##### 



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, 2007oro  TRANSITION
    REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
    EXCHANGE ACT OF 1934For
    the Transition Period
    From          To   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)    (Registrants
    Telephone Number, Including Area Code)
    Title of
    Each Class

Name of Each
    Exchange on Which RegisteredCommon Stock, $.001 Par Value

NASDAQ Global Select Market      (Title
    of Class)
  o þ
  o þ
  þ o
  Regulation S-K 10-K Form 10-K. þ
  Rule 12b-2
  Large accelerated filer
    þ

Accelerated filer
    o

Non-accelerated
    filer o
    (Do not check if a smaller reporting company)

Smaller reporting
    company o   Rule 12b-2 o þ
      Documents Incorporated By Reference Herein:




---



##### 



HANMI
    FINANCIAL CORPORATION
  Annual Report on
    Form 10-K
    for the Fiscal Year Ended December 31, 2007
  Table of Contents
  PageForward-Looking Statements


1PART IItem 1.


Business


1Item 1A.


Risk Factors


12Item 1B.


Unresolved Staff Comments


14Item 2.


Properties


15Item 3.


Legal Proceedings


16Item 4.


Submission of Matters to a Vote of Security Holders


16PART IIItem 5.


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


16Item 6.


Selected Financial Data


20Item 7.


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


22Item 7A.


Quantitative and Qualitative Disclosures About Market Risk


44Item 8.


Financial Statements and Supplementary Data


44Item 9.


Changes In and Disagreements With Accountants on Accounting and
    Financial Disclosure


44Item 9A.


Controls and Procedures


44Item 9B.


Other Information


47PART IIIItem 10.


Directors, Executive Officers and Corporate Governance


47Item 11.


Executive Compensation


47Item 12.


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


47Item 13.


Certain Relationships and Related Transactions, and Director
    Independence


47Item 14.


Principal Accounting Fees and Services


47PART IVItem 15.


Exhibits, Financial Statement Schedules


47Index to Consolidated Financial Statements


48Report of Independent Registered Public Accounting Firm


49Consolidated Balance Sheets as of December 31, 2007 and 2006


50Consolidated Statements of Operations for the Years Ended
    December 31, 2007, 2006 and 2005


51Consolidated Statements of Changes in Stockholders Equity
    and Comprehensive Income for the Years Ended December 31,
    2007, 2006 and 2005


52Consolidated Statements of Cash Flows for the Years Ended
    December 31, 2007, 2006 and 2005


53Notes to Consolidated Financial Statements


54Signatures


87Exhibit Index


88




---



##### 



FORWARD-LOOKING
    STATEMENTS  Item 1. Form 10-K
  
    changes in our borrowers performance on loans;
    changes in the commercial and consumer real estate markets;
    changes in our costs of operation, compliance and expansion;
    changes in the economy, including inflation;
    changes in government interest rate policies;
    changes in laws or the regulatory environment;
    changes in the equity and debt securities markets; and
    acts of terrorism or natural disasters such as earthquakes or
    floods.  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.
 PART I  Item 1.
    Business  General
  (213) 382-2200.
    Korean-American
   1




---



##### 



Year
    Ended December 31,(Dollars
    in thousands)

2007



2006


2005Interest and Fees on Loans

$
261,992



81.6%



$
239,075



80.5%


$
180,845



77.8%Interest on Investments


17,867



5.6%




19,710



6.6%



18,507



8.0%Other Interest Income


1,037



0.3%




1,404



0.5%



1,589



0.7%Service Charges on Deposit Accounts


18,061



5.6%




17,134



5.8%



15,782



6.8%Other Non-Interest Income


21,945



6.9%




19,829



6.6%



15,668



6.7%Total Revenues

$
320,902



100.0%



$
297,152



100.0%


$
232,391



100.0%   Market Area
    Korean-American
    Lending
    Activities
    Real
    Estate Loans
    Commercial
    Property
   2




---



##### 



The
    Wall Street Journal
    Construction
    
    maturities of two years or less;
    a floating rate of interest based on the Bank Prime Rate or the
    WSJ Prime Rate;
    minimum cash equity of 35 percent of project cost;
    reserve of anticipated interest costs during construction or
    advance of fees;
    first lien position on the underlying real estate;
    loan-to-value ratios 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.   3




---



##### 



Residential
    Property
    Commercial
    and Industrial Loans
      Commercial Term
    Loans
    Commercial Lines
    of Credit
    SBA
    Loans
     4




---



##### 



International
    Trade Finance
    Consumer
    Loans
      Off-Balance
    Sheet Commitments
    Lending
    Procedures and Loan Limits
      and/or
 5




---



##### 



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
    Website
  www.hanmi.com Form 10-K, Form 10-Q, Form 8-K Form 10-K.
  Employees
    Insurance
    Competition
  and/or
      Korean-American
 6




---



##### 



Economic
    Conditions, Government Policies, Legislation and Regulation
        Supervision
    and Regulation
  General
    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.
    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.
    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. 7




---



##### 



Non-Banking
    and Financial Activities
      Securities
    Registration
    The
    Sarbanes-Oxley Act
    
    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;
    restrict the Banks growth geographically, by products and
    services or by mergers and acquisitions;
    enter into informal nonpublic 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
     8




---



##### 



Interstate
    Banking and Branching
    Federal
    Home Loan Bank System
    Federal
    Reserve System
    Dividends
    and Other Transfers of Funds
  Item 5. Market
    for Registrants Common Equity, Related Stockholder Matters
    and Issuer Purchases of Equity Securities 
    Dividends
  Capital
    Standards
  Notes to
    Consolidated Financial Statements, Note 14 
    Regulatory Matters.
        Actual as
    ofRequirement

December 31,
    2007Adequately

Well

Hanmi

HanmiCapitalized

Capitalized

Bank

FinancialTotal Risk-Based Capital Ratio


8.0
%


10.0
%


10.59
%


10.65
%Tier 1 Risk-Based Capital Ratio


4.0
%


6.0
%


9.34
%


9.40
%Tier 1 Leverage Capital Ratio


4.0
%


5.0
%


8.47
%


8.52
%    9




---



##### 



FDIC
    Insurance
      Extensions
    of Credit to Insiders and Transactions with Affiliates
    
    a bank or bank holding companys executive officers,
    directors and principal shareholders (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 shareholder; or
    any political or campaign committee controlled by such executive
    officer, director or principal shareholder.    
    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.     10




---



##### 




    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 affiliate 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 nonaffiliated parties.    USA
    PATRIOT Act and Anti-Money Laundering Compliance
    Consumer
    Laws
    
    The Home Ownership and Equity Protection Act of 1994
    (HOEPA), which requires extra disclosures and consumer
    protections to borrowers from certain lending practices, such as
    practices deemed to be predatory lending.
    Privacy policies required by Federal and state banking laws and
    regulations, which limit the ability of banks and other
    financial institutions to disclose non-public information about
    consumers to non-affiliated third parties.
    The Fair Credit Reporting Act, as amended by the Fair and
    Accurate Credit Transactions Act (the FACT Act),
    which 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 (ECOA), which
    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 (TILA), which 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, which 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, which 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 last examination for CRA compliance,
    as of October 10, 2006, the Bank was rated
    Outstanding.
    The Home Mortgage Disclosure Act (HMDA), which
    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 (RESPA),
    which 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, which requires homes in
    flood-prone areas with mortgages from a federally regulated
    lender to have flood insurance. 11




---



##### 



Regulation
    of Subsidiaries
    Item 1A.
    Risk
    Factors    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.  Recent negative developments in the financial industry and
    U.S. and global credit markets may affect our operations
    and results.
  Our Southern California business focus and economic
    conditions in Southern California could adversely affect our
    operations.
  Our concentrations in commercial real estate loans located
    primarily in Southern California could have adverse effects on
    credit quality.
  Our earnings are affected by changing interest
    rates.
  If we cannot attract deposits, our growth may be
    inhibited.
  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.
 12




---



##### 



We may not be able to pay dividends in the
    future. Item 5. Market for Registrants Common
    Equity, Related Stockholder Matters and Issuer Purchases of
    Equity Securities
  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.
  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.
  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.
  Failure to manage our growth may adversely affect our
    performance.
 13




---



##### 



We continually encounter technological change, and we may
    have fewer resources than many of our competitors to continue to
    invest in technological improvements.
  We rely on communications, information, operating and
    financial control systems technology from third-party service
    providers, and we may suffer an interruption in those
    systems. and/or
  Negative publicity could damage our
    reputation.
  Our stock price can be volatile due to many
    factors.
  
    recommendations by securities analysts;
    operating and stock price performance of other companies that
    investors deem comparable to us;
    news reports relating to trends, concerns and other issues in
    the financial services industry;
    new technology used, or services offered, by our competitors;
    natural disasters, such as earthquakes; and
    geopolitical conditions such as acts or threats of terrorism or
    military conflicts.  Item 1B.
    Unresolved
    Staff Comments   14




---



##### 



Item 2.
    Properties      Owned/Office

Type of
    Office

Address

City/State

LeasedCorporate Headquarters

Headquarters(1)

3660 Wilshire Boulevard, Penthouse Suite A

Los Angeles, CA

LeasedCerritos Branch

Branch

11754 East Artesia Boulevard

Artesia, CA

LeasedDowntown Branch

Branch

950 South Los Angeles Street

Los Angeles, CA

LeasedFashion District Branch

Branch

726 East 12th Street, Suite 211

Los Angeles, CA

LeasedFullerton Branch

Branch

5245 Beach Boulevard

Buena Park, CA

LeasedGarden Grove Branch

Branch

9820 Garden Grove Boulevard

Garden Grove, CA

OwnedGardena Branch

Branch

2001 West Redondo Beach Boulevard

Gardena, CA

LeasedIrvine Branch

Branch

14474 Culver Drive, Suite D

Irvine, CA

LeasedKoreatown Galleria Branch

Branch

3250 West Olympic Boulevard, Suite 200

Los Angeles, CA

LeasedKoreatown Plaza Branch

Branch(2)

928 South Western Avenue, Suite 260

Los Angeles, CA

LeasedMid-Olympic Branch

Branch(3)

3099 West Olympic Boulevard

Los Angeles, CA

OwnedOlympic Branch

Branch(4)

3737 West Olympic Boulevard

Los Angeles, CA

OwnedRancho Cucamonga Branch

Branch

9759 Baseline Road

Rancho Cucamonga, CA

LeasedRowland Heights Branch

Branch

18720 East Colima Road

Rowland Heights, CA

LeasedSan Diego Branch

Branch

4637 Convoy Street, Suite 101

San Diego, CA

LeasedSan Francisco Branch

Branch

1491 Webster Street

San Francisco, CA

LeasedSilicon Valley Branch

Branch

2765 El Camino Real

Santa Clara, CA

LeasedSouth Cerritos Branch

Branch

11900 South Street, Suite 109

Cerritos, CA

LeasedTorrance Branch

Branch

2370 Crenshaw Boulevard, Suite H

Torrance, CA

LeasedVan Nuys Branch

Branch

14427 Sherman Way

Van Nuys, CA

LeasedVermont Branch

Branch(5)

933 South Vermont Avenue

Los Angeles, CA

OwnedWest Garden Grove Branch

Branch

9122 Garden Grove Boulevard

Garden Grove, CA

OwnedWest Torrance Branch

Branch

21838 Hawthorne Boulevard

Torrance, CA

LeasedWestern Branch

Branch

120 South Western Avenue

Los Angeles, CA

LeasedWilshire Branch

Main
    Branch(6)

3660 Wilshire Boulevard, Suite 103

Los Angeles, CA

LeasedCommercial Loan Department

Loan
    Office(1)

3660 Wilshire Boulevard, Suite 1050

Los Angeles, CA

LeasedSBA Loan Department

Loan
    Office(1)

3327 Wilshire Boulevard

Los Angeles, CA

LeasedAtlanta LPO

Loan
    Office(1)

3585 Peachtree Industrial Boulevard, Suite 144

Duluth, GA

LeasedChicago LPO

Loan
    Office(1)

6200 North Hiawatha, Suite 235

Chicago, IL

LeasedDallas LPO

Loan
    Office(1)

2711 LBJ Freeway, Suite 114

Farmers Branch, TX

LeasedDenver LPO

Loan
    Office(1)

3033 South Parker Road, Suite 340

Aurora, CO

LeasedNorthern California LPO

Loan
    Office(1)

39899 Balentine Drive, Suite 200

Newark, CA

LeasedNorthwest Region LPO

Loan
    Office(1)

3500 108th Avenue Northeast, Suite 280

Bellevue, WA

LeasedVirginia LPO

Loan
    Office(1)

7535 Little River Turnpike, Suite 200B

Annandale, VA

LeasedChun-Ha Insurance Services

Headquarters(1)

12912 Brookhurst Street, Suite 480

Garden Grove, CA

LeasedChun-Ha Insurance Services

Insurance
    Office(1)

3225 Wilshire Boulevard, Suite 1806

Los Angeles, CA

LeasedAll World Insurance Services

Headquarters(1)

12912 Brookhurst Street, Suite 480

Garden Grove, CA

Leased    (1)
    
    Deposits
    are not accepted at this facility.(2)
    
    Residential
    Mortgage Center is also located at this facility.(3)
    
    Auto
    Loan Center and Consumer Loan Center are also located at this
    facility.(4)
    
    Training
    Facility is also located at this facility.(5)
    
    Administrative
    offices are also located at this facility.(6)
    
    International
    Finance Department is also located at this facility.   15




---



##### 



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
    Dividend2007: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 share2006:Fourth Quarter

$
22.88


$
18.89


$
0.06 per shareThird Quarter

$
20.00


$
18.13


$
0.06 per shareSecond Quarter

$
20.46


$
17.09


$
0.06 per shareFirst Quarter

$
19.95


$
17.04


$
0.06 per share   Holders
    Dividends
       16




---



##### 



Securities
    Authorized for Issuance Under Equity Compensation Plans
   Number of
    SecuritiesRemaining
    Available forNumber of
    Securities to be


Weighted-Average


Future
    Issuance UnderIssued
    Upon Exercise of


Exercise
    Price of


Equity
    CompensationOutstanding
    Options,


Outstanding
    Options,


Plans
    (Excluding SecuritiesWarrants
    and Rights


Warrants
    and Rights (b)


Reflected
    in Column (a))(a)


(b)Equity Compensation Plans Approved By Security Holders


1,472,766


$
15.33



2,879,000Equity Compensation Plans Not Approved By Security Holders





$




Total Equity Compensation Plans


1,472,766


$
15.33



2,879,000  17




---



##### 



Performance
    Graph
  ®
  TOTAL RETURN
    PERFORMANCE
  
  December 31,Index

Symbol


2002


2003


2004


2005


2006


2007Hanmi Financial


HAFC


$
100.00


$
121.24


$
223.44


$
224.61


$
286.92


$
111.66NASDAQ Composite


ˆ IXIC


$
100.00


$
150.01


$
162.89


$
165.13


$
180.85


$
198.60S&P 500 Financials


S5FINL


$
100.00


$
127.92


$
138.45


$
143.61


$
166.82


$
132.05SNL Bank $1B-$5B





$
100.00


$
135.99


$
167.83


$
164.97


$
190.90


$
139.06  18




---



##### 



Purchases of
    Equity Securities by the Issuer and Affiliated Purchasers
    ISSUER
    PURCHASES OF EQUITY SECURITIES(d)
    Maximum Number (or(b)
    Average


(c) Total
    Number of Shares


Approximate
    Dollar(a )Total
    Number


Price
    Paid


(or
    Units) Purchased as


Value) of
    Shares (or Units)of Shares
    (or


per
    Share


Part of
    Publicly Announced


that May
    Yet Be PurchasedPeriod

Units)
    Purchased


(or
    Unit)


Plans or
    Programs


Under the
    Plans or ProgramsRepurchases from October 1, 2007 to October 31, 2007


2,000


$
16.57



2,000


$
11,074,000Repurchases from November 1, 2007 to November 30, 2007


1,060,400


$
9.62



1,060,400


$
798,000Repurchases from December 1, 2007 to December 31, 2007


82,000


$
9.34



82,000


$
29,000Total


1,144,400


$
9.62



1,144,400  19




---



##### 



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)

2007


2006


2005


2004


2003SUMMARY STATEMENTS OF OPERATIONS:Interest Income

$
280,896


$
260,189


$
200,941


$
135,554


$
77,417Interest Expense


128,693



106,429



62,111



32,617



20,796Net Interest Income Before Provision for Credit Losses


152,203



153,760



138,830



102,937



56,621Provision for Credit Losses


38,323



7,173



5,395



2,907



5,680Non-Interest Income


40,006



36,963



31,450



26,211



20,022Non-Interest Expenses


189,929



77,313



70,201



66,566



39,325Income (Loss) Before Provision for Income Taxes


(36,043
)


106,237



94,684



59,675



31,638Provision for Income Taxes


24,477



40,588



36,455



22,975



12,425NET INCOME (LOSS)

$
(60,520
)

$
65,649


$
58,229


$
36,700


$
19,213SUMMARY BALANCE SHEETS:Cash and Cash Equivalents

$
122,398


$
138,501


$
163,477


$
127,164


$
62,595Total Investment Securities


350,457



391,579



443,912



418,973



414,616Net
    Loans(1)


3,241,097



2,837,390



2,469,080



2,234,842



1,248,399Total Assets


3,983,746



3,725,243



3,414,252



3,104,188



1,787,139Total Deposits


3,001,699



2,944,715



2,826,114



2,528,807



1,445,835Total Liabilities


3,612,201



3,238,126



2,987,475



2,704,278



1,647,672Total Stockholders Equity


371,545



487,117



426,777



399,910



139,467Tangible Equity


257,537



273,159



209,028



178,791



137,424Average Net Loans


3,049,775



2,721,229



2,359,439



1,912,534



1,103,765Average Investment Securities


368,144



414,672



418,750



425,537



379,635Average Interest-Earning Assets


3,494,758



3,214,761



2,871,564



2,387,412



1,538,820Average Total Assets


3,882,891



3,602,181



3,249,190



2,670,701



1,623,214Average Deposits


2,989,806



2,881,448



2,632,254



2,129,724



1,416,564Average Borrowings


355,819



221,347



165,482



223,780



63,138Average Interest-Bearing Liabilities


2,643,296



2,367,389



2,046,227



1,687,688



1,057,249Average Stockholders Equity


492,637



458,227



417,813



293,313



132,369Average Tangible Equity


275,036



242,362



198,527



143,262



130,252PER SHARE DATA:Earnings (Loss) Per Share  Basic

$
(1.27
)

$
1.34


$
1.18


$
0.87


$
0.68Earnings (Loss) Per Share  Diluted

$
(1.27
)

$
1.33


$
1.17


$
0.84


$
0.67Book Value Per
    Share(2)

$
8.10


$
9.93


$
8.77


$
8.11


$
4.92Tangible Book Value Per
    Share(3)

$
5.62


$
5.57


$
4.30


$
3.62


$
4.85Cash Dividends Per Share

$
0.24


$
0.24


$
0.20


$
0.20


$
0.20Common Shares Outstanding


45,860,941



49,076,613



48,658,798



49,330,704



28,326,820    (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. 20




---



##### 



As of and for the Year Ended December 31,2007


2006


2005


2004


2003SELECTED PERFORMANCE RATIOS:Return on Average
    Assets(4)


(1.56
)%


1.82
%


1.79
%


1.37
%


1.18
%Return on Average Stockholders
    Equity(5)


(12.28
)%


14.33
%


13.94
%


12.51
%


14.51
%Return on Average Tangible Equity
    (6)


(22.00
)%


27.09
%


29.33
%


25.62
%


14.75
%Net Interest
    Spread(7)


3.17
%


3.59
%


3.96
%


3.75
%


3.06
%Net Interest
    Margin(8)


4.36
%


4.78
%


4.83
%


4.31
%


3.68
%Efficiency
    Ratio(9)


98.81
%


40.54
%


40.86
%


51.54
%


51.31
%Dividend Payout
    Ratio(10)


(18.90
)%


17.91
%


16.95
%


22.99
%


29.41
%Average Stockholders Equity to Average Total Assets


12.69
%


12.72
%


12.86
%


10.98
%


8.15
%SELECTED CAPITAL RATIOS:Total Capital to Total Risk-Weighted Assets:Hanmi Financial


10.65
%


12.55
%


12.04
%


11.98
%


11.13
%Hanmi Bank


10.59
%


12.28
%


11.98
%


11.80
%


11.09
%Tier 1 Capital to Total Risk-Weighted Assets:Hanmi Financial


9.40
%


11.58
%


11.03
%


10.93
%


10.05
%Hanmi Bank


9.34
%


11.31
%


10.96
%


10.75
%


10.00
%Tier 1 Capital to Average Total Assets:Hanmi Financial


8.52
%


10.08
%


9.11
%


8.93
%


7.80
%Hanmi Bank


8.47
%


9.85
%


9.06
%


8.78
%


7.75
%SELECTED ASSET QUALITY RATIOS:Non-Performing Loans to Total Gross
    Loans(11)


1.66
%


0.50
%


0.41
%


0.27
%


0.68
%Non-Performing Assets to Total
    Assets(12)


1.37
%


0.38
%


0.30
%


0.19
%


0.48
%Net Loan Charge-Offs to Average Total Gross Loans


0.73
%


0.17
%


0.12
%


0.19
%


0.29
%Allowance for Loan Losses to Total Gross Loans


1.33
%


0.96
%


1.00
%


1.00
%


1.06
%Allowance for Loan Losses to Non-Performing Loans


80.05
%


193.86
%


246.40
%


377.49
%


154.13
%   (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 expenses 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
   21




---



##### 



Year
    Ended December 31,(Dollars
    in thousands)

2007


2006


2005


2004


2003Average Stockholders Equity

$
492,637


$
458,227


$
417,813


$
293,313


$
132,369Less Average Goodwill and Average Other Intangible Assets


(217,601
)


(215,865
)


(219,286
)


(150,051
)


(2,117
)Average Tangible Equity

$
275,036


$
242,362


$
198,527


$
143,262


$
130,252Return on Average Stockholders Equity


(12.28
)%


14.33
%


13.94
%


12.51
%


14.51
%Effect of Average Goodwill and Average Other Intangible Assets


(9.72
)%


12.76
%


15.39
%


13.11
%


0.24
%Return on Average Tangible Equity


(22.00
)%


27.09
%


29.33
%


25.62
%


14.75
%   Tangible
    Book Value Per Share
      December 31,(Dollars
    in thousands, except per share amounts)

2007


2006


2005


2004


2003Total Stockholders Equity

$
371,545


$
487,117


$
426,777


$
399,910


$
139,467Less Goodwill and Other Intangible Assets


(114,008
)


(213,958
)


(217,749
)


(221,119
)


(2,043
)Tangible Equity

$
257,537


$
273,159


$
209,028


$
178,791


$
137,424Book Value Per Share

$
8.10


$
9.93


$
8.77


$
8.11


$
4.92Effect of Goodwill and Other Intangible Assets


(2.48
)


(4.36
)


(4.47
)


(4.49
)


(0.07
)Tangible Book Value Per Share

$
5.62


$
5.57


$
4.30


$
3.62


$
4.85   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.
 22




---



##### 



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  Servicing Assets
  Goodwill
  Goodwill and Other Intangible
    Assets,
  Notes to Consolidated
    Financial Statements, Note 1  Summary of
    Significant Accounting Policies Note 6  Goodwill
  Overview
     23




---



##### 



Year
    Ended December 31, 2007Weighted-Income


Average


Per(Loss)


Shares


Share(Dollars
    in thousands, except per share data)

(Numerator)


(Denominator)


AmountGAAP Net Loss

$
(60,520
)


47,787,213


$
(1.27
)Impairment Loss on Goodwill


102,891Dilutive Securities  Options and Warrants






306,504


$
2.15Non-GAAP Net Income, Excluding Impairment Loss on Goodwill

$
42,371



48,093,717


$
0.88           24




---



##### 



Year
    Ended December 31,(In
    thousands)

2007


2006


2005GAAP Total Non-Interest Expenses

$
189,929


$
77,313


$
70,201Deduct  Impairment Loss on Goodwill


(102,891
)






Non-GAAP Total Non-Interest Expenses

$
87,038


$
77,313


$
70,201GAAP Efficiency Ratio


98.81
%


40.54
%


40.86
%Effect of Impairment Loss on Goodwill


(53.53
)%






Non-GAAP Efficiency Ratio


45.28
%


40.54
%


40.86
%   Results Of
    Operations
  Net Interest
    Income, Net Interest Spread and Net Interest Margin
     25




---



##### 



Year
    Ended December 31,2007


2006


2005Interest


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)

$
3,080,544


$
261,992



8.50
%

$
2,747,922


$
239,075



8.70
%

$
2,382,230


$
180,845



7.59
%Municipal
    Securities(2)


71,937



3,055



4.25
%


72,694



3,087



4.25
%


74,166



3,122



4.21
%Obligations of Other U.S. Government Agencies


116,701



4,963



4.25
%


122,503



5,148



4.20
%


102,703



4,002



3.90
%Other Debt Securities


179,506



8,436



4.70
%


219,475



10,120



4.61
%


241,881



10,271



4.25
%Equity Securities


26,228



1,413



5.39
%


24,684



1,354



5.49
%


23,571



1,107



4.70
%Federal Funds Sold


19,746



1,032



5.23
%


27,410



1,402



5.11
%


46,799



1,589



3.40
%Term Federal Funds Sold


96



5



5.21
%


41



2



4.88
%










Interest-Earning Deposits














32



1



4.04
%


214



5



2.34
%Total Interest-Earning Assets


3,494,758



280,896



8.04
%


3,214,761



260,189



8.09
%


2,871,564



200,941



7.00
%Noninterest-Earning Assets:Cash and Cash Equivalents


92,148











93,535











92,245Allowance for Loan Losses


(30,769
)










(26,693
)










(22,791
)Other Assets


326,754











320,578











308,172Total Noninterest-Earning Assets


388,133











387,420











377,626Total Assets

$
3,882,891










$
3,602,181










$
3,249,190LIABILITIES AND STOCKHOLDERS EQUITYInterest-Bearing Liabilities:Deposits:Savings

$
97,173



2,004



2.06
%

$
107,811



1,853



1.72
%

$
138,167



2,130



1.54
%Money Market Checking and NOW Accounts


452,825



15,446



3.41
%


471,780



14,539



3.08
%


539,678



12,964



2.40
%Time Deposits of $100,000 or More


1,430,603



75,516



5.28
%


1,286,202



64,184



4.99
%


959,904



31,984



3.33
%Other Time Deposits


306,876



15,134



4.93
%


280,249



12,460



4.45
%


242,996



7,114



2.93
%FHLB Advances and Other Borrowings


273,413



13,949



5.10
%


138,941



6,977



5.02
%


83,076



3,017



3.63
%Junior Subordinated Debentures


82,406



6,644



8.06
%


82,406



6,416



7.79
%


82,406



4,902



5.95
%Total Interest-Bearing Liabilities


2,643,296



128,693



4.87
%


2,367,389



106,429



4.50
%


2,046,227



62,111



3.04
%Noninterest-Bearing Liabilities:Demand Deposits


702,329











735,406











751,509Other Liabilities


44,629











41,159











33,641Total Noninterest-Bearing Liabilities


746,958











776,565











785,150Total Liabilities


3,390,254











3,143,954











2,831,377Stockholders Equity


492,637











458,227











417,813Total Liabilities and Stockholders Equity

$
3,882,891










$
3,602,181










$
3,249,190Net Interest Income





$
152,203










$
153,760










$
138,830Net Interest
    Spread(3)










3.17
%










3.59
%










3.96
%Net Interest
    Margin(4)










4.36
%










4.78
%










4.83
%   (1)
    
    Loans are net of deferred fees and related direct costs. Loan
    fees have been included in the calculation of interest income.
    Loan fees were $2.7 million, $4.8 million and
    $6.3 million for the years ended December 31, 2007,
    2006 and 2005, respectively.(2)
    
    Tax-exempt
    income, computed on a tax-equivalent basis using an effective
    marginal rate of 35 percent, was $4.7 million,
    $4.7 million and $4.8 million for the years ended
    December 31, 2007, 2006 and 2005, respectively. Yields on
    tax-exempt income were 6.53 percent, 6.53 percent and
    6.48 percent for the years ended December 31, 2007,
    2006 and 2005, 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. 26




---



##### 



Year
    Ended December 31,2007 vs.
    2006





2006 vs.
    2005Increase
    (Decrease)





Increase
    (Decrease)Due to
    Change in





Due to
    Change in(In
    thousands)

Volume


Rate


Total


Volume


Rate


TotalInterest Income:Gross Loans, Net

$
28,391


$
(5,474
)

$
22,917


$
29,839


$
28,391


$
58,230Municipal Securities


(32
)






(32
)


(63
)


28



(35
)Obligations of Other U.S. Government Agencies


(246
)


61



(185
)


816



330



1,146Other Debt Securities


(1,875
)


191



(1,684
)


(994
)


843



(151
)Equity Securities


83



(24
)


59



54



193



247Federal Funds Sold


(400
)


30



(370
)


(807
)


620



(187
)Term Federal Funds Sold


3







3



2







2Interest-Earning Deposits


(1
)






(1
)


(10
)


6



(4
)Total Interest Income


25,923



(5,216
)


20,707



28,837



30,411



59,248Interest Expense:Savings


(196
)


347



151



(503
)


226



(277
)Money Market Checking and NOW Accounts


(601
)


1,508



907



(1,773
)


3,348



1,575Time Deposits of $100,000 or More


7,481



3,851



11,332



13,068



19,132



32,200Other Time Deposits


1,244



1,430



2,674



1,220



4,126



5,346FHLB Advances and Other Borrowings


6,860



112



6,972



2,524



1,436



3,960Junior Subordinated Debentures






228



228







1,514



1,514Total Interest Expense


14,788



7,476



22,264



14,536



29,782



44,318Change in Net Interest Income

$
11,135


$
(12,692
)

$
(1,557
)

$
14,301


$
629


$
14,930        27




---



##### 



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

2007


2006


2005Service Charges on Deposit Accounts

$
18,061


$
17,134


$
15,782Insurance Commissions


4,954



770



651Trade Finance Fees


4,493



4,567



4,269Remittance Fees


2,049



2,056



2,122Other Service Charges and Fees


2,527



2,359



2,496Bank-Owned Life Insurance Income


933



879



845Increase in Fair Value of Derivatives


683



1,074



1,105Other Income


1,702



1,157



1,042Gain on Sales of Loans


5,452



6,917



3,021Gain on Sales of Other Real Estate Owned


226



48



Gain on Sales of Securities Available for Sale






2



117Other-Than-Temporary
    Impairment Loss on Securities


(1,074
)






Total Non-Interest Income

$
40,006


$
36,963


$
31,450   other-than-temporary
     28




---



##### 



other-than-temporary other-than-temporary
  Non-Interest
    Expenses
    Year
    Ended December 31,(In
    thousands)

2007


2006


2005Salaries and Employee Benefits

$
47,036


$
40,512


$
36,839Occupancy and Equipment


10,494



9,643



9,413Data Processing


6,390



5,857



4,844Advertising and Promotion


3,630



2,997



2,913Supplies and Communications


2,592



2,391



2,556Professional Fees


2,468



1,910



2,201Amortization of Other Intangible Assets


2,324



2,379



2,785Decrease in Fair Value of Embedded Option


233



582



748Other Operating Expenses


11,871



11,042



8,411Merger-Related Expenses










(509
)Impairment Loss on Goodwill


102,891







Total Non-Interest Expenses

$
189,929


$
77,313


$
70,201      29




---



##### 



Income Taxes
      Notes to Consolidated Financial
    Statements, Note 11  Income Taxes,
    Financial
    Condition
  Loan
    Portfolio
     30




---



##### 



and/or
  and/or loan-to-value
    Amount of
    Loans Outstanding as of December 31,(In
    thousands)

2007


2006


2005


2004


2003Real Estate Loans:Commercial Property

$
795,675


$
757,428


$
733,650


$
783,539


$
397,853Construction


215,857



202,207



152,080



92,521



43,047Residential
    Property(1)


90,375



81,758



88,442



80,786



58,477Total Real Estate Loans


1,101,907



1,041,393



974,172



956,846



499,377Commercial and Industrial Loans:Commercial Term Loans


1,599,853



1,202,612



945,210



754,108



433,398Commercial Lines of Credit


256,978



225,630



224,271



201,940



120,856International Loans


119,360



126,561



106,520



95,936



65,040SBA
    Loans(2)


118,528



171,631



155,491



166,285



91,717Total Commercial and Industrial Loans


2,094,719



1,726,434



1,431,492



1,218,269



711,011Consumer
    Loans(3)


90,449



100,121



92,154



87,526



54,878Total Gross Loans

$
3,287,075


$
2,867,948


$
2,497,818


$
2,262,641


$
1,265,266    (1)
    
    As of December 31, 2007, 2006, 2005, 2004 and 2003, loans
    held for sale totaling $310,000, $630,000, $0, $0 and $0,
    respectively, were included at the lower of cost or fair
    value.(2)
    
    As
    of December 31, 2007, 2006, 2005, 2004 and 2003, loans held
    for sale totaling $6.0 million, $23.2 million, $0,
    $3.9 million and $25.5 million, respectively, were
    included at the lower of cost or market.(3)
    
    Consumer
    loans includes HELOCs. 31




---



##### 



Percentage
    Distribution of Loans as of December 31,2007


2006


2005


2004


2003Real Estate Loans:Commercial Property


24.2
%


26.4
%


29.4
%


34.6
%


31.4
%Construction


6.6
%


7.1
%


6.1
%


4.1
%


3.4
%Residential Property


2.7
%


2.8
%


3.5
%


3.6
%


4.7
%Total Real Estate Loans


33.5
%


36.3
%


39.0
%


42.3
%


39.5
%Commercial and Industrial Loans:Commercial Term Loans


48.7
%


41.9
%


37.8
%


33.3
%


34.3
%Commercial Lines of Credit


7.8
%


7.9
%


9.0
%


8.9
%


9.6
%International Loans


3.6
%


4.4
%


4.3
%


4.3
%


5.1
%SBA Loans


3.6
%


6.0
%


6.2
%


7.3
%


7.2
%Total Commercial and Industrial Loans


63.7
%


60.2
%


57.3
%


53.8
%


56.2
%Consumer Loans


2.8
%


3.5
%


3.7
%


3.9
%


4.3
%Total Gross Loans


100.0
%


100.0
%


100.0
%


100.0
%


100.0
%      December 31,(In
    thousands)

2007


2006Commitments to Extend Credit

$
524,349


$
578,347Commercial Letters of Credit


52,544



65,158Standby Letters of Credit


48,071



48,289Unused Credit Card Lines


18,622



17,031Total Undisbursed Loan Commitments

$
643,586


$
708,825  32




---



##### 



After
    OneWithin


But
    Within


After(In
    thousands)

One
    Year


Five
    Years


Five
    Years


TotalReal Estate Loans:Commercial Property

$
390,407


$
245,020


$
160,248


$
795,675Construction


215,857











215,857Residential Property


22,881



40,656



26,838



90,375Total Real Estate Loans


629,145



285,676



187,086



1,101,907Commercial and Industrial Loans:Commercial Term Loans


875,340



325,428



399,085



1,599,853Commercial Lines of Credit


256,978











256,978International Loans


119,360











119,360SBA Loans


108,413



1,338



8,777



118,528Total Commercial and Industrial Loans


1,360,091



326,766



407,862



2,094,719Consumer Loans


61,538



28,862



49



90,449Total Gross Loans

$
2,050,774


$
641,304


$
594,997


$
3,287,075Loans With Predetermined Interest Rates

$
117,175


$
619,110


$
590,680


$
1,326,965Loans With Variable Interest Rates

$
1,933,599


$
22,194


$
4,317


$
1,960,110     Non-Performing
    Assets
         33




---



##### 



December 31,(Dollars
    in thousands)

2007


2006


2005


2004


2003Non-Performing Loans:Non-Accrual Loans:Real Estate Loans:Commercial Property

$
2,684


$
246


$



$



$
527Construction


24,118















Residential Property


1,490







474



112



1,126Commercial and Industrial Loans


25,729



13,862



9,574



5,510



6,398Consumer Loans


231



105



74



184



53Total Non-Accrual Loans


54,252



14,213



10,122



5,806



8,104Loans 90 Days or More Past Due and Still Accruing (as to
    Principal or Interest):Real Estate Loans:Commercial Property


















557Commercial and Industrial Loans


150











169



Consumer Loans


77



2



9



39



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


227



2



9



208



557Total Non-Performing Loans


54,479



14,215



10,131



6,014



8,661Other Real Estate Owned


287















Total Non-Performing Assets

$
54,766


$
14,215


$
10,131


$
6,014


$
8,661Non-Performing Loans as a Percentage of Total Gross Loans


1.66
%


0.50
%


0.41
%


0.27
%


0.68
%Non-Performing Assets as a Percentage of Total Assets


1.37
%


0.38
%


0.30
%


0.19
%


0.48
%     Allowance for Loan
    Losses and Allowance for Off-Balance Sheet Items
   34




---



##### 



December 31,(Dollars
    in thousands)

2007


2006


2005


2004


2003Allowance
    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

$
2,269


$
795,675


$
2,101


$
757,428


$
2,043


$
733,650


$
1,854


$
783,539


$
374


$
397,853Construction


3,478



215,857



586



202,207



475



152,080



349



92,521



427



43,047Residential
    Property(1)


32



90,065



19



81,128



19



87,377



155



80,786



191



58,477Total Real Estate Loans


5,779



1,101,597



2,706



1,040,763



2,537



973,107



2,358



956,846



992



499,377Commercial and Industrial
    Loans(1)


36,011



2,088,694



23,099



1,703,194



21,035



1,431,492



19,051



1,214,419



11,376



685,557Consumer Loans


1,821



90,449



1,752



100,121



1,391



92,154



1,293



87,526



846



54,878Unallocated


































135



Total

$
43,611


$
3,280,740


$
27,557


$
2,844,078


$
24,963


$
2,496,753


$
22,702


$
2,258,791


$
13,349


$
1,239,812   (1)
    
    Loans
    held for sale excluded.        Provision for Credit Losses.
   35




---



##### 



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

2007


2006


2005


2004


2003Allowance
    for Loan Losses:Balance at Beginning of Year

$
27,557


$
24,963


$
22,702


$
13,349


$
11,254Allowance for Loan Losses from PUB Acquisition














10,566



Charge-Offs:Real Estate Loans:Commercial Property


















198Commercial and Industrial Loans


22,255



5,333



4,371



5,004



3,687Consumer Loans


1,075



796



827



481



538Total Charge-Offs


23,330



6,129



5,198



5,485



4,423Recoveries on Loans Previously Charged Off:Real Estate Loans:Commercial Property






406











21Residential Property


















6Commercial and Industrial Loans


494



957



2,193



1,702



859Consumer Loans


202



187



201



78



322Total Recoveries on Loans Previously Charged Off


696



1,550



2,394



1,780



1,208Net Loan Charge-Offs


22,634



4,579



2,804



3,705



3,215Provision Charged to Operating Expenses


38,688



7,173



5,065



2,492



5,310Balance at
    End of Year

$
43,611


$
27,557


$
24,963


$
22,702


$
13,349Allowance
    for Off-Balance Sheet Items:Balance at Beginning of Year

$
2,130


$
2,130


$
1,800


$
1,385


$
1,015Provision Charged to Operating Expenses


(365
)






330



415



370Balance at
    End of Year

$
1,765


$
2,130


$
2,130


$
1,800


$
1,385Ratios:Net Loan Charge-Offs to Average Total Gross Loans


0.73
%


0.17
%


0.12
%


0.19
%


0.29
%Net Loan Charge-Offs to Total Gross Loans at End of Period


0.69
%


0.16
%


0.11
%


0.16
%


0.25
%Allowance for Loan Losses to Average Total Gross Loans


1.41
%


1.00
%


1.05
%


1.17
%


1.20
%Allowance for Loan Losses to Total Gross Loans at End of Period


1.33
%


0.96
%


1.00
%


1.00
%


1.06
%Net Loan Charge-Offs to Allowance for Loan Losses


51.90
%


16.62
%


11.23
%


16.32
%


24.08
%Net Loan Charge-Offs to Provision Charged to Operating Expenses


58.50
%


63.84
%


55.36
%


148.68
%


60.55
%Allowance for Loan Losses to Non-Performing Loans


80.05
%


193.86
%


246.40
%


377.55
%


154.13
%Balances:Average Total Gross Loans Outstanding During Period

$
3,082,671


$
2,751,565


$
2,386,575


$
1,938,422


$
1,119,860Total Gross Loans Outstanding at End of Period

$
3,287,075


$
2,867,948


$
2,497,818


$
2,262,641


$
1,265,266Non-Performing Loans at End of Period

$
54,479


$
14,215


$
10,131


$
6,014


$
8,661   36




---



##### 



Investment Portfolio
          Investment
    Portfolio as of December 31,2007


2006


2005Amortized


Fair


Amortized


Fair


Amortized


Fair(In
    thousands)

Cost


Value


Cost


Value


Cost


ValueSecurities
    Held to Maturity:Municipal Bonds

$
694


$
694


$
693


$
693


$
692


$
692Mortgage-Backed Securities


246



247



274



276



357



359Total
    Securities Held to Maturity

$
940


$
941


$
967


$
969


$
1,049


$
1,051Securities
    Available for Sale:U.S. Government Agency Securities

$
104,893


$
105,089


$
119,768


$
118,244


$
129,589


$
127,813Mortgage-Backed Securities


99,332



99,198



123,614



121,608



149,311



147,268Municipal Bonds


69,907



71,751



69,966



71,710



71,536



73,220Collateralized Mortgage Obligations


51,881



51,418



67,605



66,113



83,068



81,456Corporate Bonds


18,295



18,226



8,090



7,887



8,235



8,053Other Securities


3,925



3,835



4,999



5,050



4,999



5,053Total
    Securities Available for Sale

$
348,233


$
349,517


$
394,042


$
390,612


$
446,738


$
442,863   and/or
  After
    One


After
    FiveWithin


But
    Within


But
    Within


AfterOne
    Year


Five
    Years


Ten
    Years


Ten
    Years(Dollars
    in thousands)

Amount


Yield


Amount


Yield


Amount


Yield


Amount


YieldU.S. Government Agency Securities

$
61,942



4.26%


$
43,147



4.74%


$







$




Mortgage-Backed
    Securities(1)


28,971



4.98%



36,518



4.84%



33,955



4.91%







Municipal
    Bonds(2)










2,844



5.01%



9,757



6.26%



59,844



6.39%Collateralized Mortgage
    Obligations(1)


19,629



4.29%



28,772



4.31%



3,017



4.38%







Corporate Bonds










18,226



5.04%















Other Securities


3,835



7.12%























$
114,377



4.54%


$
129,507



4.72%


$
46,729



5.16%


$
59,844



6.39%   (1)
    
    Mortgage-backed
    securities and collateralized mortgage obligations have
    contractual maturities through 2037. The above table is based on
    the expected prepayment schedule.(2)
    
    The
    yield on municipal bonds has been computed on a tax-equivalent
    basis, using an effective marginal rate of
    35 percent. 37




---



##### 



Deposits
            Year
    Ended December 31,2007


2006


2005Average


Average


Average


Average


Average


Average(Dollars
    in thousands)

Balance


Rate


Balance


Rate


Balance


RateDemand, Noninterest-Bearing

$
702,329






$
735,406






$
751,509



Savings


97,173



2.06%



107,811



1.72%



138,167



1.54%Money Market Checking and NOW Accounts


452,825



3.41%



471,780



3.08%



539,678



2.40%Time Deposits of $100,000 or More


1,430,603



5.28%



1,286,202



4.99%



959,904



3.33%Other Time Deposits


306,876



4.93%



280,249



4.45%



242,996



2.93%Total
    Deposits

$
2,989,806






$
2,881,448






$
2,632,254     December 31,(Dollars
    in thousands)

2007


2006


2005Three Months or Less

$
958,917


$
689,309


$
587,251Over Three Months Through Six Months


289,293



414,687



248,338Over Six Months Through Twelve Months


188,890



274,402



321,714Over Twelve Months


4,583



4,960



4,647$
1,441,683


$
1,383,358


$
1,161,950   38




---



##### 



FHLB
    Advances and Other Borrowings
      Junior
    Subordinated Debentures
    Interest
    Rate Risk Management
   39




---



##### 



AfterLess


Three


After
    OneThan


Months


Year
    But





Non-Three


But
    Within


Within


After


Interest-(Dollars
    in thousands)

Months


One
    Year


Five
    Years


Five
    Years


Sensitive


TotalAssetsCash

$



$



$



$



$
105,898


$
105,898Federal Funds Sold


16,500



















16,500Securities:Fixed Rate


16,150



72,744



129,507



106,681







325,082Floating Rate


5,133







16,407



3,835







25,375Loans:Fixed Rate


35,867



84,151



619,109



590,679







1,329,806Floating Rate


1,693,610



52,986



148,448



7,973







1,903,017Non-Accrual


















54,252



54,252Deferred Loan Fees and Allowance for Loan Losses


















(45,978
)


(45,978
)Federal Reserve Bank and Federal Home Loan Bank Stock














33,479







33,479Other Assets






24,521







7,467



204,327



236,315Total Assets

$
1,767,260


$
234,402


$
913,471


$
750,114


$
318,499


$
3,983,746Liabilities
    and Stockholders EquityLiabilitiesDeposits:Demand Deposits

$
42,550


$
137,147


$
329,152


$
171,433


$



$
680,282Savings


13,749



33,099



37,597



8,654







93,099Money Market Checking and NOW Accounts


65,181



125,737



145,117



109,771







445,806Time Deposits:Fixed Rate


1,141,570



631,433



9,340



115







1,782,458Floating Rate


54



















54FHLB Advances and Other Borrowings


364,500



105,000



13,084



4,580







487,164Junior Subordinated Debentures


82,406



















82,406Other Liabilities


















40,932



40,932Stockholders Equity


















371,545



371,545Total
    Liabilities and Stockholders Equity

$
1,710,010


$
1,032,416


$
534,290


$
294,553


$
412,477


$
3,983,746Repricing Gap

$
57,250


$
(798,014
)

$
379,181


$
455,561


$
(93,978
)

$
Cumulative Repricing Gap

$
57,250


$
(740,764
)

$
(361,583
)

$
93,978


$



$
Cumulative Repricing Gap as a Percentage of Total Assets


1.44
%


(18.59
)%


(9.08
)%


2.36
%






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


1.58
%


(20.39
)%


(9.95
)%


2.59
%






   point-in-time
   40




---



##### 



Less
    Than


Less
    ThanThree
    Months


Twelve
    MonthsDecember 31,


December 31,(Dollars
    in thousands)

2007


2006


2007


2006Cumulative Repricing Gap

$
57,250


$
970,441


$
(740,764
)

$
(85,051
)Percentage of Total Assets


1.44
%


26.05
%


(18.59
)%


(2.28
)%Percentage of Interest-Earning Assets


1.58
%


29.26
%


(20.39
)%


(2.56
)%       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
%


3.55
%


(18.92
)%

$
5,169


$
(101,438
)100
%


1.78
%


(9.80
)%

$
2,586


$
(52,565
)(100
)%


(1.86
)%


10.48
%

$
(2,707
)

$
56,200(200
)%


(3.84
)%


21.55
%

$
(5,588
)

$
115,576     Liquidity
    and Capital Resources
    and/or and/or
 41




---



##### 



December 31,Liquidity
    Ratios

2007


2006


2005Core Deposits/Total Assets


26.9
%


30.1
%


35.3
%Short-Term Non-Core Funding/Total Assets


54.8
%


46.0
%


41.8
%Net Loans/Total Assets


79.8
%


76.6
%


72.4
%Investments/Deposits


13.6
%


15.9
%


18.9
%Loans and Investments/Deposits


122.0
%


112.2
%


106.3
%Off-Balance Sheet Items/Total Assets


15.8
%


19.0
%


18.5
%     U.S.-based
      Off-Balance
    Sheet Arrangements
  Item 1. Business  Off-Balance Sheet
    Commitments.


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

$
1,773,057


$
4,313


$
5,027


$
115


$
1,782,512Commitments to Extend Credit


524,349















524,349FHLB Advances and Other Borrowings


469,500



13,084







4,580



487,164Junior Subordinated Debentures














82,406



82,406Standby Letters of Credit


43,643



4,328







100



48,071Operating Lease Obligations


2,906



5,509



2,684



5,179



16,278Total
    Contractual Obligations

$
2,813,455


$
27,234


$
7,711


$
92,380


$
2,940,780   Recently
    Issued Accounting Standards
  SFAS No. 160, Non-Controlling Interest in
    Consolidated Financial Statements  an Amendment of
    ARB No. 51
 42




---



##### 



SFAS No. 141(R), Business Combinations
  SAB No. 109, Written Loan Commitments
    Recorded at Fair Value through Earnings Application of Accounting
    Principles to Loan Commitments,
  EITF Issue
    No. 06-10,
    Accounting for Collateral Assignment Split-Dollar Life
    Insurance Agreements No. 06-10, No. 06-10 No. 06-10
  SFAS No. 159, The Fair Value Option for
    Financial Assets and Financial Liabilities The Fair Value Option for
    Financial Assets and Financial Liabilities,
  SFAS No. 157, Fair Value Measurements
  EITF Issue
    No. 06-4,
    Accounting for Deferred Compensation and Postretirement
    Benefit Aspects of Endorsement Split Dollar Life Insurance
    Arrangements
 43




---



##### 



No. 06-4, Employers Accounting for Postretirement Benefits
    Other Than Pensions, No. 06-4
  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 in
    timely alerting them to material information relating to Hanmi
    Financial that is required to be included in Hanmi
    Financials periodic SEC filings; 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 generally
    accepted accounting principles.        Managements
    Report on Internal Control Over Financial Reporting
   44




---



##### 




    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 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
   45




---



##### 



Report of
    Independent Registered Public Accounting Firm
     Internal Control-Integrated Framework
        Internal Control-Integrated Framework
    KPMG
    LLP
    46




---



##### 



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
  Audit
    Committee Financial Expert
    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
  Item 13.
    Certain
    Relationships and Related Transactions, and Director Independence  Certain
    Relationships and Related Transactions
  Item 14.
    Principal
    Accounting Fees and Services  Independent Accountants
 PART IV  Item 15.
    Exhibits,
    Financial Statement Schedules         47




---



##### 



HANMI
    FINANCIAL CORPORATION AND SUBSIDIARIES
 Index to
    Consolidated Financial Statements  PageReport of Independent Registered Public Accounting Firm


49Consolidated Balance Sheets as of December 31, 2007 and 2006


50Consolidated Statements of Operations for the Years Ended
    December 31, 2007, 2006 and 2005


51Consolidated Statements of Changes in Stockholders Equity
    and Comprehensive Income for the Years Ended December 31,
    2007, 2006 and 2005


52Consolidated Statements of Cash Flows for the Years Ended
    December 31, 2007, 2006 and 2005


53Notes to Consolidated Financial Statements


54  48




---



##### 



Report of
    Independent Registered Public Accounting Firm           Internal Control-Integrated Framework
  
    49




---



##### 



Hanmi
    Financial Corporation and Subsidiaries
 Consolidated Balance
    Sheets  December 31,(Dollars
    in thousands)

2007


2006ASSETSCash and Due From Banks

$
105,898


$
97,501Federal Funds Sold


16,500



41,000Cash and Cash Equivalents


122,398



138,501Term Federal Funds Sold






5,000Securities Held to Maturity, at Amortized Cost (Fair Value:
    2007  $941; 2006  $969)


940



967Securities Available for Sale, at Fair Value


349,517



390,612Loans Receivable, Net of Allowance for Loan Losses of $43,611
    and $27,557 at December 31, 2007 and 2006, Respectively


3,234,762



2,813,520Loans Held for Sale, at the Lower of Cost or Fair Value


6,335



23,870Customers Liability on Acceptances


5,387



8,403Premises and Equipment, Net


20,800



20,075Accrued Interest Receivable


17,500



16,919Other Real Estate Owned


287



Deferred Income Taxes


18,470



13,064Servicing Assets


4,336



4,579Goodwill


107,100



207,646Other Intangible Assets


6,908



6,312Federal Reserve Bank Stock, at Cost


11,733



11,733Federal Home Loan Bank Stock, at Cost


21,746



13,189Bank-Owned Life Insurance


24,525



23,592Other Assets


31,002



27,261TOTAL ASSETS

$
3,983,746


$
3,725,243LIABILITIES
    AND STOCKHOLDERS EQUITYLIABILITIES:Deposits:Noninterest-Bearing

$
680,282


$
728,347Interest-Bearing:Savings


93,099



99,255Money Market Checking and NOW Accounts


445,806



438,267Time Deposits of $100,000 or More


1,441,683



1,383,358Other Time Deposits


340,829



295,488Total Deposits


3,001,699



2,944,715Accrued Interest Payable


21,828



22,582Acceptances Outstanding


5,387



8,403FHLB Advances and Other Borrowings


487,164



169,037Junior Subordinated Debentures


82,406



82,406Other Liabilities


13,717



10,983Total
    Liabilities


3,612,201



3,238,126COMMITMENTS
    AND CONTINGENCIESSTOCKHOLDERS
    EQUITY:Common Stock, $.001 Par Value; Authorized
    200,000,000 Shares; Issued 50,493,441 Shares
    (45,860,941 Shares Outstanding) and 50,239,613 Shares
    (49,076,613 Shares Outstanding) at December 31, 2007
    and 2006, Respectively


50



50Additional Paid-In Capital


348,073



344,810Unearned Compensation


(245
)


Accumulated Other Comprehensive Income (Loss) 
    Unrealized Gain (Loss) on Securities Available for Sale,
    Interest-Only Strips and Interest Rate Swaps, Net of Income
    Taxes of $527 and ($1,450) at December 31, 2007 and 2006,
    Respectively


275



(3,200
)Retained Earnings


93,404



165,498441,557



507,158Less Treasury Stock, at Cost; 4,632,500 Shares and
    1,163,000 Shares at December 31, 2007 and 2006,
    Respectively


(70,012
)


(20,041
)Total
    Stockholders Equity


371,545



487,117TOTAL
    LIABILITIES AND STOCKHOLDERS EQUITY

$
3,983,746


$
3,725,243   See
    Accompanying Notes to Consolidated Financial
    Statements.
 50




---



##### 



Hanmi
    Financial Corporation and Subsidiaries
 Consolidated
    Statements of Operations  Year
    Ended December 31,(Dollars
    in thousands, except per share data)

2007


2006


2005INTEREST AND DIVIDEND INCOME:Interest and Fees on Loans

$
261,992


$
239,075


$
180,845Taxable Interest on Investments


13,399



15,2690



14,278Tax-Exempt Interest on Investments


3,055



3,087



3,122Dividends on FHLB and FRB Stock


1,413



1,354



1,107Interest on Federal Funds Sold


1,032



1,402



1,589Interest on Term Federal Funds Sold


5



2



Total Interest and Dividend Income


280,896



260,189



200,941INTEREST EXPENSE:Interest on Deposits


108,100



93,036



54,192Interest on FHLB Advances and Other Borrowings


13,949



6,977



3,017Interest on Junior Subordinated Debentures


6,644



6,416



4,902Total Interest Expense


128,693



106,429



62,111NET INTEREST INCOME BEFORE PROVISION FOR CREDIT LOSSES


152,203



153,760



138,830Provision for Credit Losses


38,323



7,173



5,395NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES


113,880



146,587



133,435NON-INTEREST INCOME:Service Charges on Deposit Accounts


18,061



17,134



15,782Insurance Commissions


4,954



770



651Trade Finance Fees


4,493



4,567



4,269Remittance Fees


2,049



2,056



2,122Other Service Charges and Fees


2,527



2,359



2,496Bank-Owned Life Insurance Income


933



879



845Increase in Fair Value of Derivatives


683



1,074



1,105Other Income


1,702



1,157



1,042Gain on Sales of Loans


5,452



6,917



3,021Gain on Sales of Other Real Estate Owned


226



48



Gain on Sales of Securities Available for Sale






2



117Other-Than-Temporary Impairment Loss on Securities


(1,074
)






Total Non-Interest Income


40,006



36,963



31,450NON-INTEREST EXPENSES:Salaries and Employee Benefits


47,036



40,512



36,839Occupancy and Equipment


10,494



9,643



9,413Data Processing


6,390



5,857



4,844Advertising and Promotion


3,630



2,997



2,913Supplies and Communications


2,592



2,391



2,556Professional Fees


2,468



1,910



2,201Amortization of Other Intangible Assets


2,324



2,379



2,785Decrease in Fair Value of Embedded Options


233



582



748Other Operating Expenses


11,871



11,042



8,411Merger-Related Expenses










(509
)Impairment Loss on Goodwill


102,891







Total Non-Interest Expenses


189,929



77,313



70,201INCOME (LOSS) BEFORE PROVISION FOR INCOME TAXES


(36,043
)


106,237



94,684Provision for Income Taxes


24,477



40,588



36,455NET INCOME
    (LOSS)

$
(60,520
)

$
65,649


$
58,229EARNINGS (LOSS) PER SHARE:Basic

$
(1.27
)

$
1.34


$
1.18Diluted

$
(1.27
)

$
1.33


$
1.17WEIGHTED-AVERAGE SHARES OUTSTANDING:Basic


47,787,213



48,850,221



49,174,885Diluted


47,787,213



49,435,128



49,942,356DIVIDENDS DECLARED PER SHARE

$
0.24


$
0.24


$
0.20   See
    Accompanying Notes to Consolidated Financial
    Statements.
 51




---



##### 





Hanmi
    Financial Corporation and Subsidiaries
 Consolidated
    Statements of Changes in Stockholders Equity and
    Comprehensive Income  Common
    Stock  Number of Shares


Stockholders
    EquityAccumulatedGross





Net











OtherShares





Shares





Additional





Comprehensive





Treasury


TotalIssued
    and


Treasury


Issued
    and


Common


Paid-in


Unearned


Income


Retained


Stock,


Stockholders(Dollars
    in thousands)

Outstanding


Shares


Outstanding


Stock


Capital


Compensation


(Loss)


Earnings


at
    Cost


EquityBALANCE AT
    JANUARY 1, 2005


49,330,704







49,330,704


$
49


$
334,932


$



$
1,035


$
63,894


$



$
399,910Exercises of Stock Options


391,094







391,094



1



2,515



















2,516Restricted Stock Award


100,000







100,000







1,815



(1,815
)














Amortization of Unearned Compensation






















665















665Tax Benefit from Exercise of Stock Options


















729



















729Stock Repurchase






(1,163,000
)


(1,163,000
)






















(20,041
)


(20,041
)Cash Dividends






























(9,813
)






(9,813
)Comprehensive Income:Net Income






























58,229







58,229Change in Unrealized Gain on Securities Available for Sale,
    Interest-Only Strips and Interest Rate Swaps, Net of Tax


























(5,418
)










(5,418
)Total Comprehensive Income






































52,811BALANCE AT
    DECEMBER 31, 2005


49,821,798



(1,163,000
)


48,658,798



50



339,991



(1,150
)


(4,383
)


112,310



(20,041
)


426,777Cumulative 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






























65,649







65,649Change in Unrealized Gain on Securities Available for Sale,
    Interest-Only Strips and Interest Rate Swaps, Net of Tax


























1,183











1,183Total Comprehensive Income






































66,832BALANCE AT
    DECEMBER 31, 2006


50,239,613



(1,163,000
)


49,076,613



50



344,810







(3,200
)


165,498



(20,041
)


487,117Shares 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






























(60,520
)






(60,520
)Change in Unrealized Gain on Securities Available for Sale,
    Interest-Only Strips and Interest Rate Swaps, Net of Tax


























3,475











3,475Total Comprehensive Loss






































(57,045
)BALANCE AT
    DECEMBER 31, 2007


50,493,441



(4,632,500
)


45,860,941


$
50


$
348,073


$
(245
)

$
275


$
93,404


$
(70,012
)

$
371,545   See
    Accompanying Notes to Consolidated Financial
    Statements.
 52




---



##### 





Hanmi
    Financial Corporation and Subsidiaries
 Consolidated
    Statements of Cash Flows  Year
    Ended December 31,(In
    thousands)

2007


2006


2005CASH FLOWS
    FROM OPERATING ACTIVITIES:Net Income (Loss)

$
(60,520
)

$
65,649


$
58,229Adjustments to Reconcile Net Income (Loss) to Net Cash Provided
    By Operating Activities:Depreciation and Amortization of Premises and Equipment


2,953



2,924



2,704Amortization of Premiums and Accretion of Discounts on
    Investments, Net


218



264



565Amortization of Other Intangible Assets


2,324



2,379



2,785Share-Based Compensation Expense


1,891



1,521



665Provision for Credit Losses


38,323



7,173



5,395Federal Reserve Bank and Federal Home Loan Bank Stock Dividends


(708
)


(641
)


(362
)Gain on Sales of Securities Available for Sale






(2
)


(117
)Other-Than-Temporary Impairment Loss on Securities


1,074







Increase in Fair Value of Derivatives


(683
)


(1,074
)


(1,105
)Decrease in Fair Value of Embedded Options


233



582



748Gain on Sales of Loans


(5,452
)


(6,917
)


(3,021
)Gain on Sales of Other Real Estate Owned


(226
)


(48
)


Loss on Sales of Premises and Equipment


22



96



34Impairment Loss on Goodwill


102,891







Excess Tax Benefit from Exercises of Stock Options


(193
)


(598
)


729Deferred Tax Benefit


(14,618
)


(2,942
)


(2,707
)Origination of Loans Held for Sale


(108,639
)


(154,608
)


(61,709
)Proceeds from Sales of Loans Held for Sale


131,626



138,720



67,515Increase in Accrued Interest Receivable


(581
)


(2,799
)


(4,091
)(Increase) Decrease in Servicing Assets, Net


243



(669
)


(64
)Increase in Cash Surrender Value of Bank-Owned Life Insurance


(933
)


(879
)


(845
)Increase in Other Assets


(4,040
)


(11,424
)


(2,015
)Increase (Decrease) in Accrued Interest Payable


(754
)


10,671



4,811Increase (Decrease) in Other Liabilities


3,034



(1,298
)


188Other, Net


6,165



2,236



612Net Cash
    Provided By Operating Activities


93,650



48,316



68,944CASH FLOWS
    FROM INVESTING ACTIVITIES:Proceeds from Redemption of Federal Reserve Bank Stock






617



Proceeds from Matured Term Federal Funds Sold


5,000







Proceeds from Matured or Called Securities Available for Sale


89,958



56,729



89,885Proceeds from Sales of Securities Available for Sale






5,005



11,360Proceeds from Sales of Other Real Estate Owned


1,306



593



Net Increase in Loans Receivable


(459,930
)


(352,678
)


(242,088
)Purchase of Term Federal Funds Sold






(5,000
)


Purchases of Federal Reserve Bank and Federal Home Loan Bank
    Stock


(7,849
)


(311
)


(2,264
)Purchases of Securities Available for Sale


(44,980
)


(9,663
)


(132,700
)Purchases of Premises and Equipment


(3,682
)


(2,237
)


(3,831
)Business Acquisitions, Net of Cash Acquired


(4,121
)






Net Cash
    Used In Investing Activities


(424,298
)


(306,945
)


(279,638
)CASH FLOWS
    FROM FINANCING ACTIVITIES:Increase in Deposits


56,984



118,601



297,307Proceeds from Exercises of Stock Options and Stock Warrants


1,164



3,553



2,516Excess Tax Benefit from Exercises of Stock Options


193



598



Stock Issued for Business Acquisitions


2,198







Cash Paid to Acquire Treasury Stock


(49,971
)






(20,041
)Cash Paid to Repurchase Stock Warrants


(2,552
)






Cash Dividends Paid


(11,574
)


(11,805
)


(9,813
)Proceeds from Long-Term FHLB Advances and Other Borrowings






130,000



7,411Repayment of Long-Term FHLB Advances and Other Borrowings


(443
)


(5,420
)


(30,246
)Net Change in Short-Term FHLB Advances and Other Borrowings


318,546



(1,874
)


(127
)Net Cash
    Provided By Financing Activities


314,545



233,653



247,007NET INCREASE
    (DECREASE) IN CASH AND CASH EQUIVALENTS


(16,103
)


(24,976
)


36,313Cash and Cash Equivalents at Beginning of Year


138,501



163,477



127,164CASH AND
    CASH EQUIVALENTS AT END OF YEAR

$
122,398


$
138,501


$
163,477Supplemental
    Disclosures of Cash Flow Information:Interest Paid

$
129,447


$
117,100


$
41,266Income Taxes Paid

$
38,232


$
45,869


$
37,650Supplemental
    Schedule of Non-Cash Investing and Financing Activities:Transfer of Loans to Other Real Estate Owned

$
1,367


$
541


$
Accrued Dividend

$
3,030


$
2,941


$
2,433   See
    Accompanying Notes to Consolidated Financial
    Statements.
 53




---



##### 



Hanmi
    Financial Corporation and Subsidiaries
  Notes to
    Consolidated Financial Statements
    December 31, 2007, 2006 and 2005
  Note 1 
    Summary of
    Significant Accounting Policies    Principles
    of Consolidation
      Korean-American
    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 (loss), net of income
    taxes.   54




---



##### 



Hanmi
    Financial Corporation and Subsidiaries
  Notes to
    Consolidated Financial Statements
    December 31, 2007, 2006 and
    2005 (Continued)
  Note 1 
    Summary of
    Significant Accounting
    Policies (Continued)        Loans
    Loans
    Held for Sale
    Loan
    Interest Income and Fees
     55




---



##### 



Hanmi
    Financial Corporation and Subsidiaries
  Notes to
    Consolidated Financial Statements
    December 31, 2007, 2006 and
    2005 (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
 56




---



##### 



Hanmi
    Financial Corporation and Subsidiaries
  Notes to
    Consolidated Financial Statements
    December 31, 2007, 2006 and
    2005 (Continued)
  Note 1 
    Summary of
    Significant Accounting
    Policies (Continued)  Other
    Real Estate Owned
    Premises
    and Equipment
    Buildings and Improvements

10 to 30 yearsFurniture and Equipment

Two to Seven YearsLeasehold Improvements

Term of Lease or Useful Life, Whichever is ShorterSoftware

Three Years   Impairment
    of Long-Lived Assets
  Accounting for the
    Impairment or Disposal of Long-Lived Assets.
  Servicing
    Assets
  Accounting for Transfers and
    Servicing of Financial Assets and Extinguishments of
    Liabilities.
     57




---



##### 



Hanmi
    Financial Corporation and Subsidiaries
  Notes to
    Consolidated Financial Statements
    December 31, 2007, 2006 and
    2005 (Continued)
  Note 1 
    Summary of
    Significant Accounting
    Policies (Continued)  Goodwill
  Goodwill and Other Intangible
    Assets,
    Other
    Intangible Assets
      Federal
    Reserve Bank Stock
    Federal
    Home Loan Bank Stock
   58




---



##### 



Hanmi
    Financial Corporation and Subsidiaries
  Notes to
    Consolidated Financial Statements
    December 31, 2007, 2006 and
    2005 (Continued)
  Note 1 
    Summary of
    Significant Accounting
    Policies (Continued)    Derivative
    Instruments
  Accounting for Derivative
    Instruments and Hedging Activities, as amended.
          Bank-Owned
    Life Insurance
   59




---



##### 



Hanmi
    Financial Corporation and Subsidiaries
  Notes to
    Consolidated Financial Statements
    December 31, 2007, 2006 and
    2005 (Continued)
  Note 1 
    Summary of
    Significant Accounting
    Policies (Continued)  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, Accounting
    for Stock-Based Compensation. Accounting for Stock Issued to Employees,
   60




---



##### 



Hanmi
    Financial Corporation and Subsidiaries
  Notes to
    Consolidated Financial Statements
    December 31, 2007, 2006 and
    2005 (Continued)
  Note 1 
    Summary of
    Significant Accounting
    Policies (Continued)    Year
    EndedDecember 31,(Dollars
    in thousands, except per share data)

2005Net Income  As Reported

$
58,229Add  Share-Based Employee Compensation Expense
    Included in Reported Net Income, Net of Related Tax Effects
    (Restricted Stock Award)


409Deduct  Total Share-Based Employee Compensation
    Expense Determined Under Fair Value-Based Method for All Awards
    Subject to SFAS No. 123, Net of Related Tax Effects


(1,214
)Net
    Income  Pro Forma

$
57,424Earnings Per Share  As Reported:Basic

$
1.18Diluted

$
1.17Earnings Per Share  Pro Forma:Basic

$
1.17Diluted

$
1.15   No. FAS 123R-3, Transition Election Related to Accounting for the Tax
    Effects of the Share-Based Payment Awards (FAS 123R-3). FAS 123R-3
      Earnings
    Per Share
    Treasury
    Stock
   61




---



##### 



Hanmi
    Financial Corporation and Subsidiaries
  Notes to
    Consolidated Financial Statements
    December 31, 2007, 2006 and
    2005 (Continued)
  Note 1 
    Summary of
    Significant Accounting
    Policies (Continued)  Use of
    Estimates in the Preparation of Financial Statements
    Reclassifications
    Note 2 
    Securities    Gross


Gross


EstimatedAmortized


Unrealized


Unrealized


Fair(In
    thousands)

Cost


Gain


Loss


ValueDecember 31,
    2007:Municipal Bonds

$
694


$



$



$
694Mortgage-Backed Securities


246



1







247$
940


$
1


$



$
941December 31,
    2006:Municipal Bonds

$
693


$



$



$
693Mortgage-Backed Securities


274



2







276$
967


$
2


$



$
969  62




---



##### 



Hanmi
    Financial Corporation and Subsidiaries
  Notes to
    Consolidated Financial Statements
    December 31, 2007, 2006 and
    2005 (Continued)
  Note 2 
    Securities (Continued)    Gross


Gross


EstimatedAmortized


Unrealized


Unrealized


Fair(In
    thousands)

Cost


Gain


Loss


ValueDecember 31,
    2007:U.S. Government Agency Securities

$
104,893


$
277


$
81


$
105,089Mortgage-Backed Securities


99,332



533



667



99,198Municipal Bonds


69,907



1,867



23



71,751Collateralized Mortgage Obligations


51,881



128



591



51,418Corporate Bonds


18,295



43



112



18,226Other


3,925







90



3,835$
348,233


$
2,848


$
1,564


$
349,517December 31,
    2006:U.S. Government Agency Securities

$
119,768


$



$
1,524


$
118,244Mortgage-Backed Securities


123,614



179



2,185



121,608Municipal Bonds


69,966



1,795



51



71,710Collateralized Mortgage Obligations


67,605







1,492



66,113Corporate Bonds


8,090







203



7,887Other


4,999



172



121



5,050$
394,042


$
2,146


$
5,576


$
390,612     Available
    for Sale


Held to
    MaturityAmortized


Estimated


Amortized


Estimated(In
    thousands)

Cost


Fair
    Value


Cost


Fair
    ValueWithin One Year

$
65,898


$
65,777


$



$
Over One Year Through Five Years


64,033



64,217







Over Five Years Through Ten Years


8,877



9,063



694



694Over Ten Years


58,212



59,844







Mortgage-Backed Securities


99,332



99,198



246



247Collateralized Mortgage Obligations


51,881



51,418







$
348,233


$
349,517


$
940


$
941    63




---



##### 



Hanmi
    Financial Corporation and Subsidiaries
  Notes to
    Consolidated Financial Statements
    December 31, 2007, 2006 and
    2005 (Continued)
  Note 2 
    Securities (Continued)      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, 2007:U.S. Government Agency Securities

$



$



$
81


$
46,895


$
81


$
46,895Mortgage-Backed Securities


31



5,319



636



42,143



667



47,462Municipal Bonds










23



2,910



23



2,910Collateralized Mortgage Obligations










591



40,167



591



40,167Corporate Bonds










112



7,834



112



7,834Other










90



2,910



90



2,910$
31


$
5,319


$
1,533


$
142,859


$
1,564


$
148,178Available
    for Sale  December 31, 2006:U.S. Government Agency Securities

$
21


$
9,979


$
1,503


$
108,265


$
1,524


$
118,244Mortgage-Backed Securities


121



19,442



2,064



87,966



2,185



107,408Municipal Bonds


3



961



48



4,290



51



5,251Collateralized Mortgage Obligations


98



7,196



1,394



58,917



1,492



66,113Corporate Bonds










203



7,887



203



7,887Other










121



2,879



121



2,879$
243


$
37,578


$
5,333


$
270,204


$
5,576


$
307,782      64




---



##### 



Hanmi
    Financial Corporation and Subsidiaries
  Notes to
    Consolidated Financial Statements
    December 31, 2007, 2006 and
    2005 (Continued)
  Note 2 
    Securities (Continued)    Note 3 
    Loans
    Receivable    December 31,(In
    thousands)

2007


2006Real Estate Loans:Commercial Property

$
795,675


$
757,428Construction


215,857



202,207Residential Property


90,065



81,128Total Real Estate Loans


1,101,597



1,040,763Commercial and Industrial Loans:Commercial Term Loans


1,599,853



1,202,612Commercial Lines of Credit


256,978



225,630International Loans


119,360



126,561SBA Loans


112,503



148,391Total Commercial and Industrial Loans


2,088,694



1,703,194Consumer Loans


90,449



100,121Total Gross Loans


3,280,740



2,844,078Allowance for Loans Losses


(43,611
)


(27,557
)Deferred Loan Fees


(2,367
)


(3,001
)Loans
    Receivable, Net

$
3,234,762


$
2,813,520  65




---



##### 



Hanmi
    Financial Corporation and Subsidiaries
  Notes to
    Consolidated Financial Statements
    December 31, 2007, 2006 and
    2005 (Continued)
  Note 3 
    Loans
    Receivable (Continued)    As of and
    for the Year Ended December 31,2007


2006


2005Allowance





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

$
27,557


$
2,130


$
24,963


$
2,130


$
22,702


$
1,800Provision Charged to Operating Expense


38,688



(365
)


7,173







5,065



330Loans Charged Off


(23,330
)






(6,129
)






(5,198
)


Recoveries


696







1,550







2,394



Balance at
    End of Year

$
43,611


$
1,765


$
27,557


$
2,130


$
24,963


$
2,130     Year
    Ended December 31,(In
    thousands)

2007


2006


2005Interest Income That Would Have Been Recognized Had Impaired
    Loans Performed in Accordance With Their Original Terms

$
4,672


$
1,726


$
957Less: Interest Income Recognized on Impaired Loans


(3,705
)


(1,146
)


(603
)Interest
    Foregone on Impaired Loans

$
967


$
580


$
354     As of and
    for the Year Ended December 31,(In
    thousands)

2007


2006


2005Recorded Investment With Related Allowance

$
38,930


$
10,616


$
7,548Recorded Investment With No Related Allowance


15,202



3,868



3,235Allowance on Impaired Loans


(11,829
)


(6,731
)


(4,991
)Net Recorded
    Investment in Impaired Loans

$
42,303


$
7,753


$
5,792Average Total Recorded Investment in Impaired Loans

$
61,249


$
19,287


$
14,340      66




---



##### 



Hanmi
    Financial Corporation and Subsidiaries
  Notes to
    Consolidated Financial Statements
    December 31, 2007, 2006 and
    2005 (Continued)
  Note 4 
    Servicing
    Assets    December 31,(In
    thousands)

2007


2006Balance at Beginning of Year

$
4,579


$
3,910Additions


1,821



2,331Valuation Write-Down


(18
)


(355
)Amortization


(2,046
)


(1,307
)Balance at
    End of Year

$
4,336


$
4,579     Note 5 
    Premises and
    Equipment    December 31,(In
    thousands)

2007


2006Land

$
6,120


$
6,120Buildings and Improvements


8,433



8,210Furniture and Equipment


13,783



12,202Leasehold Improvements


10,141



8,403Software


862



86239,339



35,797Accumulated Depreciation and Amortization


(18,539
)


(15,722
)Total
    Premises and Equipment, Net

$
20,800


$
20,075    67




---



##### 



Hanmi
    Financial Corporation and Subsidiaries
  Notes to
    Consolidated Financial Statements
    December 31, 2007, 2006 and
    2005 (Continued)
  Note 6 
    Goodwill    As of and
    for the Years Ended December 31,(In
    thousands)

2007


2006Balance at Beginning of Year

$
207,646


$
209,058Acquired Goodwill


2,345



(1,412
)Impairment Loss on Goodwill


(102,891
)


Balance at
    End of Year

$
107,100


$
207,646   Acquired
    Goodwill
    Impairment
    Loss on Goodwill
    Note 7 
    Other
    Intangible Assets    December 31,
    2007


December 31,
    2006Gross





GrossAmortization


Carrying


Accumulated


Carrying


Accumulated(In
    thousands)

Period


Amount


Amortization


Amount


AmortizationOther Intangible Assets:Core Deposit Intangible


8 years


$
11,385


$
(7,113
)

$
11,385


$
(5,073
)Trade Names


20 years



970



(48
)






Client/Insured Relationships


10 years



770



(77
)






Non-Compete Agreements


5 years



600



(120
)






Carrier Relationships


15 years



580



(39
)






Total Other
    Intangible Assets





$
14,305


$
(7,397
)

$
11,385


$
(5,073
)    68




---



##### 



Hanmi
    Financial Corporation and Subsidiaries
  Notes to
    Consolidated Financial Statements
    December 31, 2007, 2006 and
    2005 (Continued)
  Note 7 
    Other
    Intangible
    Assets (Continued)    Year
    EndingDecember
    31,(In
    thousands)

Amount2008

$
1,9592009

$
1,5682010

$
1,1492011

$
7002012

$
198     Note 8 
    Deposits    December 31,(In
    thousands)

2007


2006Less Than Three Months

$
1,141,872


$
811,211After Three Months to Six Months


379,806



516,473After Six Months to Twelve Months


251,352



340,856After Twelve Months


9,482



10,306Total Time
    Deposits

$
1,782,512


$
1,678,846     Year
    EndingDecember
    31,(In
    thousands)

Amount2008

$
2009

$
8,7202010

$
6202011

$
2012

$
4  69




---



##### 



Hanmi
    Financial Corporation and Subsidiaries
  Notes to
    Consolidated Financial Statements
    December 31, 2007, 2006 and
    2005 (Continued)
  Note 8 
    Deposits (Continued)    Year
    Ended December 31,(In
    thousands)

2007


2006


2005Savings

$
2,004


$
1,853


$
2,130Money Market Checking and NOW Accounts


15,446



14,539



12,964Time Deposits of $100,000 or More


75,516



64,184



31,984Other Time Deposits


15,134



12,460



7,114Total
    Interest Expense on Deposits

$
108,100


$
93,036


$
54,192     Note 9 
    FHLB
    Advances and Other Borrowings    December 31,(In
    thousands)

2007


2006FHLB Advances

$
432,664


$
168,107Federal Funds Purchased


50,000



Note Issued to U.S. Treasury


4,500



930Total FHLB
    Advances and Other Borrowings

$
487,164


$
169,037     YearWeighted-AverageInterest(In
    thousands)

Amount


Rate2008

$
415,000



4.72
%2009


6,000



5.63
%2010


7,084



4.44
%2011






2012






Thereafter


4,580



5.27
%$
432,664  70




---



##### 



Hanmi
    Financial Corporation and Subsidiaries
  Notes to
    Consolidated Financial Statements
    December 31, 2007, 2006 and
    2005 (Continued)
  Note 9 
    FHLB
    Advances and Other
    Borrowings (Continued)     Year
    Ended December 31,(Dollars
    in thousands)

2007


2006


2005Weighted-Average Interest Rate at End of Year


4.73
%


5.20
%


4.33
%Weighted-Average Interest Rate During the Year


5.11
%


5.02
%


3.70
%Average Balance of FHLB Advances

$
237,733


$
123,295


$
74,437Maximum Amount Outstanding at Any Month-End

$
432,664


$
168,250


$
100,700         Note 10 
    Junior
    Subordinated Debentures      Note 11 
    Income Taxes  Accounting for Uncertainty in Income Taxes 
    an interpretation of FASB Statement No. 109
 71




---



##### 



Hanmi
    Financial Corporation and Subsidiaries
  Notes to
    Consolidated Financial Statements
    December 31, 2007, 2006 and
    2005 (Continued)
  Note 11 
    Income
    Taxes (Continued)     (In
    thousands)Unrecognized Tax Benefits at January 1, 2007

$
794Gross Increases for Tax Positions of Prior Years


40Gross Decreases for Tax Positions of Prior Years


Increases in Tax Positions for Current Year


198Settlements


Lapse in Statute of Limitations


Unrecognized Tax Benefits at December 31, 2007

$
1,032          72




---



##### 



Hanmi
    Financial Corporation and Subsidiaries
  Notes to
    Consolidated Financial Statements
    December 31, 2007, 2006 and
    2005 (Continued)
  Note 11 
    Income
    Taxes (Continued)   Year
    Ended December 31,(In
    thousands)

2007


2006


2005Current Expense:Federal

$
30,209


$
34,471


$
29,779State


8,886



9,059



9,38339,095



43,530



39,162Deferred Expense:Federal


(10,791
)


(2,222
)


(2,350
)State


(3,827
)


(720
)


(357
)(14,618
)


(2,942
)


(2,707
)Provision for Income Taxes

$
24,477


$
40,588


$
36,455     December 31,(In
    thousands)

2007


2006Deferred Tax Assets:Credit Loss Provision

$
20,800


$
13,608Depreciation


1,729



1,288State Taxes


1,594



2,672Unrealized Loss on Securities Available for Sale, Interest-Only
    Strips and Interest Rate Swaps






1,450Other


2,133



637Total Deferred Tax Assets


26,256



19,655Deferred Tax Liabilities:Purchase Accounting


(5,464
)


(5,329
)Unrealized Gain on Securities Available for Sale, Interest-Only
    Strips and Interest Rate Swaps


(527
)


Other


(1,795
)


(1,262
)Total Deferred Tax Liabilities


(7,786
)


(6,591
)Net Deferred Tax Assets

$
18,470


$
13,064    73




---



##### 



Hanmi
    Financial Corporation and Subsidiaries
  Notes to
    Consolidated Financial Statements
    December 31, 2007, 2006 and
    2005 (Continued)
  Note 11 
    Income
    Taxes (Continued)   Year
    Ended December 31,2007


2006


2005Federal Statutory Income Tax Rate


(35.0
)%


35.0
%


35.0
%State Taxes, Net of Federal Tax Benefits


9.1
%


5.8
%


6.2
%Tax-Exempt Municipal Securities


(3.0
)%


(1.0
)%


(1.2
)%Other


(3.1
)%


(1.6
)%


(1.5
)%Impairment Loss on Goodwill










Effective Tax Rate


67.9
%


38.2
%


38.5
%     Note 12 
    Employee
    Share-Based Compensation    2007
    Equity Compensation Plan
       Year
    Ended December 31,2007


2006


2005Weighted-Average Estimated Fair Value Per Share of Options
    Granted

$
4.49


$
6.23


$
4.96  74




---



##### 



Hanmi
    Financial Corporation and Subsidiaries
  Notes to
    Consolidated Financial Statements
    December 31, 2007, 2006 and
    2005 (Continued)
  Note 12 
    Employee
    Share-Based
    Compensation (Continued)    Year
    Ended December 31,2007


2006


2005Weighted-Average Assumptions:Dividend Yield


1.68
%


1.26
%


1.18
%Expected Volatility


29.98
%


34.79
%


32.62
%Expected Term


4.9 years



4.6 years



4.1 yearsRisk-Free Interest Rate


4.29
%


4.85
%


4.13
%       Year
    Ended December 31,(In
    thousands)

2007


2006


2005Grant Date Fair Value of Options Granted

$
596


$
5,940


$
672Fair Value of Options Vested

$
1,590


$
695


$
905Total Intrinsic Value of Options
    Exercised(1)

$
1,197


$
2,874


$
4,487Cash Received from Options Exercised

$
1,145


$
2,032


$
2,093Actual Tax Benefit Realized from Tax Deductions on Options
    Exercised

$
317


$
661


$
729   (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 31,2007


2006


2005Weighted-





Weighted-





Weighted-Average





Average





AverageNumber


Exercise


Number


Exercise


Number


Exerciseof


Price
    Per


of


Price


of


Price
    PerShares


Share


Shares


Per
    Share


Shares


ShareOptions Outstanding at Beginning of Year


1,755,813


$
15.31



1,173,712


$
10.55



1,618,836


$
9.33Options Granted


132,667


$
15.05



953,000


$
19.17



135,554


$
17.10Options Exercised


(130,647
)

$
8.76



(257,759
)

$
7.88



(391,094
)

$
6.44Options Forfeited


(256,267
)

$
18.22



(111,540
)

$
15.39



(189,584
)

$
13.26Options Expired


(28,800
)

$
16.90



(1,600
)

$
14.03






$
Options Outstanding at End of Year


1,472,766


$
15.33



1,755,813


$
15.31



1,173,712


$
10.55Options Exercisable at End of Year


617,634


$
12.48



471,903


$
8.55



520,602


$
7.00  75




---



##### 



Hanmi
    Financial Corporation and Subsidiaries
  Notes to
    Consolidated Financial Statements
    December 31, 2007, 2006 and
    2005 (Continued)
  Note 12 
    Employee
    Share-Based
    Compensation (Continued)    Year
    Ended December 31,2007


2006


2005Weighted-





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


1,283,910


$
5.53



653,110


$
3.68



1,131,594


$
2.93Options Granted


132,667


$
4.49



953,000


$
6.23



135,554


$
4.96Options Vested


(305,178
)

$
5.21



(210,660
)

$
3.30



(424,454
)

$
2.13Options Forfeited


(256,267
)

$
5.57



(111,540
)

$
4.90



(189,584
)

$
3.62Non-Vested Options Outstanding at End of Year


855,132


$
5.47



1,283,910


$
5.53



653,110


$
3.68       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


$
1,105


$
3.89



2.7 years



128,184


$
1,105


$
3.89



2.7 years$5.00 to $9.99


121,128



1,044


$
7.78



4.8 years



91,128



786


$
7.21



3.1 years$10.00 to $14.99


338,900



2,921


$
13.51



6.2 years



190,100



1,639


$
13.51



6.2 years$15.00 to $19.99


653,554



5,634


$
17.71



8.3 years



136,222



1,174


$
17.81



8.1 years$20.00 to $21.63


231,000



1,991


$
21.57



8.9 years



72,000



620


$
21.63



8.9 years1,472,766


$
12,695


$
15.33



7.2 years



617,634


$
5,324


$
12.48



7.2 years   (1)
    
    Intrinsic
    value represents the difference between the closing stock price
    on the last trading day of the period, which was $8.62 as of
    December 31, 2007, and the exercise price, multiplied by
    the number of options.  2004 CEO
    Stock Option Plan
   76




---



##### 



Hanmi
    Financial Corporation and Subsidiaries
  Notes to
    Consolidated Financial Statements
    December 31, 2007, 2006 and
    2005 (Continued)
  Note 12 
    Employee
    Share-Based
    Compensation (Continued)    Year
    Ended December 31,2007


2006


2005Number


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


$
17.17



350,000


$
17.17Options Forfeited


(233,334
)

$
17.17






$







$
Options Cancelled


(116,666
)

$
17.17






$







$
Options Outstanding at End of Year





$




350,000


$
17.17



350,000


$
17.17Options Exercisable at End of Year





$




58,333


$
17.17






$
     Year
    Ended December 31,2007


2006


2005Number


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


$
4.82



350,000


$
4.82Options Forfeited


(233,334
)

$
4.82






$







$
Options Vested


(58,333
)

$
4.82



(58,333
)

$
4.82






$
Non-Vested Options Outstanding at End of Year





$




291,667


$
4.82



350,000


$
4.82     Restricted
    Stock Awards
     77




---



##### 



Hanmi
    Financial Corporation and Subsidiaries
  Notes to
    Consolidated Financial Statements
    December 31, 2007, 2006 and
    2005 (Continued)
  Note 13 
    Stockholders
    Equity  Stock
    Warrants
    Repurchase
    of Common Stock
    Note 14 
    Regulatory
    Matters       78




---



##### 



Hanmi
    Financial Corporation and Subsidiaries
  Notes to
    Consolidated Financial Statements
    December 31, 2007, 2006 and
    2005 (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,
    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
%December 31,
    2006Total Capital (to Risk-Weighted Assets):Hanmi Financial

$
384,895



12.55
%

$
245,408



8.00
%


N/A



N/AHanmi Bank

$
376,422



12.28
%

$
245,158



8.00
%

$
306,447



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

$
355,186



11.58
%

$
122,704



4.00
%


N/A



N/AHanmi Bank

$
346,713



11.31
%

$
122,579



4.00
%

$
183,868



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

$
355,186



10.08
%

$
140,947



4.00
%


N/A



N/AHanmi Bank

$
346,713



9.85
%

$
140,827



4.00
%

$
176,034



5.00
%     Memorandum
    of Understanding
   79




---



##### 



Hanmi
    Financial Corporation and Subsidiaries
  Notes to
    Consolidated Financial Statements
    December 31, 2007, 2006 and
    2005 (Continued)
  Note 15 
    Earnings
    (Loss) Per Share    Weighted-Income


Average


Per(Loss)


Shares


Share(Dollars
    in Thousands, Except Per Share Amounts)

(Numerator)


(Denominator)


Amount2007:Basic EPS  Income Available to Common Shareholders

$
(60,520
)


47,787,213


$
(1.27
)Effect of Dilutive Securities  Options and Warrants










Diluted EPS  Income Available to Common Shareholders

$
(60,520
)


47,787,213


$
(1.27
)2006:Basic EPS  Income Available to Common Shareholders

$
65,649



48,850,221


$
1.34Effect of Dilutive Securities  Options and Warrants






584,907



(0.01
)Diluted EPS  Income Available to Common Shareholders

$
65,649



49,435,128


$
1.332005:Basic EPS  Income Available to Common Shareholders

$
58,229



49,174,885


$
1.18Effect of Dilutive Securities  Options and Warrants






767,471



(0.01
)Diluted EPS  Income Available to Common Shareholders

$
58,229



49,942,356


$
1.17     Note 16 
    Employee
    Benefits  401(k)
    Plan
    Bank-Owned
    Life Insurance
    Deferred
    Compensation Plan
   80




---



##### 



Hanmi
    Financial Corporation and Subsidiaries
  Notes to
    Consolidated Financial Statements
    December 31, 2007, 2006 and
    2005 (Continued)
  Note 17 
    Commitments
    and Contingencies    Year
    Ending

AmountDecember
    31,

(In
    thousands)2008

$
2,9062009


2,8642010


2,6452011


1,4942012


1,190Thereafter


5,179$
16,278       Note 18 
    Off-Balance
    Sheet Commitments  case-by-case
    December 31,(In
    thousands)

2007


2006Commitments to Extend Credit

$
524,349


$
578,347Commercial Letters of Credit


52,544



65,158Standby Letters of Credit


48,071



48,289Unused Credit Card Lines


18,622



17,031Total Undisbursed Loan Commitments

$
643,586


$
708,825   Note 19 
    Fair Value
    of Financial Instruments   81




---



##### 



Hanmi
    Financial Corporation and Subsidiaries
  Notes to
    Consolidated Financial Statements
    December 31, 2007, 2006 and
    2005 (Continued)
  Note 19 
    Fair Value
    of Financial
    Instruments (Continued)  and/or
  December 31,
    2007


December 31,
    2006Carrying


Estimated


Carrying


Estimatedor
    Contract


Fair


or
    Contract


Fair(In
    thousands)

Amount


Value


Amount


ValueASSETSCash and Cash Equivalents

$
122,398


$
122,398


$
138,501


$
138,501Term Federal Funds Sold










5,000



5,000Securities Held to Maturity


940



941



967



969Securities Available for Sale


349,517



349,517



390,612



390,612Loans Receivable, Net


3,234,762



3,232,165



2,813,520



2,834,864Loans Held for Sale


6,335



6,335



23,870



23,870Accrued Interest Receivable


17,500



17,500



16,919



16,919Federal Reserve Bank Stock


11,733



11,733



11,733



11,733Federal Home Loan Bank Stock


21,746



21,746



13,189



13,189LIABILITIESNoninterest-Bearing Deposits


680,282



680,282



728,347



728,347Interest-Bearing Deposits


2,321,417



2,323,199



2,216,368



2,216,757FHLB Advances, Other Borrowings and Junior Subordinated
    Debentures


569,570



571,913



251,443



254,058Accrued Interest Payable


21,828



21,828



22,582



22,582OFF-BALANCE
    SHEET ITEMSCommitments to Extend Credit


524,349



535



578,347



1,786Standby Letters of Credit


48,071



147



48,289



245     Cash and Cash Equivalents
  Term Federal Funds Sold
  Securities
  Loans
 82




---



##### 



Hanmi
    Financial Corporation and Subsidiaries
  Notes to
    Consolidated Financial Statements
    December 31, 2007, 2006 and
    2005 (Continued)
  Note 19 
    Fair Value
    of Financial
    Instruments (Continued)    Accrued Interest Receivable
  Federal Reserve Bank Stock and Federal Home Loan Bank
    Stock
  Deposits
  Accrued Interest Payable
  FHLB Advances, Other Borrowings and Junior Subordinated
    Debentures
  Commitments to Extend Credit and Standby Letters of Credit
  Note 20 
    Condensed
    Financial Information of Parent Company  BALANCE
    SHEETS
  December 31,(In
    thousands)

2007


2006ASSETSCash

$
5,296


$
7,578Investment in Consolidated Subsidiaries


448,657



558,645Investment in Unconsolidated Subsidiaries


2,986



2,986Other Assets


1,032



4,346Total Assets

$
457,971


$
573,555LIABILITIES
    AND STOCKHOLDERS EQUITYLiabilities:Junior Subordinated Debentures

$
82,406


$
82,406Other Liabilities


4,020



4,032Stockholders Equity


371,545



487,117Total Liabilities and Stockholders Equity

$
457,971


$
573,555  83




---



##### 



Hanmi
    Financial Corporation and Subsidiaries
  Notes to
    Consolidated Financial Statements
    December 31, 2007, 2006 and
    2005 (Continued)
  Note 20 
    Condensed
    Financial Information of Parent
    Company (Continued)  STATEMENTS OF
    OPERATIONS
  Year
    Ended December 31,(In
    thousands)

2007


2006


2005Equity in Earnings (Losses) of Subsidiaries

$
(54,083
)

$
71,375


$
62,001Other Expenses, Net


(10,155
)


(9,266
)


(6,133
)Income Tax Benefit


3,718



3,540



2,361Net Income (Loss)

$
(60,520
)

$
65,649


$
58,229  84




---



##### 



Hanmi
    Financial Corporation and Subsidiaries
  Notes to
    Consolidated Financial Statements
    December 31, 2007, 2006 and
    2005 (Continued)
  Note 20 
    Condensed
    Financial Information of Parent
    Company (Continued)  STATEMENTS OF
    CASH FLOWS
  Year
    Ended December 31,(In
    thousands)

2007


2006


2005CASH FLOWS
    FROM OPERATING ACTIVITIES:Net Income (Loss)

$
(60,520
)

$
65,649


$
58,229Adjustments to Reconcile Net Income to Net Cash Used In
    Operating Activities:Losses (Earnings) of Subsidiaries


54,083



(71,375
)


(62,001
)Decrease in Receivable from Hanmi Bank










455Share-Based Compensation Expense


1,891



1,521



(Increase) Decrease in Other Assets


3,314



(1,255
)


(1,292
)Increase (Decrease) in Other Liabilities


(12
)


659



(229
)Tax Benefit from Exercises of Stock Options


317



661



729Net Cash Used In Operating Activities


(927
)


(4,140
)


(4,109
)CASH FLOWS
    FROM INVESTING ACTIVITIES:Dividends Received from Hanmi Bank


63,501



18,500



27,541Business Acquisitions, Net of Cash Received


(4,121
)






Net Cash Provided By Investing Activities


59,380



18,500



27,541CASH FLOWS
    FROM FINANCING ACTIVITIES:Proceeds from Exercise of Stock Options and Stock Warrants


1,164



3,553



2,516Stock Issued for Business Acquisitions


2,198







Cash Paid to Acquire Treasury Stock


(49,971
)






(20,041
)Cash Paid to Repurchase Stock Warrants


(2,552
)






Cash Dividends Paid


(11,574
)


(11,805
)


(9,813
)Net Cash Used In Financing Activities


(60,735
)


(8,252
)


(27,338
)NET INCREASE (DECREASE) IN CASH


(2,282
)


6,108



(3,906
)Cash at Beginning of Year


7,578



1,470



5,376CASH AT END OF YEAR

$
5,296


$
7,578


$
1,470  85




---



##### 



Hanmi
    Financial Corporation and Subsidiaries
  Notes to
    Consolidated Financial Statements
    December 31, 2007, 2006 and
    2005 (Continued)
  Note 21 
    Quarterly
    Financial Data (Unaudited)    Quarter
    Ended(Dollars
    in thousands; except per share amounts)

March 31


June 30


September 30


December 312007:Interest Income

$
67,956


$
69,860


$
71,197


$
71,883Interest Expense


29,891



31,270



33,342



34,190Net Interest Income Before Provision for Credit Losses


38,065



38,590



37,855



37,693Provision for Credit Losses


6,132



3,023



8,464



20,704Non-Interest Income


9,987



10,692



9,526



9,801Non-Interest Expenses


20,969



21,490



21,249



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


20,951



24,769



17,668



(99,431
)Provision for Income Taxes


7,896



9,446



6,580



555NET INCOME
    (LOSS)

$
13,055


$
15,323


$
11,088


$
(99,986
)EARNINGS (LOSS) PER SHARE:Basic

$
0.27


$
0.32


$
0.23


$
(2.15
)Diluted

$
0.26


$
0.31


$
0.23


$
(2.15
)2006:Interest Income

$
58,535


$
63,906


$
68,664


$
69,084Interest Expense


21,680



25,509



28,934



30,306Net Interest Income Before Provision for Credit Losses


36,855



38,397



39,730



38,778Provision for Credit Losses


2,960



900



1,682



1,631Non-Interest Income


8,045



8,668



9,172



11,078Non-Interest Expenses


17,740



19,797



19,861



19,915Income Before Provision for Income Taxes


24,200



26,368



27,359



28,310Provision for Income Taxes


9,398



10,428



9,762



11,000NET INCOME

$
14,802


$
15,940


$
17,597


$
17,310EARNINGS PER SHARE:Basic

$
0.30


$
0.33


$
0.36


$
0.35Diluted

$
0.30


$
0.32


$
0.36


$
0.35    86




---



##### 



SIGNATURES    HANMI FINANCIAL CORPORATION
  By:
    /s/ Chung Hoon Youk Interim President and Chief Executive Officer
      /s/ Chung Hoon YoukChung
    Hoon YoukInterim President 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/ Richard B. C. LeeRichard
    B. C. LeeChairman of the Board

/s/ I Joon AhnI
    Joon AhnDirector/s/ Ki Tae HongKi
    Tae HongDirector

/s/ Joon Hyung LeeJoon
    Hyung LeeDirector/s/ Mark K. MasonMark
    K. MasonDirector

/s/ Chang Kyu ParkChang
    Kyu ParkDirector/s/ Joseph K. RhoJoseph
    K. Rho Director

/s/ Won R. YoonWon
    R. YoonDirector  87




---



##### 



HANMI FINANCIAL
    CORPORATION AND SUBSIDIARIES
 EXHIBIT INDEX  ExhibitNumber

Document3
.1

Certificate of Incorporation, As Amended
    (1)3
.2

Bylaws
    (1)3
.3

Certificate of Amendment to Bylaws
    (2)4
.1

Specimen Certificate of Registrant
    (1)10
.1

Hanmi Financial Corporation 2007 Equity Compensation Plan
    (3)10
.2

Separation Agreement between Hanmi Financial Corporation and
    Dr. Sung Won Sohn, dated December 27,
    2007(4)10
.3

Employment Offer Letter with Brian E. Cho, executed
    November 1, 2007
    (5)10
.4

Put Option Agreement between Hanmi Financial Corporation and
    John M. Eggemeyer dated April 17, 2007
    (6)10
.5

Put Option Agreement between Hanmi Financial Corporation and
    William J. Ruh dated April 17, 2007
    (6)14


Code of Ethics
    (7)21


Subsidiaries of the Registrant23


Consent of KPMG LLP31
.1

Rule 13a-14(a)/15d-14(a)
    Certification of Chief Executive Officer31
.2

Rule 13a-14(a)/15d-14(a)
    Certification of Chief Financial Officer32
.1

Certification of Chief Executive Officer Under Section 906
    of the Sarbanes-Oxley Act32
.2

Certification of Chief Financial Officer Under Section 906
    of the Sarbanes-Oxley Act   (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 Current Report on
    Form 8-K
    filed with the SEC on December 3, 2007.(6)
    
    Previously
    filed and incorporated by reference herein from Hanmi
    Financials Quarterly Report on
    Form 10-Q
    for the quarter ended March 31, 2007 filed with the SEC on
    May 10, 2007.(7)
    
    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. 88