties


28Item 3.


Legal Proceedings


29Item 4.


Submission of Matters to a Vote of Security
    Holders


29PART IIItem 5.


Market for Registrants Common Equity,
    Related Stockholder Matters and Issuer Purchases of Equity
    Securities


29Item 6.


Selected Financial Data


31Item 7.


Managements Discussion and Analysis of
    Financial Condition and Results of Operations


33Item 7A.


Quantitative and Qualitative Disclosures About
    Market Risk


60Item 8.


Financial Statements and Supplementary Data


60Item 9.


Changes In and Disagreements With Accountants on
    Accounting and Financial Disclosure


60Item 9A.


Controls and Procedures


60Item 9B.


Other Information


63PART IIIItem 10.


Directors, Executive Officers and Corporate
    Governance


63Item 11.


Executive Compensation


63Item 12.


Security Ownership of Certain Beneficial Owners
    and Management and Related Stockholder Matters


63Item 13.


Certain Relationships and Related Transactions,
    and Director Independence


63Item 14.


Principal Accounting Fees and Services


63PART IVItem 15.


Exhibits, Financial Statement Schedules


64Index to Consolidated Financial Statements


65Report of Independent Registered Public
    Accounting Firm


66Consolidated Balance Sheets as of
    December 31, 2008 and 2007


67Consolidated Statements of Operations for the
    Years Ended December 31, 2008, 2007 and 2006


68Consolidated Statements of Changes in
    Stockholders Equity and Comprehensive Income for the Years
    Ended December 31, 2008, 2007 and 2006


69Consolidated Statements of Cash Flows for the
    Years Ended December 31, 2008, 2007 and 2006


70Notes to Consolidated Financial Statements


71Signatures


115Exhibit Index


116EX-3.1EX-3.2EX-3.3EX-3.4EX-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 Form 10-K
  
    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
    (the 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 the 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 the Banks ability to pay
    dividends to us and on our ability to make payments on Hanmi
    Financial 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;
    failure to manage our future growth or successfully integrate
    acquisitions;
    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  Liquidity and
    Capital Resources.
 1




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##### Table of Contents



PART I  Item 1.
    Business  General
  (213) 382-2200.
    Korean-American
      Year Ended December 31,(Dollars in Thousands)

2008



2007


2006Interest and Fees on Loans

$
223,942



82.8%



$
261,992



81.6%


$
239,075



80.5%Interest and Dividends on Investments


14,032



5.2%




17,867



5.6%



19,710



6.6%Other Interest Income


209



0.1%




1,037



0.3%



1,404



0.5%Service Charges on Deposit Accounts


18,463



6.8%




18,061



5.6%



17,134



5.8%Other Non-Interest Income


13,686



5.1%




21,945



6.9%



19,829



6.6%Total Revenues

$
270,332



100.0%



$
320,902



100.0%


$
297,152



100.0%   Market
    Area
  Korean-American
 2




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Lending
    Activities
    Real Estate Loans
    Commercial
    Property
    The Wall Street Journal
    Construction
   3




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
    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 generally not exceeding
    65 percent; and
    recourse against the borrower or a guarantor in the event of
    default.  case-by-case
  
    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
       4




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Commercial
    Term Loans
    Commercial
    Lines of Credit
    SBA
    Loans
      International
    Trade Finance
    Consumer Loans
     5




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Off-Balance
    Sheet Commitments
    Lending
    Procedures and Loan Limits
      and/or
  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 and/or
  Deposits
   6




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Website
  www.hanmi.com Form 10-K, Form 10-Q, Form 8-K Form 10-K 1-800-SEC-0330. www.sec.gov
  Employees
    Insurance
    Competition
  and/or
      Korean-American
    Economic
    Developments, Legislation and Regulatory
    Initiatives
   7




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8




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9




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Supervision
    and Regulation
  General
     10




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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.      Capital Standards
 11




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Prompt Corrective Action
    Regulations
             12




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Securities
    Registration
    The Sarbanes-Oxley
    Act of 2002
    
    required executive certification of financial presentations;
    increased requirements for board audit committees and their
    members;
    enhanced disclosure of controls and procedures and internal
    control over financial reporting;
    enhanced controls on, and reporting of, insider trading; and
    increased penalties for financial crimes and forfeiture of
    executive bonuses in certain circumstances.  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.    Permissible
    Activities and Subsidiaries
   13




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Interstate Banking
    and Branching
    Federal Home Loan
    Bank System
    Federal Reserve
    System
    Capital Standards
  Notes to
 14




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Consolidated Financial Statements, Note 14 
    Regulatory Matters.
         15




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Regulatory Capital Guidelines

ActualAdequately

Well

Hanmi

HanmiCapitalized

Capitalized

Bank

FinancialTotal Risk-Based Capital Ratio


8.00
%


10.00
%


10.70
%


10.79
%Tier 1 Risk-Based Capital Ratio


4.00
%


6.00
%


9.44
%


9.52
%Tier 1 Leverage Ratio


4.00
%


5.00
%


8.85
%


8.93
%         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.     16




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FDIC Deposit
    Insurance
          Loans-to-One-Borrower
   17




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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.    Dividends
     18




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Item 5. Market for Registrants Common
    Equity, Related Stockholder Matters and Issuer Purchases of
    Equity Securities  Dividends
    Bank Secrecy Act and
    USA PATRIOT Act
      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 19




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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.    Regulation of
    Subsidiaries
    Item 1A.
    Risk
    Factors    We may be subject to further regulatory
    action.
 20




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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.
    Difficult economic and market conditions have adversely
    affected our industry.
 21




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
    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.  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.
  U.S. and international financial markets and economic
    conditions could adversely affect our liquidity, results of
    operations and financial condition. Managements Discussion and Analysis
    of Financial Condition and Results of Operations 
    Recent Developments,
  We have recently experienced significant changes 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.
 22




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Our allowance for loan losses may not be adequate to cover
    actual losses.
  Liquidity risk could impair our ability to fund operations
    and jeopardize our financial
    condition.
  Brokered deposits may be difficult for us to retain or
    replace at attractive rates as they
    mature.
  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.
 23




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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.
  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. clean-up clean-up
  Our earnings are affected by changing interest
    rates.
 24




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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.
  Competition may adversely affect our
    performance.
  Hanmi 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.
    Liquidity and Capital Resources. 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.
 25




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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. and/or
  Negative publicity could damage our
    reputation.
  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.
 26




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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. and/or
  Item 1B.
    Unresolved
    Staff Comments   27




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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)

3099 West Olympic Boulevard, Second Floor

Los Angeles, CA

OwnedInsurance 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

LeasedLPOs and Subsidiaries:Atlanta LPO
    (1)

3585 Peachtree Industrial Boulevard, Suite 144

Duluth, GA

LeasedChicago LPO
    (1)

6200 North Hiawatha, Suite 235

Chicago, IL

LeasedDallas LPO
    (1)

2711 LBJ Freeway, Suite 114

Farmers Branch, TX

LeasedDenver LPO
    (1)

3033 South Parker Road, Suite 340

Aurora, CO

LeasedNorthwest Region LPO
    (1)

3500 108th Avenue Northeast, Suite 280

Bellevue, 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. 28




---



##### 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 Dividend2008: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 Share2007:Fourth Quarter

$
16.70


$
8.39


$
0.06 Per ShareThird Quarter

$
17.39


$
14.04


$
0.06 Per ShareSecond Quarter

$
19.50


$
15.74


$
0.06 Per ShareFirst Quarter

$
23.18


$
18.58


$
0.06 Per Share   Holders
    Dividends
         29




---



##### Table of Contents



Performance
    Graph
  ®
  TOTAL RETURN
    PERFORMANCE
  
  December 31,Index

Symbol

2003

2004

2005

2006

2007

2008Hanmi Financial


HAFC


$
100.00


$
183.81


$
184.73


$
235.52


$
92.62


$
23.10Nasdaq Composite


IXIC


$
100.00


$
108.59


$
110.08


$
120.56


$
132.39


$
78.72S&P 500 Financials


S5FINL


$
100.00


$
110.70


$
117.38


$
139.94


$
114.55


$
52.43SNL Bank $1B-$5B





$
100.00


$
123.42


$
121.31


$
140.38


$
102.26


$
84.81   Purchases
    of Equity Securities by the Issuer and Affiliated
    Purchasers
   30




---



##### 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,(Dollars in thousands, except for per share data)

2008


2007


2006


2005


2004SUMMARY STATEMENTS OF OPERATIONS:Interest and Dividend Income

$
238,183


$
280,896


$
260,189


$
200,941


$
135,554Interest Expense


103,782



129,110



106,946



62,850



32,652Net Interest Income Before Provision for Credit Losses


134,401



151,786



153,243



138,091



102,902Provision for Credit Losses


75,676



38,323



7,173



5,395



2,907Non-Interest Income


32,149



40,006



36,963



31,450



26,211Non-Interest Expense


194,322



189,929



77,313



70,201



66,566Income (Loss) Before Provision (Benefit) for Income Taxes


(103,448
)


(36,460
)


105,720



93,945



59,640Provision (Benefit) for Income Taxes


(1,355
)


24,302



40,370



36,144



22,960NET INCOME (LOSS)

$
(102,093
)

$
(60,762
)

$
65,350


$
57,801


$
36,680SUMMARY BALANCE SHEETS:Cash and Cash Equivalents

$
215,188


$
122,398


$
138,501


$
163,477


$
127,164Total Investment Securities


197,876



350,457



391,579



443,912



418,973Net Loans
    (1)


3,291,125



3,241,097



2,837,390



2,469,080



2,234,842Total Assets


3,875,816



3,983,657



3,725,243



3,414,252



3,104,188Total Deposits


3,070,080



3,001,699



2,944,715



2,826,114



2,528,807Total Liabilities


3,611,901



3,613,101



3,238,873



2,987,923



2,704,298Total Stockholders Equity


263,915



370,556



486,370



426,329



399,890Tangible Equity


258,965



256,548



272,412



208,580



178,771Average Net Loans
    (1)


3,276,142



3,049,775



2,721,229



2,359,439



1,912,534Average Investment Securities


271,802



368,144



414,672



418,750



425,537Average Interest-Earning Assets


3,653,720



3,494,758



3,214,761



2,871,564



2,387,412Average Total Assets


3,866,856



3,882,891



3,602,181



3,249,190



2,670,701Average Deposits


2,913,171



2,989,806



2,881,448



2,632,254



2,129,724Average Borrowings


591,930



355,819



221,347



165,482



223,780Average Interest-Bearing Liabilities


2,874,470



2,643,296



2,367,389



2,046,227



1,687,688Average Stockholders Equity


323,462



492,637



458,227



417,813



293,313Average Tangible Equity


264,490



275,036



242,362



198,527



143,262PER SHARE DATA:Earnings (Loss) Per Share  Basic

$
(2.23
)

$
(1.27
)

$
1.34


$
1.18


$
0.87Earnings (Loss) Per Share  Diluted

$
(2.23
)

$
(1.27
)

$
1.32


$
1.16


$
0.84Book Value Per Share
    (2)

$
5.75


$
8.08


$
9.91


$
8.76


$
8.11Tangible Book Value Per Share
    (3)

$
5.64


$
5.59


$
5.55


$
4.29


$
3.62Cash Dividends Per Share

$
0.09


$
0.24


$
0.24


$
0.20


$
0.20Common Shares Outstanding


45,905,549



45,860,941



49,076,613



48,658,798



49,330,704    (1)
    
    Loans receivable, net of
    allowance for loan losses and deferred loan fees, and loans held
    for sale.(2)
    
    Total stockholders equity
    divided by common shares outstanding.(3)
    
    Tangible equity divided by
    common shares outstanding. 31




---



##### Table of Contents



As of and for the Year Ended December 31,2008


2007


2006


2005


2004SELECTED PERFORMANCE RATIOS:Return on Average Assets
    (4)


(2.64
)%


(1.56
)%


1.81
%


1.78
%


1.37
%Return on Average Stockholders Equity
    (5)


(31.56
)%


(12.33
)%


14.26
%


13.83
%


12.51
%Return on Average Tangible Equity
    (6)


(38.60
)%


(22.09
)%


26.96
%


29.11
%


25.60
%Net Interest Spread
    (7)


2.91
%


3.16
%


3.57
%


3.93
%


3.75
%Net Interest Margin
    (8)


3.68
%


4.34
%


4.77
%


4.81
%


4.31
%Efficiency Ratio
    (9)


116.67
%


99.03
%


40.65
%


41.41
%


51.56
%Dividend Payout Ratio
    (10)


(4.05
)%


(18.11
)%


18.02
%


16.84
%


26.90
%Average Stockholders Equity to Average Total Assets


8.36
%


12.69
%


12.72
%


12.86
%


10.98
%SELECTED CAPITAL RATIOS:Total Capital to Total Risk-Weighted Assets:Hanmi Financial


10.79
%


10.65
%


12.55
%


12.04
%


11.98
%Hanmi Bank


10.70
%


10.59
%


12.28
%


11.98
%


11.80
%Tier 1 Capital to Total Risk-Weighted Assets:Hanmi Financial


9.52
%


9.40
%


11.58
%


11.03
%


10.93
%Hanmi Bank


9.44
%


9.34
%


11.31
%


10.96
%


10.75
%Tier 1 Capital to Average Total Assets:Hanmi Financial


8.93
%


8.52
%


10.08
%


9.11
%


8.93
%Hanmi Bank


8.85
%


8.47
%


9.85
%


9.06
%


8.78
%SELECTED ASSET QUALITY RATIOS:Non-Performing Loans to Total Gross Loans
    (11)


3.62
%


1.66
%


0.50
%


0.41
%


0.27
%Non-Performing Assets to Total Assets
    (12)


3.17
%


1.37
%


0.38
%


0.30
%


0.19
%Net Loan Charge-Offs to Average Total Gross Loans


1.38
%


0.73
%


0.17
%


0.12
%


0.19
%Allowance for Loan Losses to Total Gross Loans


2.11
%


1.33
%


0.96
%


1.00
%


1.00
%Allowance for Loan Losses to Non-Performing Loans


58.23
%


80.05
%


193.86
%


246.40
%


377.49
%   (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.(8)
    
    Net interest income before
    provision for credit losses divided by average interest-earning
    assets.(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 loans, loans past due 90 days or more and
    restructured loans.(12)
    
    Non-performing assets consist of
    non-performing loans and other real estate owned.  Non-GAAP Financial
    Measures
  Return on Average
    Tangible Equity
   32




---



##### Table of Contents



Year Ended December 31,(Dollars in thousands)

2008


2007


2006


2005


2004Average Stockholders Equity

$
323,462


$
492,637


$
458,227


$
417,813


$
293,313Less Average Goodwill and Average Other Intangible Assets


(58,972
)


(217,601
)


(215,865
)


(219,286
)


(150,051
)Average Tangible Equity

$
264,490


$
275,036


$
242,362


$
198,527


$
143,262Return on Average Stockholders Equity


(31.56
)%


(12.33
)%


14.26
%


13.83
%


12.51
%Effect of Average Goodwill and Average Other Intangible Assets


(7.04
)%


(9.76
)%


12.70
%


15.28
%


13.09
%Return on Average Tangible Equity


(38.60
%)


(22.09
%)


26.96
%


29.11
%


25.60
%   Tangible Book Value
    Per Share
      December 31,(Dollars in thousands, except per share amounts)

2008


2007


2006


2005


2004Total Stockholders Equity

$
263,915


$
370,556


$
486,370


$
426,329


$
399,890Less Goodwill and Other Intangible Assets


(4,950
)


(114,008
)


(213,958
)


(217,749
)


(221,119
)Tangible Equity

$
258,965


$
256,548


$
272,412


$
208,580


$
178,771Book Value Per Share

$
5.75


$
8.08


$
9.91


$
8.76


$
8.11Effect of Goodwill and Other Intangible Assets


(0.11
)


(2.49
)


(4.36
)


(4.47
)


(4.49
)Tangible Book Value Per Share

$
5.64


$
5.59


$
5.55


$
4.29


$
3.62   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 1  Summary of Significant
    Accounting Policies.
 33




---



##### Table of Contents



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 1  Summary of Significant Accounting
    Policies
  Loan Sales
  Notes to Consolidated Financial Statements,
    Note 1  Summary of Significant Accounting
    Policies Note 4 
    Loans
  Goodwill
  Goodwill and Other
    Intangible Assets,
  Notes to
    Consolidated Financial Statements, Note 1 
    Summary of Significant Accounting Policies Note 6  Goodwill
  Investment Securities
  Notes to Consolidated
    Financial
 34




---



##### Table of Contents



Statements, Note 1  Summary of Significant
    Accounting Policies Accounting for Certain
    Investments in Debt and Equity Securities,
    Notes to Consolidated Financial Statements,
    Note 3  Securities
  Income Taxes
  Notes to Consolidated
    Financial Statements, Note 1  Summary of
    Significant Accounting Policies Note 11  Income Taxes
 35




---



##### Table of Contents



Executive
    Overview
               36




---



##### Table of Contents



Year Ended December 31,2008


2007(In thousands)GAAP Net Loss

$
(102,093
)

$
(60,762
)Impairment Loss on Goodwill


107,393



102,891Non-GAAP Net Income, Excluding Impairment Loss on
    Goodwill

$
5,300


$
42,129   Results
    of Operations
  Net Interest
    Income, Net Interest Spread and Net Interest Margin


37




---



##### Table of Contents



Year Ended December 31,2008


2007


2006Interest


Average





Interest


Average





Interest


AverageAverage


Income/


Yield/


Average


Income/


Yield/


Average


Income/


Yield/(Dollars in thousands)

Balance


Expense


Rate


Balance


Expense


Rate


Balance


Expense


RateASSETSInterest-Earning Assets:Gross Loans, Net
    (1)

$
3,332,133


$
223,942



6.72
%

$
3,080,544


$
261,992



8.50
%

$
2,747,922


$
239,075



8.70
%Municipal Securities
    (2)


63,918



2,717



4.25
%


71,937



3,055



4.25
%


72,694



3,087



4.25
%Obligations of Other U.S. Government Agencies


65,440



2,813



4.30
%


116,701



4,963



4.25
%


122,503



5,148



4.20
%Other Debt Securities


142,444



6,574



4.62
%


179,506



8,436



4.70
%


219,475



10,120



4.61
%Equity Securities


38,516



1,918



4.98
%


26,228



1,413



5.39
%


24,684



1,354



5.49
%Federal Funds Sold


8,934



166



1.86
%


19,746



1,032



5.23
%


27,410



1,402



5.11
%Term Federal Funds Sold


1,913



43



2.25
%


96



5



5.21
%


41



2



4.88
%Interest-Earning Deposits


422



10



2.37
%














32



1



4.04
%Total Interest-Earning Assets


3,653,720



238,183



6.52
%


3,494,758



280,896



8.04
%


3,214,761



260,189



8.09
%Noninterest-Earning Assets:Cash and Cash Equivalents


88,679











92,148











93,535Allowance for Loan Losses


(55,991
)










(30,769
)










(26,693
)Other Assets


180,448











326,754











320,578Total Noninterest-Earning Assets


213,136











388,133











387,420Total Assets

$
3,866,856










$
3,882,891










$
3,602,181LIABILITIES AND STOCKHOLDERS EQUITYInterest-Bearing Liabilities:Deposits:Savings

$
89,866



2,093



2.33
%

$
97,173



2,004



2.06
%

$
107,811



1,853



1.72
%Money Market Checking and NOW Accounts


618,779



19,909



3.22
%


452,825



15,446



3.41
%


471,780



14,539



3.08
%Time Deposits of $100,000 or More


1,045,968



43,598



4.17
%


1,430,603



75,516



5.28
%


1,286,202



64,184



4.99
%Other Time Deposits


527,927



18,753



3.55
%


306,876



15,551



5.07
%


280,249



12,977



4.63
%Federal Home Loan Bank Advances and Other Borrowings


509,524



14,373



2.82
%


273,413



13,949



5.10
%


138,941



6,977



5.02
%Junior Subordinated Debentures


82,406



5,056



6.14
%


82,406



6,644



8.06
%


82,406



6,416



7.79
%Total Interest-Bearing Liabilities


2,874,470



103,782



3.61
%


2,643,296



129,110



4.88
%


2,367,389



106,946



4.52
%Noninterest-Bearing Liabilities:Demand Deposits


630,631











702,329











735,406Other Liabilities


38,293











44,629











41,159Total Noninterest-Bearing Liabilities


668,924











746,958











776,565Total Liabilities


3,543,394











3,390,254











3,143,954Stockholders Equity


323,462











492,637











458,227Total Liabilities and Stockholders Equity

$
3,866,856










$
3,882,891










$
3,602,181Net Interest Income





$
134,401










$
151,786










$
153,243Net Interest
    Spread(3)










2.91
%










3.16
%










3.57
%Net Interest
    Margin(4)










3.68
%










4.34
%










4.77
%   (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 $2.4 million,
    $2.7 million and $4.8 million for the years ended
    December 31, 2008, 2007 and 2006, respectively.(2)
    
    Tax-exempt income, computed on a
    tax-equivalent basis using an effective marginal rate of
    35 percent, was $4.2 million, $4.7 million and
    $4.7 million for the years ended December 31, 2008,
    2007 and 2006, respectively. Yields on tax-exempt income were
    6.54 percent, 6.53 percent and 6.53 percent for
    the years ended December 31, 2008, 2007 and 2006,
    respectively.(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. 38




---



##### Table of Contents



Year Ended December 31,2008 vs. 2007





2007 vs. 2006Increase (Decrease)





Increase (Decrease)Due to Change in





Due to Change in(In thousands)

Volume


Rate


Total


Volume


Rate


TotalInterest and Dividend Income:Gross Loans, Net

$
20,139


$
(58,189
)

$
(38,050
)

$
28,385


$
(5,468
)

$
22,917Municipal Securities


(341
)


3



(338
)


(30
)


(2
)


(32
)Obligations of Other U.S. Government Agencies


(2,202
)


52



(2,150
)


(249
)


64



(185
)Other Debt Securities


(1,713
)


(149
)


(1,862
)


(1,877
)


193



(1,684
)Equity Securities


619



(114
)


505



84



(25
)


59Federal Funds Sold


(398
)


(468
)


(866
)


(401
)


31



(370
)Term Federal Funds Sold


43



(5
)


38



3







3Interest-Earning Deposits


10







10







(1
)


(1
)Total Interest and Dividend Income


16,157



(58,870
)


(42,713
)


25,915



(5,208
)


20,707Interest Expense:Savings


(158
)


247



89



(195
)


346



151Money Market Checking and NOW Accounts


5,382



(919
)


4,463



(601
)


1,508



907Time Deposits of $100,000 or More


(17,907
)


(14,011
)


(31,918
)


7,481



3,851



11,332Other Time Deposits


8,835



(5,633
)


3,202



1,291



1,283



2,574Federal Home Loan Bank Advances and Other Borrowings


8,497



(8,073
)


424



6,858



114



6,972Junior Subordinated Debentures






(1,588
)


(1,588
)






228



228Total Interest Expense


4,649



(29,977
)


(25,328
)


14,834



7,330



22,164Change in Net Interest Income

$
11,508


$
(28,893
)

$
(17,385
)

$
11,081


$
(12,538
)

$
(1,457
)        39




---



##### Table of Contents



Provision
    for Credit Losses
      Non-Interest
    Income
    Year Ended December 31,(In thousands)

2008


2007


2006Service Charges on Deposit Accounts

$
18,463


$
18,061


$
17,134Insurance Commissions


5,067



4,954



770Trade Finance Fees


3,088



4,493



4,567Other Service Charges and Fees


2,365



2,527



2,359Remittance Fees


2,194



2,049



2,056Bank-Owned Life Insurance Income


952



933



879Gain on Sales of Loans


765



5,452



6,917Gain on Sales of Securities Available for Sale


77







2Other-Than-Temporary Impairment Loss on Securities


(3,115
)


(1,074
)


Other Income


2,293



2,611



2,279Total Non-Interest Income

$
32,149


$
40,006


$
36,963      40




---



##### Table of Contents



Non-Interest
    Expense
    Year Ended December 31,(In thousands)

2008


2007


2006Salaries and Employee Benefits

$
42,209


$
47,036


$
40,512Occupancy and Equipment


11,158



10,494



9,643Data Processing


5,799



6,390



5,857Professional Fees


3,539



2,468



1,910Advertising and Promotion


3,518



3,630



2,997Supplies and Communications


2,518



2,592



2,391Amortization of Other Intangible Assets


1,958



2,324



2,379Impairment Loss on Goodwill


107,393



102,891



Other Operating Expenses


16,230



12,104



11,624Total Non-Interest Expense

$
194,322


$
189,929


$
77,313      41




---



##### Table of Contents



Income Taxes
      Notes to Consolidated Financial
    Statements, Note 11  Income Taxes,
 42




---



##### Table of Contents



Financial
    Condition
  Investment Portfolio
           Investment Portfolio as of December 31,2008


2007


2006Amortized


Fair


Amortized


Fair


Amortized


Fair(In thousands)

Cost


Value


Cost


Value


Cost


ValueSecurities Held to Maturity:Municipal Bonds

$
695


$
695


$
694


$
694


$
693


$
693Mortgage-Backed Securities


215



215



246



247



274



276Total Securities Held to Maturity

$
910


$
910


$
940


$
941


$
967


$
969Securities Available for Sale:Mortgage-Backed Securities

$
77,515


$
78,860


$
99,332


$
99,198


$
123,614


$
121,608Municipal Bonds


58,987



58,313



69,907



71,751



69,966



71,710Collateralized Mortgage Obligations


36,204



36,162



51,881



51,418



67,605



66,113U.S. Government Agency Securities


17,580



17,700



104,893



105,089



119,768



118,244Other Securities


4,684



4,958



3,925



3,835



4,999



5,050Equity Securities


511



804















Corporate Bonds


355



169



18,295



18,226



8,090



7,887Total Securities Available for Sale

$
195,836


$
196,966


$
348,233


$
349,517


$
394,042


$
390,612  43




---



##### Table of Contents



After One Year


After Five YearsWithin


But Within


But Within


AfterOne Year


Five Years


Ten Years


Ten Years(Dollars in thousands)

Amount


Yield


Amount


Yield


Amount


Yield


Amount


YieldMortgage-Backed Securities

$
536



4.21
%

$
15,457



4.00
%

$
24,990



4.72
%

$
36,747



5.04
%Municipal Bonds
    (1)










3,116



5.05
%


7,778



6.45
%


48,788



6.52
%Collateralized Mortgage Obligations


11,143



4.05
%


21,734



4.17
%


2,961



3.99
%


366



4.32
%U.S. Government Agency Securities


2,999



4.19
%


14,581



3.37
%














Other Securities


4,684



2.85
%






















Equity Securities


























511



Corporate Bonds


355



7.88
%






















$
19,717



3.86
%

$
54,888



3.96
%

$
35,729



5.04
%

$
86,412



5.84
%    (1)
    
    The yield on municipal bonds
    has been computed on a tax-equivalent basis, using an effective
    marginal rate of 35 percent.  Loan
    Portfolio
    and/or
  and/or
 44




---



##### Table of Contents



Amount of Loans Outstanding as of December 31,(In thousands)

2008


2007


2006


2005


2004Real Estate Loans:Commercial Property

$
908,970


$
795,675


$
757,428


$
733,650


$
783,539Construction


178,783



215,857



202,207



152,080



92,521Residential
    Property(1)


92,361



90,375



81,758



88,442



80,786Total Real Estate Loans


1,180,114



1,101,907



1,041,393



974,172



956,846Commercial and Industrial Loans:Commercial Term Loans


1,611,449



1,599,853



1,202,612



945,210



754,108Commercial Lines of Credit


214,699



256,978



225,630



224,271



201,940SBA
    Loans(2)


178,399



118,528



171,631



155,491



166,285International Loans


95,185



119,360



126,561



106,520



95,936Total Commercial and Industrial Loans


2,099,732



2,094,719



1,726,434



1,431,492



1,218,269Consumer
    Loans(3)


83,525



90,449



100,121



92,154



87,526Total Gross Loans

$
3,363,371


$
3,287,075


$
2,867,948


$
2,497,818


$
2,262,641    (1)
    
    As of December 31, 2008,
    2007, 2006, 2005 and 2004, residential mortgage loans held for
    sale totaling $0, $310,000, $630,000, $1.1 million and $0,
    respectively, were included at the lower of cost or fair
    value.(2)
    
    As of December 31, 2008,
    2007, 2006, 2005 and 2004, SBA loans held for sale totaling
    $37.4 million, $6.0 million, $23.2 million, $0
    and $3.9 million, 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 31,2008


2007


2006


2005


2004Real Estate Loans:Commercial Property


27.0
%


24.2
%


26.4
%


29.4
%


34.6
%Construction


5.3
%


6.6
%


7.1
%


6.1
%


4.1
%Residential Property


2.8
%


2.7
%


2.8
%


3.5
%


3.6
%Total Real Estate Loans


35.1
%


33.5
%


36.3
%


39.0
%


42.3
%Commercial and Industrial Loans:Commercial Term Loans


47.9
%


48.7
%


41.9
%


37.8
%


33.3
%Commercial Lines of Credit


6.4
%


7.8
%


7.9
%


9.0
%


8.9
%SBA Loans


5.3
%


3.6
%


6.0
%


6.2
%


7.3
%International Loans


2.8
%


3.6
%


4.4
%


4.3
%


4.3
%Total Commercial and Industrial Loans


62.4
%


63.7
%


60.2
%


57.3
%


53.8
%Consumer Loans


2.5
%


2.8
%


3.5
%


3.7
%


3.9
%Total Gross Loans


100.0
%


100.0
%


100.0
%


100.0
%


100.0
%  45




---



##### Table of Contents



December 31,(In thousands)

2008


2007Commitments to Extend Credit

$
386,785


$
524,349Standby Letters of Credit


47,289



48,071Commercial Letters of Credit


29,177



52,544Unused Credit Card Lines


16,912



18,622Total Undisbursed Loan Commitments

$
480,163


$
643,586     After OneYear ButWithin


Within


After(In thousands)

One Year


Five Years


Five Years


TotalReal Estate Loans:Commercial Property

$
799,795


$
109,175


$



$
908,970Construction


178,783











178,783Residential Property


37,422



39,443



15,496



92,361Total Real Estate Loans


1,016,000



148,618



15,496



1,180,114Commercial and Industrial Loans:Commercial Term Loans


915,473



346,576



349,400



1,611,449Commercial Lines of Credit


214,699











214,699SBA Loans


169,305



1,288



7,806



178,399International Loans


95,185











95,185Total Commercial and Industrial Loans


1,394,662



347,864



357,206



2,099,732Consumer Loans


65,212



18,269



44



83,525Total Gross Loans

$
2,475,874


$
514,751


$
372,746


$
3,363,371Loans With Predetermined Interest Rates

$
367,434


$
498,685


$
371,973


$
1,238,092Loans With Variable Interest Rates

$
2,108,440


$
16,066


$
773


$
2,125,279     Balance as ofDecember 31,


Percentage of TotalIndustry

2008


Gross Loans Outstanding(In thousands)Lessors of Non-Residential Buildings

$
450,226



13.4
%Accommodation/Hospitality

$
444,870



13.2
%Gasoline Stations

$
381,036



11.3
%     Non-Performing
    Assets
   46




---



##### Table of Contents



47




---



##### Table of Contents



December 31,(Dollars in thousands)

2008


2007


2006


2005


2004Non-Performing Loans:Non-Accrual Loans:Real Estate Loans:Commercial Property

$
8,160


$
2,684


$
246


$



$
Construction


38,163



24,118











Residential Property


1,350



1,490







474



112Commercial and Industrial Loans


73,007



25,729



13,862



9,574



5,510Consumer Loans


143



231



105



74



184Total Non-Accrual Loans


120,823



54,252



14,213



10,122



5,806Loans 90 Days or More Past Due and Still Accruing (as to
    Principal or Interest):Commercial and Industrial Loans


989



150











169Consumer Loans


86



77



2



9



39Total Loans 90 Days or More Past Due and Still Accruing (as to
    Principal or Interest)


1,075



227



2



9



208Total Non-Performing Loans


121,898



54,479



14,215



10,131



6,014Other Real Estate Owned


823



287











Total Non-Performing Assets

$
122,721


$
54,766


$
14,215


$
10,131


$
6,014Non-Performing Loans as a Percentage of Total Gross Loans


3.62
%


1.66
%


0.50
%


0.41
%


0.27
%Non-Performing Assets as a Percentage of Total Assets


3.17
%


1.37
%


0.38
%


0.30
%


0.19
%     Allowance
    for Loan Losses and Allowance for
    Off-Balance
    Sheet Items
   48




---



##### Table of Contents



December 31,(Dollars in thousands)

2008


2007


2006


2005


2004Allowance for Loan

Allowance


Loans


Allowance


Loans


Allowance


Loans


Allowance


Loans


Allowance


LoansLosses Applicable To

Amount


Receivable


Amount


Receivable


Amount


Receivable


Amount


Receivable


Amount


ReceivableReal Estate Loans:Commercial Property

$
5,587


$
908,970


$
2,269


$
795,675


$
2,101


$
757,428


$
2,043


$
733,650


$
1,854


$
783,539Construction


4,102



178,783



3,478



215,857



586



202,207



475



152,080



349



92,521Residential
    Property(1)


449



92,361



32



90,065



19



81,128



19



87,377



155



80,786Total Real Estate Loans


10,138



1,180,114



5,779



1,101,597



2,706



1,040,763



2,537



973,107



2,358



956,846Commercial and Industrial
    Loans(1)


58,866



2,062,322



36,011



2,088,694



23,099



1,703,194



21,035



1,431,492



19,051



1,214,419Consumer Loans


1,586



83,525



1,821



90,449



1,752



100,121



1,391



92,154



1,293



87,526Unallocated


396



































Total

$
70,986


$
3,325,961


$
43,611


$
3,280,740


$
27,557


$
2,844,078


$
24,963


$
2,496,753


$
22,702


$
2,258,791   (1)
    
    Loans held for sale
    excluded.         49




---



##### Table of Contents



Provision for Credit Losses.
     50




---



##### Table of Contents



As of and For The Year Ended December 31,(Dollars in thousands)

2008


2007


2006


2005


2004Allowance for Loan Losses:Balance at Beginning of Year

$
43,611


$
27,557


$
24,963


$
22,702


$
13,349Allowance for Loan Losses from PUB Acquisition


















10,566Charge-Offs:Real Estate Loans


15,005



199











Commercial and Industrial Loans


31,916



22,255



5,333



4,371



5,004Consumer Loans


1,231



876



796



827



481Total Charge-Offs


48,152



23,330



6,129



5,198



5,485Recoveries on Loans Previously Charged Off:Real Estate Loans










406







Commercial and Industrial Loans


1,979



494



957



2,193



1,702Consumer Loans


203



202



187



201



78Total Recoveries on Loans Previously Charged Off


2,182



696



1,550



2,394



1,780Net Loan Charge-Offs


45,970



22,634



4,579



2,804



3,705Provision Charged to Operating Expense


73,345



38,688



7,173



5,065



2,492Balance at End of Year

$
70,986


$
43,611


$
27,557


$
24,963


$
22,702Allowance for Off-Balance Sheet Items:Balance at Beginning of Year

$
1,765


$
2,130


$
2,130


$
1,800


$
1,385Provision Charged to Operating Expense


2,331



(365
)






330



415Balance at End of Year

$
4,096


$
1,765


$
2,130


$
2,130


$
1,800Ratios:Net Loan Charge-Offs to Average Total Gross Loans


1.38
%


0.73
%


0.17
%


0.12
%


0.19
%Net Loan Charge-Offs to Total Gross Loans at End of Period


1.37
%


0.69
%


0.16
%


0.11
%


0.16
%Allowance for Loan Losses to Average Total Gross Loans


2.13
%


1.41
%


1.00
%


1.05
%


1.17
%Allowance for Loan Losses to Total Gross Loans at End of Period


2.11
%


1.33
%


0.96
%


1.00
%


1.00
%Net Loan Charge-Offs to Allowance for Loan Losses


64.76
%


51.90
%


16.62
%


11.23
%


16.32
%Net Loan Charge-Offs to Provision Charged to Operating Expense


62.68
%


58.50
%


63.84
%


55.36
%


148.68
%Allowance for Loan Losses to Non-Performing Loans


58.23
%


80.05
%


193.86
%


246.40
%


377.55
%Balances:Average Total Gross Loans Outstanding During Period

$
3,334,008


$
3,082,671


$
2,751,565


$
2,386,575


$
1,938,422Total Gross Loans Outstanding at End of Period

$
3,363,371


$
3,287,075


$
2,867,948


$
2,497,818


$
2,262,641Non-Performing Loans at End of Period

$
121,898


$
54,479


$
14,215


$
10,131


$
6,014   51




---



##### Table of Contents



Deposits
              Year Ended December 31,2008


2007


2006Average


Average


Average


Average


Average


Average(Dollars in thousands)

Balance


Rate


Balance


Rate


Balance


RateDemand, Noninterest-Bearing

$
630,631






$
702,329






$
735,406



Savings


89,866



2.33%



97,173



2.06%



107,811



1.72%Money Market Checking and NOW Accounts


618,779



3.22%



452,825



3.41%



471,780



3.08%Time Deposits of $100,000 or More


1,045,968



4.17%



1,430,603



5.28%



1,286,202



4.99%Other Time Deposits


527,927



3.55%



306,876



5.07%



280,249



4.63%Total Deposits

$
2,913,171



2.90%


$
2,989,806



3.63%


$
2,881,448



3.25%  52




---



##### Table of Contents



December 31,(In thousands)

2008


2007


2006Three Months or Less

$
238,695


$
958,917


$
689,309Over Three Months Through Six Months


246,087



289,293



414,687Over Six Months Through Twelve Months


338,233



188,890



274,402Over Twelve Months


26,785



4,583



4,960Total Time Deposits of $100,000 or More

$
849,800


$
1,441,683


$
1,383,358   FHLB
    Advances and Other Borrowings
    Junior
    Subordinated Debentures
  Item 1.
    Business  Supervision and Regulation. Hanmi
    Financial
  Interest
    Rate Risk Management
   53




---



##### Table of Contents



After


After OneLess


Three


Year ButThan


Months


Within


After


Non-Three


But Within


Five


Five


Interest-(Dollars in thousands)

Months


One Year


Years


Years


Sensitive


TotalAssetsCash

$



$



$



$



$
85,188


$
85,188Federal Funds Sold


130,000



















130,000Securities:Fixed Rate


41,273



26,370



67,248



43,455







178,346Floating Rate


3,510







11,790



4,230







19,530Loans:Fixed Rate


231,115



225,703



498,685



245,306







1,200,809Floating Rate


1,898,935



35,100



106,931



773







2,041,739Non-Accrual


















120,823



120,823Deferred Loan Fees and Allowance for Loan Losses


















(72,246
)


(72,246
)Federal Home Loan Bank and Federal Reserve Bank Stock














40,925







40,925Other Assets






25,477







7,661



97,564



130,702Total Assets

$
2,304,833


$
312,650


$
684,654


$
342,350


$
231,329


$
3,875,816Liabilities and Stockholders EquityLiabilities:Deposits:Demand Deposits

$
35,430


$
107,852


$
258,846


$
134,816


$



$
536,944Savings


13,368



29,254



32,704



6,543







81,869Money Market Checking and NOW Accounts


54,638



105,106



120,379



90,278







370,401Time Deposits:Fixed Rate


630,523



1,293,974



156,177



138







2,080,812Floating Rate


54



















54Federal Home Loan Bank Advances and Other Borrowings


11,781



150,297



255,551



5,354







422,983Junior Subordinated Debentures


82,406



















82,406Other Liabilities


















36,432



36,432Stockholders Equity


















263,915



263,915Total Liabilities and Stockholders Equity

$
828,200


$
1,686,483


$
823,657


$
237,129


$
300,347


$
3,875,816Repricing Gap

$
1,476,633


$
(1,373,833
)

$
(139,003
)

$
105,221


$
(69,018
)

$
Cumulative Repricing Gap

$
1,476,633


$
102,800


$
(36,203
)

$
69,018


$



$
Cumulative Repricing Gap as a Percentage of Total Assets


38.10
%


2.65
%


(0.93
)%


1.78
%


Cumulative Repricing Gap as a Percentage of Interest-Earning
    Assets


40.89
%


2.85
%


(1.00
)%


1.91
%


  54




---



##### Table of Contents



point-in-time
      Less Than


Less ThanThree Months


Twelve MonthsDecember 31,


December 31,(Dollars in thousands)

2008


2007


2008


2007Cumulative Repricing Gap

$
1,476,633


$
57,250


$
102,800


$
(740,764
)Percentage of Total Assets


38.10
%


1.44
%


2.65
%


(18.59
)%Percentage of Interest-Earning Assets


40.89
%


1.58
%


2.85
%


(20.39
)%       Rate Shock TablePercentage Changes


Change in AmountNet


Economic


Net


EconomicChange in


Interest


Value of


Interest


Value ofInterest Rate


Income


Equity


Income


Equity(Dollars in thousands)200
%


8.11
%


(7.69
)%

$
9,679


$
(37,500
)100
%


4.40
%


(3.92
)%

$
5,251


$
(19,127
)(100
)%


(11.71
)%


9.62
%

$
(13,974
)

$
46,957(200
)%


(23.67
)%


18.88
%

$
(28,251
)

$
92105     Liquidity
    and Capital Resources
  Capital
    Resources
   55




---



##### Table of Contents



Liquidity
  Notes to
    Consolidated Financial Statements, Note 14 
    Regulatory Matters
    and/or and/or
     56




---



##### Table of Contents



Borrower-in-Custody
          Korean-American
     57




---



##### Table of Contents



U.S.-based
    Off-Balance
    Sheet Arrangements
  case-by-case
    December 31,2008


2007(In thousands)Commitments to Extend Credit

$
386,785


$
524,349Standby Letters of Credit


47,289



48,071Commercial Letters of Credit


29,177



52,544Unused Credit Card Lines


16,912



18,622Total Undisbursed Loan Commitments

$
480,163


$
643,586


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

$
1,929,025


$
151,699


$
4


$
138


$
2,080,866Federal Home Loan Bank Advances and Other Borrowings


161,787



156,908



100,000



4,288



422,983Commitments to Extend Credit


386,785















386,785Junior Subordinated Debentures














82,406



82,406Standby Letters of Credit


45,480



1,709







100



47,289Operating Lease Obligations


5,382



9,186



6,037



6,479



27,084Total Contractual Obligations

$
2,528,459


$
319,502


$
106,041


$
93,411


$
3,047,413  58




---



##### Table of Contents



Recently
    Issued Accounting Standards
  Financial Accounting Standards Board (FASB) Staff
    Position (FSP)
    EITF 99-20-1,
    Amendments to the Impairment Guidance of Emerging Issues
    Task Force (EITF) Issue
    No. 99-20 EITF 99-20-1, No. 99-20. EITF 99-20-1 No. 99-20 Accounting for Certain
    Investments in Debt and Equity Securities, EITF 99-20-1 EITF 99-20-1
  EITF Issue
    No. 08-5,
    Issuers Accounting for Liabilities Measured at Fair
    Value With a Third-Party Credit Enhancement No. 08-5, 08-5
  FSP
    EITF 03-6-1,
    Determining Whether Instruments Granted in Share-Based
    Payment Transactions Are Participating Securities EITF 03-6-1, EITF 03-6-1
  SFAS No. 162, The Hierarchy of Generally
    Accepted Accounting Principles The Meaning of Present Fairly in
    Conformity with Generally Accepted Accounting Principles.
  FSP
    No. FAS 142-3,
    Determination of the Useful Life of Intangible
    Assets No. FAS 142-3, Goodwill and Other Intangible
    Assets. No. FAS 142-3 No. FAS 142-3
  SFAS No. 161, Disclosures about Derivative
    Instruments and Hedging Activities, an amendment of FASB
    Statement No. 133
  SFAS No. 160, Non-Controlling Interest in
    Consolidated Financial Statements  an Amendment of
    ARB No. 51
 59




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##### Table of Contents



SFAS No. 141(R), Business Combinations Business
    Combinations. case-by-case
  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  Liquidity and
    Capital Resources.
  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
    
    Hanmi Financials disclosure controls and procedures were
    effective as of the end of the period covered by this
    report; and
    Hanmi Financials internal controls over financial
    reporting provide reasonable assurance regarding the reliability
    of financial reporting and the preparation of financial
    statements for external purposes in accordance with
    U.S. generally accepted accounting principles.       60




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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.    Internal Control-Integrated Framework


61




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##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
  The Board of Directors and
    Stockholders
 Hanmi Financial Corporation:
  Internal Control-Integrated Framework
        Internal Control-Integrated Framework
    KPMG
    LLP
  Los Angeles, California
 March 13, 2009
 62




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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 ofSecuritiesNumber of





RemainingSecurities





Available forto be


Weighted-


FutureIssued


Average


Issuance UnderUpon


Exercise


EquityExercise


Price of


Compensationof Outstanding


Outstanding


PlansOptions,


Options,


(ExcludingWarrants


Warrants


Securitiesand Rights


and Rights


Reflected(a)


(b)


in Column (a))Equity Compensation Plans Approved By Security Holders


1,323,467


$
14.05



3,000,000Equity Compensation Plans Not Approved By Security Holders





$




Total Equity Compensation Plans


1,323,467


$
14.05



3,000,000   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
 63




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##### Table of Contents



PART IV  Item 15.
    Exhibits,
    Financial Statement Schedules  (a)
    Financial Statements and Schedules       64




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##### Table of Contents



HANMI FINANCIAL
    CORPORATION AND SUBSIDIARIES
  INDEX TO
    CONSOLIDATED FINANCIAL STATEMENTS  PageReport of Independent Registered Public
    Accounting Firm


66Consolidated Balance Sheets as of
    December 31, 2008 and 2007


67Consolidated Statements of Operations for the
    Years Ended December 31, 2008, 2007 and 2006


68Consolidated Statements of Changes in
    Stockholders Equity and Comprehensive Income for the Years
    Ended December 31, 2008, 2007 and 2006


69Consolidated Statements of Cash Flows for the
    Years Ended December 31, 2008, 2007 and 2006


70Notes to Consolidated Financial Statements


71  65




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##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM  The Board of Directors and
    Stockholders
 Hanmi Financial Corporation:
        Internal Control-Integrated Framework
  
  Los Angeles, California
 March 13, 2009
 66




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##### Table of Contents



Hanmi Financial
    Corporation and Subsidiaries
 CONSOLIDATED BALANCE
    SHEETS  December 31,(Dollars in thousands)

2008


2007ASSETSCash and Due From Banks

$
85,188


$
105,898Federal Funds Sold


130,000



16,500Cash and Cash Equivalents


215,188



122,398Securities Held to Maturity, at Amortized Cost (Fair Value:
    2008  $910; 2007  $941)


910



940Securities Available for Sale, at Fair Value


196,966



349,517Loans Receivable, Net of Allowance for Loan Losses of $70,986
    and $43,611 at December 31, 2008 and 2007, Respectively


3,253,715



3,234,762Loans Held for Sale, at the Lower of Cost or Fair Value


37,410



6,335Customers Liability on Acceptances


4,295



5,387Premises and Equipment, Net


20,279



20,800Accrued Interest Receivable


12,347



17,411Other Real Estate Owned


823



287Deferred Income Taxes


29,456



18,470Servicing Assets


3,791



4,336Goodwill






107,100Other Intangible Assets


4,950



6,908Federal Home Loan Bank Stock, at Cost


30,697



21,746Federal Reserve Bank Stock, at Cost


10,228



11,733Bank-Owned Life Insurance


25,476



24,525Other Assets


29,285



31,002TOTAL ASSETS

$
3,875,816


$
3,983,657LIABILITIES AND STOCKHOLDERS EQUITYLIABILITIES:Deposits:Noninterest-Bearing

$
536,944


$
680,282Interest-Bearing:Savings


81,869



93,099Money Market Checking and NOW Accounts


370,401



445,806Time Deposits of $100,000 or More


849,800



1,441,683Other Time Deposits


1,231,066



340,829Total Deposits


3,070,080



3,001,699Accrued Interest Payable


18,539



21,828Acceptances Outstanding


4,295



5,387Federal Home Loan Bank Advances and Other Borrowings


422,983



487,164Junior Subordinated Debentures


82,406



82,406Other Liabilities


13,598



14,617Total Liabilities


3,611,901



3,613,101COMMITMENTS AND CONTINGENCIESSTOCKHOLDERS EQUITY:Common Stock, $0.001 Par Value; Authorized
    200,000,000 Shares; Issued 50,538,049 Shares
    (45,905,549 Shares Outstanding) and
    50,493,441 Shares (45,860,941 Shares Outstanding)
    at December 31, 2008 and 2007, Respectively


51



50Additional Paid-In Capital


349,304



348,073Unearned Compensation


(218
)


(245
)Accumulated Other Comprehensive Income  Unrealized
    Gain on Securities Available for Sale, Interest-Only Strips and
    Interest Rate Swaps, Net of Income Taxes of $473 and $527 at
    December 31, 2008 and 2007, Respectively


544



275Retained Earnings (Deficit)


(15,754
)


92,415Treasury Stock, at Cost (4,632,500 Shares at
    December 31, 2008 and 2007)


(70,012
)


(70,012
)Total Stockholders Equity


263,915



370,556TOTAL LIABILITIES AND STOCKHOLDERS EQUITY

$
3,875,816


$
3,983,657   See Accompanying Notes to
    Consolidated Financial Statements.
 67




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##### Table of Contents



Hanmi Financial
    Corporation and Subsidiaries
 CONSOLIDATED
    STATEMENTS OF OPERATIONS  Year Ended December 31,(Dollars in thousands, except per share data)

2008


2007


2006INTEREST AND DIVIDEND INCOME:Interest and Fees on Loans

$
223,942


$
261,992


$
239,075Taxable Interest on Investments


9,397



13,399



15,269Tax-Exempt Interest on Investments


2,717



3,055



3,087Dividends on Federal Home Loan Bank and Federal Reserve Bank
    Stock


1,918



1,413



1,354Interest on Federal Funds Sold


166



1,032



1,402Interest on Term Federal Funds Sold


43



5



2Total Interest and Dividend Income


238,183



280,896



260,189INTEREST EXPENSE:Interest on Deposits


84,353



108,517



93,553Interest on Federal Home Loan Bank Advances and Other Borrowings


14,373



13,949



6,977Interest on Junior Subordinated Debentures


5,056



6,644



6,416Total Interest Expense


103,782



129,110



106,946NET INTEREST INCOME BEFORE PROVISION FOR CREDIT LOSSES


134,401



151,786



153,243Provision for Credit Losses


75,676



38,323



7,173NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES


58,725



113,463



146,070NON-INTEREST INCOME:Service Charges on Deposit Accounts


18,463



18,061



17,134Insurance Commissions


5,067



4,954



770Trade Finance Fees


3,088



4,493



4,567Other Service Charges and Fees


2,365



2,527



2,359Remittance Fees


2,194



2,049



2,056Bank-Owned Life Insurance Income


952



933



879Gain on Sales of Loans


765



5,452



6,917Gain on Sales of Securities Available for Sale


77







2Other-Than-Temporary
    Impairment Loss on Securities


(3,115
)


(1,074
)


Other Income


2,293



2,611



2,279Total Non-Interest Income


32,149



40,006



36,963NON-INTEREST EXPENSE:Salaries and Employee Benefits


42,209



47,036



40,512Occupancy and Equipment


11,158



10,494



9,643Data Processing


5,799



6,390



5,857Professional Fees


3,539



2,468



1,910Advertising and Promotion


3,518



3,630



2,997Supplies and Communications


2,518



2,592



2,391Amortization of Other Intangible Assets


1,958



2,324



2,379Impairment Loss on Goodwill


107,393



102,891



Other Operating Expenses


16,230



12,104



11,624Total Non-Interest Expense


194,322



189,929



77,313INCOME (LOSS) BEFORE PROVISION (BENEFIT) FOR INCOME TAXES


(103,448
)


(36,460
)


105,720Provision (Benefit) for Income Taxes


(1,355
)


24,302



40,370NET INCOME (LOSS)

$
(102,093
)

$
(60,762
)

$
65,350EARNINGS (LOSS) PER SHARE:Basic

$
(2.23
)

$
(1.27
)

$
1.34Diluted

$
(2.23
)

$
(1.27
)

$
1.32WEIGHTED-AVERAGE SHARES OUTSTANDING:Basic


45,872,541



47,787,213



48,850,221Diluted


45,872,541



47,787,213



49,435,128DIVIDENDS DECLARED PER SHARE

$
0.09


$
0.24


$
0.20   See Accompanying Notes to
    Consolidated Financial Statements.
 68




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##### Table of Contents



Hanmi Financial
    Corporation and Subsidiaries
 CONSOLIDATED
    STATEMENTS OF CHANGES IN STOCKHOLDERS EQUITY AND
    COMPREHENSIVE INCOME  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(Dollars in thousands)

Outstanding


Shares


Outstanding


Stock


Capital


Compensation


Income (Loss)


(Deficit)


at Cost


EquityBALANCE AT JANUARY 1, 2006


49,821,798



(1,163,000
)


48,658,798


$
50


$
339,991


$
(1,150
)

$
(4,383
)

$
111,862


$
(20,041
)

$
426,329Cumulative Adjustment  Tax Credit Funds






























(656
)






(656
)Cumulative Adjustment  Share-Based Compensation


















(916
)


1,150















234Exercises of Stock Options and Stock Warrants


417,815







417,815







3,553



















3,553Share-Based Compensation Expense


















1,521



















1,521Tax Benefit from Exercise of Stock Options


















661



















661Cash Dividends






























(11,805
)






(11,805
)Comprehensive Income:Net Income






























65,350







65,350Change in Unrealized Gain on Securities Available for Sale,
    Interest-Only Strips and Interest Rate Swaps, Net of Income Taxes


























1,183











1,183Total Comprehensive Income






































66,533BALANCE AT DECEMBER 31, 2006


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 Loss: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
)

$
263,915   See Accompanying Notes to
    Consolidated Financial Statements.
 69




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##### Table of Contents



Hanmi Financial
    Corporation and Subsidiaries
 CONSOLIDATED
    STATEMENTS OF CASH FLOWS  Year Ended December 31,(In thousands)

2008


2007


2006CASH FLOWS FROM OPERATING ACTIVITIES:Net Income (Loss)

$
(102,093
)

$
(60,762
)

$
65,350Adjustments to Reconcile Net Income (Loss) to Net Cash Provided
    By Operating Activities:Depreciation and Amortization of Premises and Equipment


2,900



2,953



2,924Amortization of Premiums and Accretion of Discounts on
    Investments, Net


164



218



264Amortization of Other Intangible Assets


1,958



2,324



2,379Amortization of Servicing Assets


1,295



2,046



1,307Share-Based Compensation Expense


1,036



1,891



1,521Provision for Credit Losses


75,676



38,323



7,173Federal Home Loan Bank and Federal Reserve Bank Stock Dividends


(1,259
)


(708
)


(641
)Gain on Sales of Securities Available for Sale


(77
)






(2
)Other-Than-Temporary
    Impairment Loss on Securities


3,115



1,074



Gain on Sales of Loans


(765
)


(5,452
)


(6,917
)Gain on Sales of Other Real Estate Owned


324



(226
)


Impairment Loss on Goodwill


107,393



102,891



Excess Tax Benefit from Exercises of Stock Options






(193
)


(598
)Deferred Tax Benefit


(11,254
)


(14,618
)


(2,942
)Origination of Loans Held for Sale


(54,347
)


(108,639
)


(154,608
)Proceeds from Sales of Loans Held for Sale


24,037



131,626



138,720(Increase) Decrease in Accrued Interest Receivable


5,064



(492
)


(2,799
)Increase in Servicing Assets, Net


(750
)


(1,803
)


(1,976
)Increase in Cash Surrender Value of Bank-Owned Life Insurance


(951
)


(933
)


(879
)(Increase) Decrease in Other Assets


1,151



2,875



(9,300
)Increase (Decrease) in Accrued Interest Payable


(3,289
)


(754
)


10,671Increase (Decrease) in Other Liabilities


(5,573
)


3,158



(760
)Net Cash Provided By Operating Activities


43,755



94,821



48,909CASH FLOWS FROM INVESTING ACTIVITIES:Proceeds from Matured Term Federal Funds Sold






5,000



Proceeds from Redemption of Federal Home Loan Bank and Federal
    Reserve Bank Stock


4,074







617Proceeds from Matured or Called Securities Available for Sale


147,320



89,958



56,729Proceeds from Sales of Securities Available for Sale


28,501







5,005Proceeds from Sales of Other Real Estate Owned


2,128



1,306



Net Increase in Loans Receivable


(95,286
)


(461,297
)


(352,678
)Purchase of Term Federal Funds Sold










(5,000
)Purchases of Federal Home Loan Bank and Federal Reserve Bank
    Stock


(10,261
)


(7,849
)


(311
)Purchases of Securities Available for Sale


(25,339
)


(44,980
)


(9,663
)Purchases of Premises and Equipment


(2,379
)


(3,682
)


(2,237
)Business Acquisitions, Net of Cash Acquired






(1,727
)


Net Cash Provided By (Used In) Investing Activities


48,758



(423,271
)


(307,538
)CASH FLOWS FROM FINANCING ACTIVITIES:Increase in Deposits


68,381



56,984



118,601Proceeds from Exercises of Stock Options and Stock Warrants






1,164



3,553Excess Tax Benefit from Exercises of Stock Options






193



598Cash 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
)


(11,805
)Proceeds from Long-Term Federal Home Loan Bank Advances and
    Other Borrowings


250,000







130,000Repayment of Long-Term Federal Home Loan Bank Advances and Other
    Borrowings


(468
)


(443
)


(5,420
)Net Change in Short-Term Federal Home Loan Bank Advances and
    Other Borrowings


(313,713
)


318,546



(1,874
)Net Cash Provided By Financing Activities


277



312,347



233,653NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS


92,790



(16,103
)


(24,976
)Cash and Cash Equivalents at Beginning of Year


122,398



138,501



163,477CASH AND CASH EQUIVALENTS AT END OF YEAR

$
215,188


$
122,398


$
138,501SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:Cash Paid During the Period for:Interest Paid

$
107,071


$
129,864


$
117,100Income Taxes Paid

$
13,873


$
38,232


$
45,869Non-Cash Activities:Stock Issued for Business Acquisition

$
293


$
2,198


$
Transfer of Loans to Other Real Estate Owned

$
2,988


$
1,367


$
541Dividends Declared

$



$
3,030


$
2,941   See Accompanying Notes to
    Consolidated Financial Statements.
 70




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##### Table of Contents



Hanmi Financial
    Corporation and Subsidiaries
 NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTSDECEMBER 31, 2008, 2007 AND 2006 Note 1 
    Summary
    of Significant Accounting Policies  Summary of Operations
    Korean-American
    Basis of Presentation
    Principles of
    Consolidation
    Use of Estimates in
    the Preparation of Financial Statements
    Reclassifications
   71




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##### Table of Contents



Hanmi Financial
    Corporation and Subsidiaries
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
    DECEMBER 31, 2008, 2007 AND
    2006 (Continued)
   Note 1 
    Summary
    of Significant Accounting
    Policies(Continued)  Liquidity Risk
    Note 22  Liquidity.
  Cash and Cash
    Equivalents
    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.     72




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##### Table of Contents



Hanmi Financial
    Corporation and Subsidiaries
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
    DECEMBER 31, 2008, 2007 AND
    2006 (Continued)
   Note 1 
    Summary
    of Significant Accounting
    Policies(Continued)      Loans Receivable
        Loans Held for Sale
   73




---



##### Table of Contents



Hanmi Financial
    Corporation and Subsidiaries
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
    DECEMBER 31, 2008, 2007 AND
    2006 (Continued)
   Note 1 
    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 and/or
 74




---



##### Table of Contents



Hanmi Financial
    Corporation and Subsidiaries
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
    DECEMBER 31, 2008, 2007 AND
    2006 (Continued)
   Note 1 
    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
  Accounting for the
    Impairment or Disposal of Long-Lived Assets.
  Other Real Estate
    Owned
    Servicing Assets
  Accounting for Transfers and
    Servicing of Financial Assets and Extinguishments of
    Liabilities
     75




---



##### Table of Contents



Hanmi Financial
    Corporation and Subsidiaries
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
    DECEMBER 31, 2008, 2007 AND
    2006 (Continued)
   Note 1 
    Summary
    of Significant Accounting
    Policies(Continued)    Goodwill
  Goodwill and Other Intangible
    Assets,
    Other Intangible
    Assets
      Federal Home Loan
    Bank Stock
   76




---



##### Table of Contents



Hanmi Financial
    Corporation and Subsidiaries
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
    DECEMBER 31, 2008, 2007 AND
    2006 (Continued)
   Note 1 
    Summary
    of Significant Accounting
    Policies(Continued)  Federal Reserve Bank
    Stock
    Derivative
    Instruments
  Accounting for Derivative
    Instruments and Hedging Activities, as amended.
         77




---



##### Table of Contents



Hanmi Financial
    Corporation and Subsidiaries
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
    DECEMBER 31, 2008, 2007 AND
    2006 (Continued)
   Note 1 
    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
    Share-Based
    Compensation
  Share-Based
    Payment,
 78




---



##### Table of Contents



Hanmi Financial
    Corporation and Subsidiaries
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
    DECEMBER 31, 2008, 2007 AND
    2006 (Continued)
   Note 1 
    Summary
    of Significant Accounting
    Policies(Continued)  Accounting
    for Stock-Based Compensation. Accounting for Stock Issued to Employees,
  No. FAS 123R-3, Transition Election Related to Accounting for the Tax
    Effects of the Share-Based Payment Awards. No. FAS 123R-3
      Earnings (Loss) Per
    Share
    Treasury Stock
    Note 2 
    Fair
    Value Measurements  Fair Value Option
    and Fair Value Measurements
  Fair Value Measurements. No. FAS 157-2, Effective Date of FASB Statement No. 157. No. FAS 157-2
 79




---



##### Table of Contents



Hanmi Financial
    Corporation and Subsidiaries
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
    DECEMBER 31, 2008, 2007 AND
    2006 (Continued)
   Note 2 
    Fair
    Value
    Measurements(Continued)    The Fair Value Option for Financial Assets and
    Financial Liabilities.
  No. 157-3 ,
    Determining Fair Value of a Financial Asset in a Market
    That Is Not Active. No. 157-3 No. 157-3
  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.     Securities Available for Sale
  Loans Held for Sale
 80




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##### Table of Contents



Hanmi Financial
    Corporation and Subsidiaries
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
    DECEMBER 31, 2008, 2007 AND
    2006 (Continued)
   Note 2 
    Fair
    Value
    Measurements(Continued)  Impaired Loans Accounting by
    Creditors for Impairment of a Loan,
  Servicing Assets and Servicing Liabilities
  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,(In thousands)

Assets


Characteristics


Inputs


2008ASSETS:Securities Available for Sale:Mortgage-Backed Securities

$



$
78,860


$



$
78,860Municipal Bonds






58,313







58,313Collateralized Mortgage Obligations






36,162







36,162U.S. Government Agency Securities


17,700











17,700Other Securities


759



2,888



1,311



4,958Equity Securities


804











804Corporate Bonds






169







169Total Securities Available for Sale

$
19,263


$
176,392


$
1,311


$
196,966Servicing Assets

$



$



$
3,791


$
3,791LIABILITIES:Servicing Liabilities

$



$



$
238


$
238    81




---



##### Table of Contents



Hanmi Financial
    Corporation and Subsidiaries
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
    DECEMBER 31, 2008, 2007 AND
    2006 (Continued)
   Note 2 
    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,(In thousands)

2008


Settlements


in Earnings


Income


of Level 3


2008ASSETS:Securities Available for Sale:Other Securities

$
925


$



$



$
386


$



$
1,311Servicing Assets

$
4,336


$
405


$
(950
)

$



$



$
3,791LIABILITIES:Servicing Liabilities

$
266


$



$
(28
)

$



$



$
238   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,(In thousands)

Assets


Characteristics


Inputs


2008ASSETS:Loans Held for Sale

$



$
37,410


$



$
37,410Impaired Loans

$



$
2,404


$



$
2,404   Assets and
    Liabilities Not Measured at Fair Value on a Recurring or
    Non-Recurring Basis
  Disclosures About Fair Value of
    Instruments,
   82




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##### Table of Contents



Hanmi Financial
    Corporation and Subsidiaries
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
    DECEMBER 31, 2008, 2007 AND
    2006 (Continued)
   Note 2 
    Fair
    Value
    Measurements(Continued)  and/or
    December 31, 2008


December 31, 2007Carrying


Estimated


Carrying


Estimatedor Contract


Fair


or Contract


Fair(In thousands)

Amount


Value


Amount


ValueFINANCIAL ASSETS:Cash and Cash Equivalents

$
215,188


$
215,188


$
122,398


$
122,398Securities Held to Maturity


910



910



940



941Securities Available for Sale


196,966



196,966



349,517



349,517Loans Receivable, Net


3,251,311



3,246,955



3,234,762



3,232,165Accrued Interest Receivable


12,347



12,347



17,500



17,500Federal Home Loan Bank Stock


30,697



30,697



21,746



21,746Federal Reserve Bank Stock


10,228



10,228



11,733



11,733FINANCIAL LIABILITIES:Noninterest-Bearing Deposits


536,944



536,944



680,282



680,282Interest-Bearing Deposits


2,533,136



2,538,394



2,321,417



2,323,199FHLB Advances, Other Borrowings and Junior Subordinated
    Debentures


505,389



506,429



569,570



571,913Accrued Interest Payable


18,539



18,539



21,828



21,828OFF-BALANCE SHEET ITEMS:Commitments to Extend Credit


386,785



384



524,349



535Standby Letters of Credit


47,289



194



48,071



147     Cash and Cash Equivalents
  Securities
  Loans Receivable, Net
 83




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##### Table of Contents



Hanmi Financial
    Corporation and Subsidiaries
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
    DECEMBER 31, 2008, 2007 AND
    2006 (Continued)
   Note 2 
    Fair
    Value
    Measurements(Continued)  Accrued Interest Receivable
  Federal Home Loan Bank and Federal Reserve Bank
    Stock
  Noninterest-Bearing Deposits
  Interest-Bearing Deposits
  FHLB Advances, Other Borrowings and Junior Subordinated
    Debentures
  Accrued Interest Payable
  Commitments to Extend Credit and Standby Letters of
    Credit
  Note 3 
    Securities    Gross


Gross


EstimatedAmortized


Unrealized


Unrealized


Fair(In thousands)

Cost


Gain


Loss


ValueDecember 31, 2008:Municipal Bonds

$
695


$



$



$
695Mortgage-Backed Securities


215











215$
910


$



$



$
910December 31, 2007:Municipal Bonds

$
694


$



$



$
694Mortgage-Backed Securities


246



1







247$
940


$
1


$



$
941  84




---



##### Table of Contents



Hanmi Financial
    Corporation and Subsidiaries
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
    DECEMBER 31, 2008, 2007 AND
    2006 (Continued)
   Note 3 
    Securities(Continued)    Gross


Gross


EstimatedAmortized


Unrealized


Unrealized


Fair(In thousands)

Cost


Gain


Loss


ValueDecember 31, 2008:Mortgage-Backed Securities

$
77,515


$
1,536


$
191


$
78,860Municipal Bonds


58,987



413



1,087



58,313Collateralized Mortgage Obligations


36,204



137



179



36,162U.S. Government Agency Securities


17,580



120







17,700Other Securities


4,684



386



112



4,958Equity Securities


511



293







804Corporate Bonds


355







186



169$
195,836


$
2,885


$
1,755


$
196,966December 31, 2007:Mortgage-Backed Securities

$
99,332


$
533


$
667


$
99,198Municipal Bonds


69,907



1,867



23



71,751Collateralized Mortgage Obligations


51,881



128



591



51,418U.S. Government Agency Securities


104,893



277



81



105,089Other Securities


3,925







90



3,835Corporate Bonds


18,295



43



112



18,226$
348,233


$
2,848


$
1,564


$
349,517     Available for Sale


Held to MaturityAmortized


Estimated


Amortized


Estimated(In thousands)

Cost


Fair Value


Cost


Fair ValueWithin One Year

$
8,038


$
8,200


$



$
Over One Year Through Five Years


17,697



17,812







Over Five Years Through Ten Years


7,083



7,208



695



695Over Ten Years


48,788



47,920







Mortgage-Backed Securities


77,515



78,860



215



215Collateralized Mortgage Obligations


36,204



36,162







Equity Securities


511



804







$
195,836


$
196,966


$
910


$
910  85




---



##### Table of Contents



Hanmi Financial
    Corporation and Subsidiaries
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
    DECEMBER 31, 2008, 2007 AND
    2006 (Continued)
   Note 3 
    Securities(Continued)  Accounting
    for Certain Investments in Debt and Equity Securities, No. FAS 115-1 No. FAS 124-1, The Meaning of Other-Than-Temporary Impairment and Its
    Application to Certain Investments,
        Holding PeriodLess than 12 Months


12 Months or More


TotalUnrealized


Estimated


Unrealized


Estimated


Unrealized


Estimated(In thousands)

Losses


Fair Value


Losses


Fair Value


Losses


Fair ValueAvailable for Sale  December 31, 2008:Mortgage-Backed Securities

$
158


$
10,631


$
33


$
5,277


$
191


$
15,908Municipal Bonds


968



35,614



119



1,749



1,087



37,363Collateralized Mortgage Obligations


36



4,569



143



5,903



179



10,472Other Securities


72



929



40



1,960



112



2,889Corporate Bonds


186



169











186



169$
1,420


$
51,912


$
335


$
14,889


$
1,755


$
66,801Available for Sale  December 31, 2007:Mortgage-Backed Securities

$
31


$
5,319


$
636


$
42,143


$
667


$
47,462Municipal Bonds










23



2,910



23



2,910Collateralized Mortgage Obligations










591



40,167



591



40,167U.S. Government Agency Securities










81



46,895



81



46,895Other Securities










90



2,910



90



2,910Corporate Bonds










112



7,834



112



7,834$
31


$
5,319


$
1,533


$
142,859


$
1,564


$
148,178  86




---



##### Table of Contents



Hanmi Financial
    Corporation and Subsidiaries
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
    DECEMBER 31, 2008, 2007 AND
    2006 (Continued)
   Note 3 
    Securities(Continued)       87




---



##### Table of Contents



Hanmi Financial
    Corporation and Subsidiaries
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
    DECEMBER 31, 2008, 2007 AND
    2006 (Continued)
  Note 4 
    Loans  Loans Receivable
    December 31,(In thousands)

2008


2007Real Estate Loans:Commercial Property

$
908,970


$
795,675Construction


178,783



215,857Residential Property


92,361



90,065Total Real Estate Loans


1,180,114



1,101,597Commercial and Industrial Loans:Commercial Term Loans


1,611,449



1,599,853Commercial Lines of Credit


214,699



256,978SBA Loans


140,989



112,503International Loans


95,185



119,360Total Commercial and Industrial Loans


2,062,322



2,088,694Consumer Loans


83,525



90,449Total Gross Loans


3,325,961



3,280,740Allowance for Loans Losses


(70,986
)


(43,611
)Deferred Loan Fees


(1,260
)


(2,367
)Loans Receivable, Net

$
3,253,715


$
3,234,762    88




---



##### Table of Contents



Hanmi Financial
    Corporation and Subsidiaries
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
    DECEMBER 31, 2008, 2007 AND
    2006 (Continued)
   Note 4 
    Loans(Continued)  Allowance for Loan
    Losses and Allowance for Off-Balance Sheet Items
    As of and for the Year Ended December 31,2008


2007


2006Allowance





Allowance





Allowancefor Off-





for Off-





for Off-Allowance


Balance


Allowance


Balance


Allowance


Balancefor Loan


Sheet


for Loan


Sheet


for Loan


Sheet(In thousands)

Losses


Items


Losses


Items


Losses


ItemsBalance at Beginning of Year

$
43,611


$
1,765


$
27,557


$
2,130


$
24,963


$
2,130Provision Charged to Operating Expense


73,345



2,331



38,688



(365
)


7,173



Loans Charged Off


(48,152
)






(23,330
)






(6,129
)


Recoveries


2,182







696







1,550



Balance at End of Year

$
70,986


$
4,096


$
43,611


$
1,765


$
27,557


$
2,130   Impaired Loans
    As of and for the Year Ended December 31,(In thousands)

2008


2007


2006Recorded Investment With Related Allowance

$
71,448


$
38,930


$
10,616Recorded Investment With No Related Allowance


49,945



15,202



3,868Allowance on Impaired Loans


(18,157
)


(11,829
)


(6,731
)Net Recorded Investment in Impaired Loans

$
103,236


$
42,303


$
7,753Average Total Recorded Investment in Impaired Loans

$
149,680


$
61,249


$
19,287     Year Ended December 31,(In thousands)

2008


2007


2006Interest Income That Would Have Been Recognized Had Impaired
    Loans Performed in Accordance With Their Original Terms

$
7,327


$
4,672


$
1,726Less: Interest Income Recognized on Impaired Loans on a Cash
    Basis


(5,422
)


(3,705
)


(1,146
)Interest Foregone on Impaired Loans

$
1,905


$
967


$
580    89




---



##### Table of Contents



Hanmi Financial
    Corporation and Subsidiaries
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
    DECEMBER 31, 2008, 2007 AND
    2006 (Continued)
   Note 4 
    Loans(Continued)  Non-Performing Assets
    December 31,(In thousands)

2008


2007Non-Accrual Loans

$
120,823


$
54,252Loans 90 Days or More Past Due and Still Accruing


1,075



227Total Non-Performing Loans


121,898



54,479Other Real Estate Owned


823



287Total Non-Performing Assets

$
122,721


$
54,766         Restructured Loans
    Servicing Assets
    December 31,(In thousands)

2008


2007Balance at Beginning of Year

$
4,336


$
4,579Additions


405



1,821Changes in Valuation Allowance


345



(18
)Amortization


(1,295
)


(2,046
)Balance at End of Year

$
3,791


$
4,336  90




---



##### Table of Contents



Hanmi Financial
    Corporation and Subsidiaries
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
    DECEMBER 31, 2008, 2007 AND
    2006 (Continued)
   Note 4 
    Loans(Continued)    Note 5 
    Premises
    and Equipment    December 31,(In thousands)

2008


2007Land

$
6,120


$
6,120Buildings and Improvements


8,790



8,433Furniture and Equipment


14,528



13,783Leasehold Improvements


10,956



10,141Software


862



86241,256



39,339Accumulated Depreciation and Amortization


(20,977
)


(18,539
)Total Premises and Equipment, Net

$
20,279


$
20,800     Note 6 
    Goodwill    As of and for the Year EndedDecember 31,(In thousands)

2008


2007Balance at Beginning of Year

$
107,100


$
207,646Acquired Goodwill


293



2,345Impairment Loss on Goodwill


(107,393
)


(102,891
)Balance at End of Year

$



$
107,100   Acquired Goodwill
   91




---



##### Table of Contents



Hanmi Financial
    Corporation and Subsidiaries
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
    DECEMBER 31, 2008, 2007 AND
    2006 (Continued)
   Note 6 
    Goodwill(Continued)  Impairment Loss on
    Goodwill
    Note 7 
    Other
    Intangible Assets    December 31, 2008


December 31, 2007Gross





Net


Gross





NetAmortization


Carrying


Accumulated


Carrying


Carrying


Accumulated


Carrying(In thousands)

Period


Amount


Amortization


Amount


Amount


Amortization


AmountOther Intangible Assets:Core Deposit Intangible


8 years


$
13,137


$
(10,538
)

$
2,599


$
13,137


$
(8,865
)

$
4,272Trade Names


20 years



970



(97
)


873



970



(48
)


922Client/Insured Relationships


10 years



770



(154
)


616



770



(77
)


693Non-Compete Agreements


5 years



600



(240
)


360



600



(120
)


480Carrier Relationships


15 years



580



(78
)


502



580



(39
)


541Total Other Intangible Assets





$
16,057


$
(11,107
)

$
4,950


$
16,057


$
(9,149
)

$
6,908       Year EndingDecember 31,(In thousands)

Amount2009

$
1,5682010

$
1,1492011

$
7002012

$
1982013

$
165    92




---



##### Table of Contents



Hanmi Financial
    Corporation and Subsidiaries
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
    DECEMBER 31, 2008, 2007 AND
    2006 (Continued)
  Note 8 
    Deposits    TimeDeposits


OtherYear Ending

of $100,000


TimeDecember 31,

or More


Deposits


Total(In thousands)2009

$
823,015


$
1,106,010


$
1,929,0252010


26,499



124,934



151,4332011


182



84



2662012






4



42013










Thereafter


104



34



138Total

$
849,800


$
1,231,066


$
2,080,866     Year Ended December 31,(In thousands)

2008


2007


2006Savings

$
2,093


$
2,004


$
1,853Money Market Checking and NOW Accounts


19,909



15,446



14,539Time Deposits of $100,000 or More


43,598



75,516



64,184Other Time Deposits


18,753



15,551



12,977Total Interest Expense on Deposits

$
84,353


$
108,517


$
93,553       Note 9 
    FHLB
    Advances and Other Borrowings    December 31,(In thousands)

2008


2007FHLB Advances

$
422,196


$
432,664Federal Funds Purchased






50,000Note Issued to U.S. Treasury


787



4,500Total FHLB Advances and Other Borrowings

$
422,983


$
487,164  93




---



##### Table of Contents



Hanmi Financial
    Corporation and Subsidiaries
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
    DECEMBER 31, 2008, 2007 AND
    2006 (Continued)
   Note 9 
    FHLB
    Advances and Other
    Borrowings(Continued)    Year of Maturity

December 31, 2008


December 31, 2007Weighted-





Weighted-Average





AverageInterest





Interest(Dollars in thousands)

Amount


Rate


Amount


Rate2008

$







$
415,000



4.72
%2009


161,000



1.71
%


6,000



5.63
%2010


6,908



4.44
%


7,084



4.44
%2011


150,000



0.76
%






2012














2013


100,000



0.67
%






Thereafter


4,288



5.27
%


4,580



5.27
%$
422,196



1.21
%

$
432,664



4.73
%     Year Ended December 31,(Dollars in thousands)

2008


2007


2006Weighted-Average Interest Rate at End of Year


1.21
%


4.73
%


5.20
%Weighted-Average Interest Rate During the Year


2.81
%


5.11
%


5.02
%Average Balance of FHLB Advances

$
498,875


$
237,733


$
123,295Maximum Amount Outstanding at Any Month-End

$
597,472


$
432,664


$
168,250         Note 10 
    Junior
    Subordinated Debentures   94




---



##### Table of Contents



Hanmi Financial
    Corporation and Subsidiaries
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
    DECEMBER 31, 2008, 2007 AND
    2006 (Continued)
   Note 10 
    Junior
    Subordinated
    Debentures(Continued)    Note 14 
    Regulatory Matters
    Note 11 
    Income
    Taxes  Accounting for
    Uncertainty in Income Taxes an interpretation of FASB
    Statement No. 109.
      December 31,(In thousands)

2008


2007Unrecognized Tax Benefits at Beginning of Year

$
1,032


$
794Gross Increases for Tax Positions of Prior Years


960



40Gross Decreases for Tax Positions of Prior Years






Increases in Tax Positions for Current Year


131



198Settlements






Lapse in Statute of Limitations


(686
)


Unrecognized Tax Benefits at End of Year

$
1,437


$
1,032  95




---



##### Table of Contents



Hanmi Financial
    Corporation and Subsidiaries
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
    DECEMBER 31, 2008, 2007 AND
    2006 (Continued)
   Note 11 
    Income
    Taxes(Continued)            Year Ended December 31,(In thousands)

2008


2007


2006Current Expense:Federal

$
7,020


$
30,074


$
34,298State


2,879



8,846



9,0149,899



38,920



43,312Deferred Expense:Federal


(7,590
)


(10,791
)


(2,222
)State


(3,664
)


(3,827
)


(720
)(11,254
)


(14,618
)


(2,942
)Provision (Benefit) for Income Taxes

$
(1,355
)

$
24,302


$
40,370  96




---



##### Table of Contents



Hanmi Financial
    Corporation and Subsidiaries
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
    DECEMBER 31, 2008, 2007 AND
    2006 (Continued)
   Note 11 
    Income
    Taxes(Continued)    December 31,(In thousands)

2008


2007Deferred Tax Assets:Credit Loss Provision

$
35,792


$
20,800Depreciation


2,170



1,729State Taxes






1,594Other


962



2,133Total Deferred Tax Assets


38,924



26,256Deferred Tax Liabilities:Purchase Accounting


(4,559
)


(5,464
)State Taxes


(2,337
)


Unrealized Gain on Securities Available for Sale, Interest-Only
    Strips and Interest Rate Swaps


(471
)


(527
)Other


(2,101
)


(1,795
)Total Deferred Tax Liabilities


(9,468
)


(7,786
)Net Deferred Tax Assets

$
29,456


$
18,470       Year Ended December 31,2008


2007


2006Federal Statutory Income Tax Rate


35.0
%


(35.0
)%


35.0
%State Taxes, Net of Federal Tax Benefits


0.5
%


9.1
%


5.8
%Tax-Exempt Municipal Securities


0.9
%


(3.0
)%


(1.0
)%Other


1.2
%


(4.3
)%


(1.6
)%Impairment Loss on Goodwill


(36.3
)%


99.9
%


Effective Tax Rate


1.3
%


66.7
%


38.2
%    97




---



##### Table of Contents



Hanmi Financial
    Corporation and Subsidiaries
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
    DECEMBER 31, 2008, 2007 AND
    2006 (Continued)
  Note 12 
    Share-Based
    Compensation        Year Ended December 31,2008


2007


2006Share-Based Compensation Expense

$
1,036


$
1,891


$
1,521Related Tax Benefits

$
436


$
795


$
640     Unrecognized


Average Expected(Dollars in thousands)

Expense


Recognition PeriodStock Option Awards

$
1,976



2.2 yearsRestricted Stock Awards


218



3.9 yearsTotal Unrecognized Share-Based Compensation Expense

$
2,194



2.4 years   2007 Equity
    Compensation Plan
  Stock Options
      Year Ended December 31,2008


2007


2006Weighted-Average Estimated Fair Value Per Share of Options
    Granted

$
1.54


$
4.49


$
6.23  98




---



##### Table of Contents



Hanmi Financial
    Corporation and Subsidiaries
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
    DECEMBER 31, 2008, 2007 AND
    2006 (Continued)
   Note 12 
    Share-Based
    Compensation(Continued)    Year Ended December 31,2008


2007


2006Weighted-Average Assumptions:Dividend Yield


1.78
%


1.68
%


1.26
%Expected Volatility


35.89
%


29.98
%


34.79
%Expected Term


3.1 years



4.9 years



4.6 yearsRisk-Free Interest Rate


3.04
%


4.29
%


4.85
%       Year Ended December 31,(In thousands)

2008


2007


2006Grant Date Fair Value of Options Granted

$
216


$
596


$
5,940Fair Value of Options Vested

$
1,249


$
1,590


$
695Total Intrinsic Value of Options Exercised
    (1)

$



$
1,197


$
2,874Cash Received from Options Exercised

$



$
1,145


$
2,032Actual Tax Benefit Realized from Tax Deductions on Options
    Exercised

$



$
317


$
661   (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 31,2008


2007


2006Weighted-





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


1,472,766


$
15.33



1,755,813


$
15.31



1,173,712


$
10.55Options Granted


140,000


$
6.28



132,667


$
15.05



953,000


$
19.17Options Exercised





$




(130,647
)

$
8.76



(257,759
)

$
7.88Options Forfeited


(208,467
)

$
17.36



(256,267
)

$
18.22



(111,540
)

$
15.39Options Expired


(80,832
)

$
15.33



(28,800
)

$
16.90



(1,600
)

$
14.03Options Outstanding at End of Year


1,323,467


$
14.05



1,472,766


$
15.33



1,755,813


$
15.31Options Exercisable at End of Year


778,245


$
13.51



617,634


$
12.48



471,903


$
8.55  99




---



##### Table of Contents



Hanmi Financial
    Corporation and Subsidiaries
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
    DECEMBER 31, 2008, 2007 AND
    2006 (Continued)
   Note 12 
    Share-Based
    Compensation(Continued)    Year Ended December 31,2008


2007


2006Weighted-





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


855,132


$
5.47



1,283,910


$
5.53



653,110


$
3.68Options Granted


140,000


$
1.54



132,667


$
4.49



953,000


$
6.23Options Vested


(241,443
)

$
5.17



(305,178
)

$
5.21



(210,660
)

$
3.30Options Forfeited


(208,467
)

$
4.92



(256,267
)

$
5.57



(111,540
)

$
4.90Non-Vested Options Outstanding at End of Year


545,222


$
4.79



855,132


$
5.47



1,283,910


$
5.53     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)$3.27 to $4.99


128,184


$



$
3.89



1.7 years



128,184


$



$
3.89



1.7 years$5.00 to $9.99


203,096






$
6.65



7.0 years



79,096






$
7.22



3.1 years$10.00 to $14.99


319,700






$
13.51



5.2 years



249,700






$
13.51



5.2 years$15.00 to $19.99


534,487






$
17.68



7.3 years



223,265






$
17.71



7.2 years$20.00 to $21.63


138,000






$
21.58



7.9 years



98,000






$
21.62



7.9 years1,323,467


$



$
14.05



6.3 years



778,245


$



$
13.51



5.3 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
   100




---



##### Table of Contents



Hanmi Financial
    Corporation and Subsidiaries
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
    DECEMBER 31, 2008, 2007 AND
    2006 (Continued)
   Note 12 
    Share-Based
    Compensation(Continued)    Year Ended December 31,2008


2007


2006Weighted-





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


19,000


$
13.48






$







$
Restricted Stock Granted


10,000


$
6.68



19,000


$
13.48






$
Restricted Stock Forfeited


(5,000
)

$
8.21






$







$
Restricted Stock at End of Year


24,000


$
11.74



19,000


$
13.48






$
   2004
    CEO Stock Option Plan
  Stock Options
      Year Ended December 31,2008


2007


2006Number


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


$
17.17



350,000


$
17.17Options Forfeited





$




(233,334
)

$
17.17






$
Options Repurchased





$




(116,666
)

$
17.17






$
Options Outstanding at End of Year





$







$




350,000


$
17.17Options Exercisable at End of Year





$







$




58,333


$
17.17  101




---



##### Table of Contents



Hanmi Financial
    Corporation and Subsidiaries
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
    DECEMBER 31, 2008, 2007 AND
    2006 (Continued)
   Note 12 
    Share-Based
    Compensation(Continued)    Year Ended December 31,2008


2007


2006Number


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


$
4.82



350,000


$
4.82Options Forfeited





$




(233,334
)

$
4.82






$
Options Vested





$




(58,333
)

$
4.82



(58,333
)

$
4.82Non-Vested Options Outstanding at End of Year





$







$




291,667


$
4.82   Restricted Stock
    Awards
      Year Ended December 31,2008


2007


2006Weighted-





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


$
18.15



80,000


$
18.15Restricted Stock Vested





$




(60,000
)

$
18.15



(20,000
)

$
18.15Restricted Stock at End of Year





$







$




60,000


$
18.15    Note 13 
    Stockholders
    Equity  Stock Warrants
   102




---



##### Table of Contents



Hanmi Financial
    Corporation and Subsidiaries
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
    DECEMBER 31, 2008, 2007 AND
    2006 (Continued)
   Note 13 
    Stockholders
    Equity(Continued)  Repurchase of Common
    Stock
    Note 14 
    Regulatory
    Matters  Risk-Based Capital
       103




---



##### Table of Contents



Hanmi Financial
    Corporation and Subsidiaries
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
    DECEMBER 31, 2008, 2007 AND
    2006 (Continued)
   Note 14 
    Regulatory
    Matters(Continued)    Minimum


Minimum to BeRegulatory


Categorized asActual


Requirement


Well Capitalized(Dollars in thousands)

Amount


Ratio


Amount


Ratio


Amount


RatioDecember 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
%December 31, 2007Total Capital (to Risk-Weighted Assets):Hanmi Financial

$
380,057



10.65
%

$
285,417



8.00
%


N/A



N/AHanmi Bank

$
377,613



10.59
%

$
285,137



8.00
%

$
356,422



10.00
%Tier 1 Capital (to Risk-Weighted Assets):Hanmi Financial

$
335,451



9.40
%

$
142,708



4.00
%


N/A



N/AHanmi Bank

$
333,050



9.34
%

$
142,569



4.00
%

$
213,853



6.00
%Tier 1 Capital (to Average Assets):Hanmi Financial

$
335,451



8.52
%

$
157,513



4.00
%


N/A



N/AHanmi Bank

$
333,050



8.47
%

$
157,372



4.00
%

$
196,715



5.00
%   Reserve Requirement
    Memorandum of
    Understanding
   104




---



##### Table of Contents



Hanmi Financial
    Corporation and Subsidiaries
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
    DECEMBER 31, 2008, 2007 AND
    2006 (Continued)
   Note 14 
    Regulatory
    Matters(Continued)      Troubled Asset
    Relief Program
         105




---



##### Table of Contents



Hanmi Financial
    Corporation and Subsidiaries
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
    DECEMBER 31, 2008, 2007 AND
    2006 (Continued)
   Note 14 
    Regulatory
    Matters(Continued)  Capital Plan
    Note 15 
    Earnings
    (Loss) Per Share      Weighted-Income


Average


Per(Loss)


Shares


Share(Dollars in thousands, except per share amounts)

(Numerator)


(Denominator)


AmountYear 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
)Year Ended December 31, 2006:Basic EPS  Income Available to Common Stockholders

$
65,350



48,850,221


$
1.34Effect of Dilutive Securities  Options and Warrants






584,907



(0.02
)Diluted EPS  Income Available to Common Stockholders

$
65,350



49,435,128


$
1.32    106




---



##### Table of Contents



Hanmi Financial
    Corporation and Subsidiaries
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
    DECEMBER 31, 2008, 2007 AND
    2006 (Continued)
  Note 16 
    Employee
    Benefits  401(k) Plan
    Bank-Owned Life
    Insurance
    Deferred
    Compensation Plan
    Note 17 
    Commitments
    and Contingencies  Lease Commitments
    Year Ending

AmountDecember 31,

(In thousands)2009

$
5,3822010


5,0482011


4,1382012


3,2952013


2,742Thereafter


6,479Total

$
27,084     Litigation
   107




---



##### Table of Contents



Hanmi Financial
    Corporation and Subsidiaries
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
    DECEMBER 31, 2008, 2007 AND
    2006 (Continued)
   Note 17 
    Commitments
    and
    Contingencies(Continued)    Note 18 
    Off-Balance
    Sheet Commitments  case-by-case
    December 31,(In thousands)

2008


2007Commitments to Extend Credit

$
386,785


$
524,349Standby Letters of Credit


47,289



48,071Commercial Letters of Credit


29,177



52,544Unused Credit Card Lines


16,912



18,622Total Undisbursed Loan Commitments

$
480,163


$
643,586   Note 19 
    Segment
    Reporting    Note 20 
    Correction
    of Immaterial Errors in Prior Periods   108




---



##### Table of Contents



Hanmi Financial
    Corporation and Subsidiaries
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
    DECEMBER 31, 2008, 2007 AND
    2006 (Continued)
   Note 20 
    Correction
    of Immaterial Errors in Prior
    Periods(Continued)    CONSOLIDATED
    BALANCE SHEET
  December 31, 2007AsPreviously





As(In thousands)

Reported


Adjustments


RestatedAccrued Interest Receivable

$
17,500


$
(89
)

$
17,411Total Assets

$
3,983,746


$
(89
)

$
3,983,657Other Liabilities

$
13,717


$
900


$
14,617Total Liabilities

$
3,612,201


$
900


$
3,613,101Retained Earnings

$
93,404


$
(989
)

$
92,415Total Stockholders Equity

$
371,545


$
(989
)

$
370,556Total Liabilities and Stockholders Equity

$
3,983,746


$
(89
)

$
3,983,657   CONSOLIDATED
    STATEMENTS OF OPERATIONS
  Year Ended December 31, 2007


Year Ended December 31, 2006As








AsPreviously





As


Previously





As(Dollars in thousands, except per share data)

Reported


Adjustments


Restated


Reported


Adjustments


RestatedInterest on Deposits

$
108,100


$
417


$
108,517


$
93,036


$
517


$
93,553Total Interest Expense

$
128,693


$
417


$
129,110


$
106,429


$
517


$
106,946Net Interest Income Before Provision for Credit Losses

$
152,203


$
(417
)

$
151,786


$
153,760


$
(517
)

$
153,243Net Interest Income After Provision for Credit Losses

$
113,880


$
(417
)

$
113,463


$
146,587


$
(517
)

$
146,070Income (Loss) Before Provision for Income Taxes

$
(36,043
)

$
(417
)

$
(36,460
)

$
106,237


$
(517
)

$
105,720Provision for Income Taxes

$
24,477


$
(175
)

$
24,302


$
40,588


$
(218
)

$
40,370Net Income (Loss)

$
(60,520
)

$
(242
)

$
(60,762
)

$
65,649


$
(299
)

$
65,350Earnings (Loss) Per Share:Basic

$
(1.27
)

$



$
(1.27
)

$
1.34


$



$
1.34Diluted

$
(1.27
)

$



$
(1.27
)

$
1.33


$
(0.01
)

$
1.32   109




---



##### Table of Contents



Hanmi Financial
    Corporation and Subsidiaries
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
    DECEMBER 31, 2008, 2007 AND
    2006 (Continued)
  Note 21 
    Cumulative-Effect
    Adjustment From the Adoption of EITF Issue
    No. 06-4  No. 06-4, Accounting for Deferred Compensation and Postretirement
    Benefit Aspects of Endorsement Split Dollar Life Insurance
    Arrangements, Employers Accounting for
    Postretirement Benefits Other Than Pensions, No. 06-4
  Note 22 
    Liquidity      Borrower-in-Custody
   110




---



##### Table of Contents



Hanmi Financial
    Corporation and Subsidiaries
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
    DECEMBER 31, 2008, 2007 AND
    2006 (Continued)
   Note 22 
    Liquidity(Continued)              Note 23 
    Retirement
    and Resignation of Directors  Retirement of
    Directors
   111




---



##### Table of Contents



Hanmi Financial
    Corporation and Subsidiaries
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
    DECEMBER 31, 2008, 2007 AND
    2006 (Continued)
   Note 23 
    Retirement
    and Resignation of
    Directors(Continued)  and/or
  Resignation of
    Directors
    Note 24 
    Condensed
    Financial Information of Parent Company  BALANCE
    SHEETS
  December 31,(In thousands)

2008


2007ASSETSCash

$
2,167


$
5,296Securities Available for Sale


804



Investment in Consolidated Subsidiaries


340,297



447,668Investment in Trust Preferred Securities


2,475



2,475Other Assets


1,738



1,543Total Assets

$
347,481


$
456,982LIABILITIES AND STOCKHOLDERS EQUITYLiabilities:Junior Subordinated Debentures

$
82,406


$
82,406Other Liabilities


1,160



4,020Stockholders Equity


263,915



370,556Total Liabilities and Stockholders Equity

$
347,481


$
456,982  112




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##### Table of Contents



Hanmi Financial
    Corporation and Subsidiaries
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
    DECEMBER 31, 2008, 2007 AND
    2006 (Continued)
   Note 24 
    Condensed
    Financial Information of Parent
    Company(Continued)  STATEMENTS OF
    OPERATIONS
  Year Ended December 31,(In thousands)

2008


2007


2006Equity in Earnings (Losses) of Subsidiaries

$
(97,040
)

$
(54,500
)

$
70,858Other Expenses, Net


(8,610
)


(10,155
)


(9,266
)Income Tax Benefit


3,557



3,893



3,758Net Income (Loss)

$
(102,093
)

$
(60,762
)

$
65,350  112.1




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##### Table of Contents



Hanmi Financial
    Corporation and Subsidiaries
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
    DECEMBER 31, 2008, 2007 AND
    2006 (Continued)
   Note 24 
    Condensed
    Financial Information of Parent
    Company(Continued)  STATEMENTS OF
    CASH FLOWS
  Year Ended December 31,(In thousands)

2008


2007


2006CASH FLOWS FROM OPERATING ACTIVITIES:Net Income (Loss)

$
(102,093
)

$
(60,762
)

$
65,350Adjustments to Reconcile Net Income (Loss) to Net Cash Used In
    Operating Activities:Losses (Earnings) of Subsidiaries


97,040



54,500



(70,858
)Share-Based Compensation Expense


1,036



1,891



1,521(Increase) Decrease in Other Assets


(706
)


3,139



(1,473
)Increase (Decrease) in Other Liabilities


(2,983
)


(208
)


659Tax Benefit from Exercises of Stock Options






317



661Net Cash Used In Operating Activities


(7,706
)


(1,123
)


(4,140
)CASH FLOWS FROM INVESTING ACTIVITIES:Dividends Received from Hanmi Bank


8,500



63,501



18,500Business Acquisitions, Net of Cash Received






(1,727
)


Net Cash Provided By Investing Activities


8,500



61,774



18,500CASH FLOWS FROM FINANCING ACTIVITIES:Proceeds from Exercise of Stock Options and Stock Warrants






1,164



3,553Cash 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
)


(11,805
)Net Cash Used In Financing Activities


(3,923
)


(62,933
)


(8,252
)NET INCREASE (DECREASE) IN CASH


(3,129
)


(2,282
)


6,108Cash at Beginning of Year


5,296



7,578



1,470CASH AT END OF YEAR

$
2,167


$
5,296


$
7,578   113




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##### Table of Contents



Hanmi Financial
    Corporation and Subsidiaries
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
    DECEMBER 31, 2008, 2007 AND
    2006 (Continued)
  Note 25 
    Quarterly
    Financial Data (Unaudited)    Quarter Ended(Dollars in thousands; except per share amounts)

March 31


June 30


September 30


December 312008: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 (Benefit) for Income Taxes


4,553



(104,952
)


5,514



(8,563
)Provision (Benefit) 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
)2007:Interest and Dividend Income

$
67,956


$
69,860


$
71,197


$
71,883Interest Expense


29,999



31,376



33,447



34,288Net Interest Income Before Provision for Credit Losses


37,957



38,484



37,750



37,595Provision for Credit Losses


6,132



3,023



8,464



20,704Non-Interest Income


9,987



10,692



9,526



9,801Non-Interest Expense


20,969



21,490



21,249



126,221Income (Loss) Before Provision for Income Taxes


20,843



24,663



17,563



(99,529
)Provision for Income Taxes


7,851



9,401



6,536



514NET INCOME (LOSS)

$
12,992


$
15,262


$
11,027


$
(100,043
)EARNINGS (LOSS) PER SHARE:Basic

$
0.27


$
0.32


$
0.23


$
(2.15
)Diluted

$
0.26


$
0.31


$
0.23


$
(2.15
)   Note 20  Correction of Immaterial
    Errors in Prior Periods
 114




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##### Table of Contents



Note 25 
    Quarterly
    Financial Data
    (Unaudited)(Continued)  SIGNATURES    HANMI FINANCIAL CORPORATION
     President and Chief Executive Officer
  Date: March 13, 2009
    /s/ Jay S. YooJay
    S. YooPresident and Chief Executive Officer 
    (Principal Executive Officer)

/s/ Brian E. ChoBrian
    E. ChoExecutive Vice President and Chief Financial Officer
    (Principal Financial and Accounting Officer)/s/ Joseph K. RhoJoseph
    K. RhoChairman of the Board

/s/ I Joon AhnI
    Joon AhnDirector/s/ John A. HallJohn
    A. HallDirector

/s/ Richard B. C. LeeRichard
    B. C. LeeDirector/s/ Joon Hyung LeeJoon
    Hyung LeeDirector

/s/ Paul (Seon-Hong) KimPaul
    (Seon-Hong) KimDirector  115




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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 Corporation3
.2

Certificate of Second Amendment of Certificate of Incorporation
    of Hanmi Financial Corporation3
.3

Amended and Restated Bylaws of Hanmi Financial Corporation3
.4

Certificate of Amendment to Bylaws of Hanmi Financial Corporation10
.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
    (3)10
.18

Separation Agreement between Hanmi Financial Corporation and
    Dr. Sung Won Sohn, dated December 27, 2007
    (4)10
.19

Employment Offer Letter to John Park from Hanmi Bank dated
    August 13, 2008
    (7)14


Code of Ethics
    (8)21


Subsidiaries of the Registrant
    (9)23


Consent of KPMG LLP 116




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##### Table of Contents



HANMI FINANCIAL
    CORPORATION AND SUBSIDIARIES
  EXHIBIT INDEX (Continued)
  ExhibitNumber

Document31
.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
    Registration Statement on
    Form S-4
    (No. 333-32770)
    filed with the SEC on March 20, 2000.(2)
    
    Previously filed and
    incorporated by reference herein from Hanmi Financials
    Current Report on
    Form 8-K
    filed with the SEC on November 26, 2007.(3)
    
    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.(4)
    
    Previously filed and
    incorporated by reference herein from Hanmi Financials
    Current Report on
    Form 8-K
    filed with the SEC on December 27, 2007.(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
    Quarterly Report on
    Form 10-Q
    for the quarter ended September 30, 2008 filed with the SEC
    on November 7 2008.(8)
    
    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.(9)
    
    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
    February 29, 2008. 117