##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
 For the Quarterly Period Ended June 30, 2007
 or
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
 For the Transition Period From  To
 Commission File Number: 000-30421
 HANMI FINANCIAL CORPORATION
 (Exact Name of Registrant as Specified in its Charter)
 Delaware
    
    95-4788120(State or Other Jurisdiction of Incorporation or Organization)
    
    (I.R.S. Employer Identification No.)3660 Wilshire Boulevard, Penthouse Suite A 
Los Angeles, California
    
    90010(Address of Principal Executive Offices)
    
    (Zip Code)
 (213) 382-2200
 (Registrants Telephone Number, Including Area Code)
 Not Applicable
 (Former Name, Former Address and Former Fiscal Year, If Changed Since Last Report)
 þ o
  þ o o
 o þ




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##### Table of Contents



HANMI FINANCIAL CORPORATION AND SUBSIDIARIES  QUARTERLY REPORT ON FORM 10-Q  THREE AND SIX MONTHS ENDED JUNE 30, 2007 AND 2006
 TABLE OF CONTENTS
 PagePART I  FINANCIAL INFORMATIONITEM 1.
    
    FINANCIAL STATEMENTSConsolidated Statements of Financial Condition (Unaudited)
    
    
    1Consolidated Statements of Income (Unaudited)
    
    
    2Consolidated Statements of Changes in Shareholders Equity and Comprehensive Income (Unaudited)
    
    
    3Consolidated Statements of Cash Flows (Unaudited)
    
    
    4Notes to Consolidated Financial Statements (Unaudited)
    
    
    5ITEM 2.
    
    MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
    
    
    12ITEM 3.
    
    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
    
    
    36ITEM 4.
    
    CONTROLS AND PROCEDURES
    
    
    36PART II  OTHER INFORMATIONITEM 1.
    
    LEGAL PROCEEDINGS
    
    
    37ITEM 1A.
    
    RISK FACTORS
    
    
    37ITEM 2.
    
    UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
    
    
    37ITEM 3.
    
    DEFAULTS UPON SENIOR SECURITIES
    
    
    37ITEM 4.
    
    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
    
    
    37ITEM 5.
    
    OTHER INFORMATION
    
    
    38ITEM 6.
    
    EXHIBITS
    
    
    38SIGNATURES
    
    
    
    
    39EXHIBIT 31.1EXHIBIT 31.2EXHIBIT 32.1EXHIBIT 32.2




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##### Table of Contents



PART I  FINANCIAL INFORMATION
 
 ITEM 1. FINANCIAL STATEMENTS
 
 HANMI FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (UNAUDITED)  (Dollars in Thousands)
 June 30,
    
    
    December 31,2007
    
    
    2006ASSETSCash and Due From Banks
    
    $
    98,020
    
    
    $
    97,501Federal Funds Sold
    
    
    23,800
    
    
    
    41,000Cash and Cash Equivalents
    
    
    121,820
    
    
    
    138,501Term Federal Funds Sold
    
    
    
    
    
    
    5,000Securities Held to Maturity, at Amortized Cost (Fair Value: 2007  $955; 2006  $969)
    
    
    954
    
    
    
    967Securities Available for Sale, at Fair Value
    
    
    363,778
    
    
    
    390,612Loans Receivable, Net of Allowance for Loan Losses of $32,190 and $27,557 at June 30,
2007 and December 31, 2006, Respectively
    
    
    3,013,527
    
    
    
    2,813,520Loans Held for Sale, at the Lower of Cost or Fair Value
    
    
    10,204
    
    
    
    23,870Customers Liability on Acceptances
    
    
    12,753
    
    
    
    8,403Premises and Equipment, Net
    
    
    20,361
    
    
    
    20,075Accrued Interest Receivable
    
    
    17,313
    
    
    
    16,919Other Real Estate Owned
    
    
    1,080
    
    
    
    Deferred Income Taxes
    
    
    13,742
    
    
    
    13,064Servicing Asset
    
    
    4,417
    
    
    
    4,579Goodwill
    
    
    209,941
    
    
    
    207,646Other Intangible Assets
    
    
    8,027
    
    
    
    6,312Federal Reserve Bank Stock
    
    
    11,733
    
    
    
    11,733Federal Home Loan Bank Stock
    
    
    13,619
    
    
    
    13,189Bank-Owned Life Insurance
    
    
    24,051
    
    
    
    23,592Other Assets
    
    
    23,577
    
    
    
    27,261TOTAL ASSETS
    
    $
    3,870,897
    
    
    $
    3,725,243LIABILITIES AND SHAREHOLDERS EQUITYLIABILITIES:Deposits:Noninterest-Bearing
    
    $
    720,214
    
    
    $
    728,347Interest-Bearing:Savings
    
    
    97,019
    
    
    
    99,255Money Market Checking and NOW Accounts
    
    
    438,973
    
    
    
    438,267Time Deposits of $100,000 or More
    
    
    1,408,237
    
    
    
    1,383,358Other Time Deposits
    
    
    308,703
    
    
    
    295,488Total Deposits
    
    
    2,973,146
    
    
    
    2,944,715Accrued Interest Payable
    
    
    23,343
    
    
    
    22,582Acceptances Outstanding
    
    
    12,753
    
    
    
    8,403FHLB Advances and Other Borrowings
    
    
    278,784
    
    
    
    169,037Junior Subordinated Debentures
    
    
    82,406
    
    
    
    82,406Other Liabilities
    
    
    14,431
    
    
    
    10,983Total Liabilities
    
    
    3,384,863
    
    
    
    3,238,126SHAREHOLDERS EQUITY:Common Stock, $.001 Par Value; Authorized 200,000,000 Shares; Issued 50,434,929
Shares (47,950,929 Shares Outstanding) and 50,239,613 Shares (49,076,613 Shares
Outstanding) at June 30, 2007 and December 31, 2006, Respectively
    
    
    50
    
    
    
    50Additional Paid-In Capital
    
    
    346,160
    
    
    
    344,810Accumulated Other Comprehensive Loss  Unrealized Loss on Securities Available for
Sale, Interest-Only Strips and Interest Rate Swaps, Net of Income Taxes of ($2,481)
and ($1,450) at June 30, 2007 and December 31, 2006, Respectively
    
    
    (4,197
    )
    
    
    (3,200
    )Retained Earnings
    
    
    187,996
    
    
    
    165,498530,009
    
    
    
    507,158Less Treasury Stock, at Cost; 2,484,000 and 1,163,000 Shares at June 30, 2007 and
December 31, 2006, Respectively
    
    
    (43,975
    )
    
    
    (20,041
    )Total Shareholders Equity
    
    
    486,034
    
    
    
    487,117TOTAL LIABILITIES AND SHAREHOLDERS EQUITY
    
    $
    3,870,897
    
    
    $
    3,725,243
  1




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##### Table of Contents



HANMI FINANCIAL CORPORATION AND SUBSIDIARIES
 
 CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)  (Dollars in Thousands, Except Per Share Data)
 Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2007
    
    
    2006
    
    
    2007
    
    
    2006INTEREST INCOME:Interest and Fees on Loans
    
    $
    65,212
    
    
    $
    58,870
    
    
    $
    127,773
    
    
    $
    112,017Interest on Investments
    
    
    4,472
    
    
    
    5,013
    
    
    
    9,136
    
    
    
    10,112Interest on Federal Funds Sold
    
    
    176
    
    
    
    23
    
    
    
    902
    
    
    
    312Interest on Term Federal Funds Sold
    
    
    
    
    
    
    
    
    
    
    5
    
    
    
    Total Interest Income
    
    
    69,860
    
    
    
    63,906
    
    
    
    137,816
    
    
    
    122,441INTEREST EXPENSE:Interest on Deposits
    
    
    26,691
    
    
    
    21,921
    
    
    
    52,772
    
    
    
    41,512Interest on FHLB Advances and Other Borrowings
    
    
    2,919
    
    
    
    2,001
    
    
    
    5,090
    
    
    
    2,615Interest on Junior Subordinated Debentures
    
    
    1,660
    
    
    
    1,587
    
    
    
    3,299
    
    
    
    3,062Total Interest Expense
    
    
    31,270
    
    
    
    25,509
    
    
    
    61,161
    
    
    
    47,189NET INTEREST INCOME BEFORE PROVISION FOR CREDIT LOSSES
    
    
    38,590
    
    
    
    38,397
    
    
    
    76,655
    
    
    
    75,252Provision for Credit Losses
    
    
    3,023
    
    
    
    900
    
    
    
    9,155
    
    
    
    3,860NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES
    
    
    35,567
    
    
    
    37,497
    
    
    
    67,500
    
    
    
    71,392NON-INTEREST INCOME:Service Charges on Deposit Accounts
    
    
    4,438
    
    
    
    4,183
    
    
    
    8,926
    
    
    
    8,414Insurance Commissions
    
    
    1,279
    
    
    
    243
    
    
    
    2,404
    
    
    
    396Trade Finance Fees
    
    
    1,177
    
    
    
    1,116
    
    
    
    2,467
    
    
    
    2,187Remittance Fees
    
    
    520
    
    
    
    532
    
    
    
    991
    
    
    
    1,020Other Service Charges and Fees
    
    
    574
    
    
    
    614
    
    
    
    1,190
    
    
    
    1,148Bank-Owned Life Insurance Income
    
    
    229
    
    
    
    215
    
    
    
    459
    
    
    
    433Increase in Fair Value of Derivatives
    
    
    222
    
    
    
    109
    
    
    
    314
    
    
    
    334Other Income
    
    
    491
    
    
    
    345
    
    
    
    766
    
    
    
    626Gain on Sales of Loans
    
    
    1,762
    
    
    
    1,311
    
    
    
    3,162
    
    
    
    2,150Gain on Sales of Securities Available for Sale
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5Total Non-Interest Income
    
    
    10,692
    
    
    
    8,668
    
    
    
    20,679
    
    
    
    16,713NON-INTEREST EXPENSES:Salaries and Employee Benefits
    
    
    10,782
    
    
    
    10,691
    
    
    
    22,543
    
    
    
    19,852Occupancy and Equipment
    
    
    2,571
    
    
    
    2,434
    
    
    
    5,083
    
    
    
    4,640Data Processing
    
    
    1,665
    
    
    
    1,454
    
    
    
    3,228
    
    
    
    2,883Advertising and Promotion
    
    
    889
    
    
    
    811
    
    
    
    1,550
    
    
    
    1,457Supplies and Communication
    
    
    704
    
    
    
    576
    
    
    
    1,292
    
    
    
    1,212Professional Fees
    
    
    647
    
    
    
    492
    
    
    
    1,121
    
    
    
    1,160Amortization of Other Intangible Assets
    
    
    592
    
    
    
    605
    
    
    
    1,206
    
    
    
    1,230Decrease in Fair Value of Embedded Options
    
    
    196
    
    
    
    112
    
    
    
    196
    
    
    
    214Other Operating Expenses
    
    
    3,444
    
    
    
    2,622
    
    
    
    6,240
    
    
    
    4,889Total Non-Interest Expenses
    
    
    21,490
    
    
    
    19,797
    
    
    
    42,459
    
    
    
    37,537INCOME BEFORE PROVISION FOR INCOME TAXES
    
    
    24,769
    
    
    
    26,368
    
    
    
    45,720
    
    
    
    50,568Provision for Income Taxes
    
    
    9,446
    
    
    
    10,428
    
    
    
    17,342
    
    
    
    19,826NET INCOME
    
    $
    15,323
    
    
    $
    15,940
    
    
    $
    28,378
    
    
    $
    30,742EARNINGS PER SHARE:Basic
    
    $
    0.32
    
    
    $
    0.33
    
    
    $
    0.58
    
    
    $
    0.63Diluted
    
    $
    0.31
    
    
    $
    0.32
    
    
    $
    0.58
    
    
    $
    0.62WEIGHTED-AVERAGE SHARES OUTSTANDING:Basic
    
    
    48,397,824
    
    
    
    48,822,729
    
    
    
    48,678,399
    
    
    
    48,768,881Diluted
    
    
    48,737,574
    
    
    
    49,404,204
    
    
    
    49,110,835
    
    
    
    49,366,709DIVIDENDS DECLARED PER SHARE
    
    $
    0.06
    
    
    $
    0.06
    
    
    $
    0.12
    
    
    $
    0.12
  2




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##### Table of Contents



HANMI FINANCIAL CORPORATION AND SUBSIDIARIES
 
 CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS EQUITY AND COMPREHENSIVE INCOME (UNAUDITED)  (Dollars in Thousands)
 Shareholders EquityAccumulatedCommon Stock  Number of Shares
    
    
    
    
    
    
    Additional
    
    
    
    
    
    
    Other
    
    
    
    
    
    
    Treasury
    
    
    TotalTreasury
    
    
    
    
    
    
    Common
    
    
    Paid-in
    
    
    Unearned
    
    
    Comprehensive
    
    
    Retained
    
    
    Stock,
    
    
    ShareholdersIssued
    
    
    Stock
    
    
    Outstanding
    
    
    Stock
    
    
    Capital
    
    
    Compensation
    
    
    Loss
    
    
    Earnings
    
    
    at Cost
    
    
    EquityBALANCE  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
    
    
    249,782
    
    
    
    
    
    
    
    249,782
    
    
    
    
    
    
    
    2,076
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,076Share-Based Compensation Expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    574
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    574Tax Benefit from Exercises of Stock Options
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    329
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    329Cash Dividends
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (5,929
    )
    
    
    
    
    
    
    (5,929
    )Comprehensive Income:Net Income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    30,742
    
    
    
    
    
    
    
    30,742Change in Unrealized Loss on Securities Available for Sale,
Interest-Only Strips and Interest Rate Swaps, Net of Tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3,417
    )
    
    
    
    
    
    
    
    
    
    
    (3,417
    )Total Comprehensive Income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    27,325BALANCE  JUNE 30, 2006
    
    
    50,071,580
    
    
    
    (1,163,000
    )
    
    
    48,908,580
    
    
    $
    50
    
    
    $
    342,054
    
    
    $
    
    
    
    $
    (7,800
    )
    
    $
    136,467
    
    
    $
    (20,041
    )
    
    $
    450,730BALANCE  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
    
    
    93,135
    
    
    
    
    
    
    
    93,135
    
    
    
    
    
    
    
    687
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    687Share-Based Compensation Expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    867
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    867Tax Benefit from Exercises of Stock Options
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    150
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    150Cash Dividends
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (5,880
    )
    
    
    
    
    
    
    (5,880
    )Repurchase of Common Stock
    
    
    
    
    
    
    (1,321,000
    )
    
    
    (1,321,000
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (23,934
    )
    
    
    (23,934
    )Repurchase of Stock Warrants
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,552
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,552
    )Comprehensive Income:Net Income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    28,378
    
    
    
    
    
    
    
    28,378Change in Unrealized Loss on Securities Available for Sale,
Interest-Only Strips and Interest Rate Swaps, Net of Tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (997
    )
    
    
    
    
    
    
    
    
    
    
    (997
    )Total Comprehensive Income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    27,381BALANCE  JUNE 30, 2007
    
    
    50,434,929
    
    
    
    (2,484,000
    )
    
    
    47,950,929
    
    
    $
    50
    
    
    $
    346,160
    
    
    $
    
    
    
    $
    (4,197
    )
    
    $
    187,996
    
    
    $
    (43,975
    )
    
    $
    486,034
  3




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##### Table of Contents



HANMI FINANCIAL CORPORATION AND SUBSIDIARIES
 
 CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)  (In Thousands)
 Six Months EndedJune 30,2007
    
    
    2006CASH FLOWS FROM OPERATING ACTIVITIES:Net Income
    
    $
    28,378
    
    
    $
    30,742Adjustments to Reconcile Net Income to Net Cash Provided By Operating Activities:Depreciation and Amortization of Premises and Equipment
    
    
    1,436
    
    
    
    1,472Amortization of Premiums and Accretion of Discounts on Investments, Net
    
    
    100
    
    
    
    150Amortization of Other Intangible Assets
    
    
    1,206
    
    
    
    1,230Share-Based Compensation Expense
    
    
    867
    
    
    
    574Provision for Credit Losses
    
    
    9,155
    
    
    
    3,860Federal Home Loan Bank Stock Dividend
    
    
    (353
    )
    
    
    (295
    )Gain on Sales of Securities Available for Sale
    
    
    
    
    
    
    (5
    )Increase in Fair Value of Derivatives
    
    
    (314
    )
    
    
    (334
    )Decrease in Fair Value of Embedded Options
    
    
    196
    
    
    
    214Gain on Sales of Loans
    
    
    (3,162
    )
    
    
    (2,150
    )Loss on Sales of Premises and Equipment
    
    
    11
    
    
    
    15Excess Tax Benefit from Exercises of Stock Options
    
    
    (150
    )
    
    
    (329
    )Deferred Tax Benefit
    
    
    (841
    )
    
    
    (2,920
    )Origination of Loans Held for Sale
    
    
    (62,289
    )
    
    
    (49,445
    )Proceeds from Sales of Loans Held for Sale
    
    
    79,117
    
    
    
    52,660Increase in Accrued Interest Receivable
    
    
    (394
    )
    
    
    (779
    )Decrease (Increase) in Servicing Asset
    
    
    162
    
    
    
    (392
    )Increase in Cash Surrender Value of Bank-Owned Life Insurance
    
    
    (459
    )
    
    
    (433
    )Decrease (Increase) in Other Assets
    
    
    3,988
    
    
    
    (1,777
    )Increase in Accrued Interest Payable
    
    
    761
    
    
    
    3,408Increase in Other Liabilities
    
    
    3,037
    
    
    
    6,699Other, Net
    
    
    1,306
    
    
    
    Net Cash Provided By Operating Activities
    
    
    61,758
    
    
    
    42,165CASH FLOWS FROM INVESTING ACTIVITIES:Proceeds from Redemption of Federal Reserve Bank Stock
    
    
    
    
    
    
    590Proceeds from Matured Term Federal Funds Sold
    
    
    5,000
    
    
    
    Proceeds from Matured or Called Securities Available for Sale
    
    
    24,293
    
    
    
    28,276Proceeds from Matured or Called Securities Held to Maturity
    
    
    
    
    
    
    17Proceeds from Sales of Securities Available for Sale
    
    
    
    
    
    
    5,005Net Increase in Loans Receivable
    
    
    (210,642
    )
    
    
    (296,565
    )Purchases of Federal Home Loan Bank Stock
    
    
    (77
    )
    
    
    (311
    )Purchases of Securities Available for Sale
    
    
    
    
    
    
    (6,183
    )Purchases of Premises and Equipment
    
    
    (1,715
    )
    
    
    (1,015
    )Business Acquisitions, Net of Cash Acquired
    
    
    (4,121
    )
    
    
    Net Cash Used In Investing Activities
    
    
    (187,262
    )
    
    
    (270,186
    )CASH FLOWS FROM FINANCING ACTIVITIES:Increase in Deposits
    
    
    28,431
    
    
    
    68,898Proceeds from Exercises of Stock Options and Stock Warrants
    
    
    687
    
    
    
    2,076Tax Benefit from Exercises of Stock Options
    
    
    150
    
    
    
    329Stock Issued for Business Acquisitions
    
    
    2,198
    
    
    
    Cash Paid to Acquire Treasury Stock
    
    
    (23,934
    )
    
    
    Cash Paid to Acquire Stock Warrants
    
    
    (2,552
    )
    
    
    Cash Dividends Paid
    
    
    (5,880
    )
    
    
    (5,929
    )Proceeds from Long-Term FHLB Advances and Other Borrowings
    
    
    
    
    
    
    30,000Repayment of Long-Term FHLB Advances and Other Borrowings
    
    
    (15,219
    )
    
    
    (207
    )Net Change in Short-Term FHLB Advances and Other Borrowings
    
    
    124,942
    
    
    
    80,748Net Cash Provided By Financing Activities
    
    
    108,823
    
    
    
    175,915NET DECREASE IN CASH AND CASH EQUIVALENTS
    
    
    (16,681
    )
    
    
    (52,106
    )Cash and Cash Equivalents  Beginning of Period
    
    
    138,501
    
    
    
    163,477CASH AND CASH EQUIVALENTS END OF PERIOD
    
    $
    121,820
    
    
    $
    111,371Supplemental Disclosures of Cash Flow Information:Interest Paid
    
    $
    60,400
    
    
    $
    50,597Income Taxes Paid
    
    $
    15,556
    
    
    $
    16,208Transfers to
Other Real Estate Owned
    
    $
    1,080
    
    
    $
    
  4




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##### Table of Contents



HANMI FINANCIAL CORPORATION AND SUBSIDIARIES
 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(UNAUDITED)  THREE AND SIX MONTHS ENDED JUNE 30, 2007 AND 2006
 NOTE 1  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 Basis of Presentation
     Note 1  Summary of
Significant Accounting Policies
  NOTE 2  SHARE-BASED COMPENSATION
 2007 Equity Compensation Plan
   5




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##### Table of Contents



HANMI FINANCIAL CORPORATION AND SUBSIDIARIES  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(UNAUDITED)  THREE AND SIX MONTHS ENDED JUNE 30, 2007 AND 2006 (Continued)
 NOTE 2  SHARE-BASED COMPENSATION (Continued)
 Share-Based Compensation Expense
  Three Months Ended
    
    Six Months EndedJune 30,
    
    June 30,2007
    
    2006
    
    2007
    
    2006(In Thousands)Share-Based Compensation Expense
    
    $
    387
    
    
    $
    473
    
    
    $
    867
    
    
    $
    574Related Tax Benefits
    
    $
    163
    
    
    $
    199
    
    
    $
    365
    
    
    $
    241
 Unrecognized
Share-Based Compensation Expense
  AverageExpectedUnrecognized
    
    
    RecognitionExpense
    
    
    Period(Dollars in Thousands)Stock Option Awards:2007 Equity Compensation Plan
    
    $
    4,478
    
    
    3.3 years2004 CEO Stock Option Plan
    
    
    912
    
    
    3.3 yearsRestricted Stock Award
    
    
    605
    
    
    1.7 yearsTotal Unrecognized Share-Based Compensation Expense
    
    $
    5,995
    
    
    3.1 years
 Share-Based Payment Award Activity
  Weighted-
    
    Weighted-
    
    AggregateAverage
    
    Average
    
    IntrinsicNumber
    
    Exercise
    
    Remaining
    
    Value ofof
    
    Price Per
    
    Contractual
    
    In-the-MoneyShares
    
    Share
    
    Life
    
    Options(Dollars in Thousands, Except Per Share Data)Options Outstanding  Beginning of Period
    
    
    1,670,470
    
    
    $
    15.49
    
    
    7.8 years
    
    $
    6,732
    (1)Options Granted
    
    
    15,667
    
    
    $
    15.35
    
    
    5.7 yearsOptions Exercised
    
    
    (49,192
    )
    
    $
    6.07
    
    
    4.1 yearsOptions Forfeited
    
    
    (139,467
    )
    
    $
    19.31
    
    
    8.8 yearsOptions Outstanding  End of Period
    
    
    1,497,478
    
    
    $
    15.44
    
    
    7.5 years
    
    $
    4,094
    (2)Options Exercisable  End of Period
    
    
    604,746
    
    
    $
    11.51
    
    
    5.9 years
    
    $
    3,491
    (2)
 
 (1)
    
    Intrinsic value represents the excess of the closing stock price on
the last trading day of the period, which was $19.06 as of March 30, 2007, over
the exercise price, multiplied by the number of options.(2)
    
    Intrinsic value represents the excess of the closing stock price on
the last trading day of the period, which was $17.06 as of June 29, 2007, over
the exercise price, multiplied by the number of options.  6




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##### Table of Contents



HANMI FINANCIAL CORPORATION AND SUBSIDIARIES  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(UNAUDITED)  THREE AND SIX MONTHS ENDED JUNE 30, 2007 AND 2006 (Continued)
 NOTE 2  SHARE-BASED COMPENSATION (Continued)
  Weighted-
    
    Weighted-
    
    AggregateAverage
    
    Average
    
    IntrinsicNumber
    
    Exercise
    
    Remaining
    
    Value ofof
    
    Price Per
    
    Contractual
    
    In-the-MoneyShares
    
    Share
    
    Life
    
    Options(Dollars in Thousands, Except Per Share Data)Options Outstanding  Beginning of Period
    
    
    1,755,813
    
    
    $
    15.31
    
    
    8.0 years
    
    $
    12,678
    (1)Options Granted
    
    
    30,667
    
    
    $
    17.98
    
    
    7.6 yearsOptions Exercised
    
    
    (93,135
    )
    
    $
    7.38
    
    
    4.5 yearsOptions Forfeited
    
    
    (195,867
    )
    
    $
    18.49
    
    
    8.6 yearsOptions Outstanding  End of Period
    
    
    1,497,478
    
    
    $
    15.44
    
    
    7.5 years
    
    $
    4,094
    (2)Options Exercisable  End of Period
    
    
    604,746
    
    
    $
    11.51
    
    
    5.9 years
    
    $
    3,491
    (2)
 
 (1)
    
    Intrinsic value represents the excess of the closing stock price on
the last trading day of the period, which was $22.53 as of December 29, 2006,
over the exercise price, multiplied by the number of options.(2)
    
    Intrinsic value represents the excess of the closing stock price on
the last trading day of the period, which was $17.06 as of June 29, 2007, over
the exercise price, multiplied by the number of options.   AggregateIntrinsicNumber
    
    Exercise
    
    Remaining
    
    Value ofof
    
    Price Per
    
    Contractual
    
    In-the-MoneyShares
    
    Share
    
    Life
    
    Options(Dollars in Thousands, Except Per Share Data)Options Outstanding  Beginning of Period
    
    
    350,000
    
    
    $
    17.17
    
    
    7.8 years
    
    $
    663
    (1)Options Outstanding  End of Period
    
    
    350,000
    
    
    $
    17.17
    
    
    7.4 years
    
    $
    
    (2)Options Exercisable  End of Period
    
    
    116,666
    
    
    $
    17.17
    
    
    7.4 years
    
    $
    
    (2)
 
 (1)
    
    Intrinsic value represents the excess of the closing stock price on
the last trading day of the period, which was $19.06 as of March 30, 2007, over
the exercise price, multiplied by the number of options.(2)
    
    Intrinsic value represents the excess of the closing stock price on
the last trading day of the period, which was $17.06 as of June 29, 2007, over
the exercise price, multiplied by the number of options. 7




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##### Table of Contents



HANMI FINANCIAL CORPORATION AND SUBSIDIARIES  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(UNAUDITED)  THREE AND SIX MONTHS ENDED JUNE 30, 2007 AND 2006 (Continued)
 NOTE 2  SHARE-BASED COMPENSATION (Continued)
  AggregateIntrinsicNumber
    
    Exercise
    
    Remaining
    
    Value ofof
    
    Price Per
    
    Contractual
    
    In-the-MoneyShares
    
    Share
    
    Life
    
    Options(Dollars in Thousands, Except Per Share Data)Options Outstanding  Beginning of Period
    
    
    350,000
    
    
    $
    17.17
    
    
    7.9 years
    
    $
    1,878
    (1)Options Outstanding  End of Period
    
    
    350,000
    
    
    $
    17.17
    
    
    7.4 years
    
    $
    
    (2)Options Exercisable  End of Period
    
    
    116,666
    
    
    $
    17.17
    
    
    7.4 years
    
    $
    
    (2)
 
 (1)
    
    Intrinsic value represents the excess of the closing stock price on
the last trading day of the period, which was $22.53 as of December 29, 2006,
over the exercise price, multiplied by the number of options.(2)
    
    Intrinsic value represents the excess of the closing stock price on
the last trading day of the period, which was $17.06 as of June 29, 2007, over
the exercise price, multiplied by the number of options.  Three Months Ended
    
    Six Months EndedJune 30, 2007
    
    June 30, 2007Number
    
    Grant Date
    
    Number
    
    Grant Dateof
    
    Fair Value
    
    of
    
    Fair ValueShares
    
    Per Share
    
    Shares
    
    Per ShareNon-Vested  Beginning of Period
    
    
    40,000
    
    
    $
    18.15
    
    
    
    60,000
    
    
    $
    18.15Vested
    
    
    
    
    
    $
    18.15
    
    
    
    (20,000
    )
    
    $
    18.15Non-Vested  End of Period
    
    
    40,000
    
    
    $
    18.15
    
    
    
    40,000
    
    
    $
    18.15
 NOTE 3  EARNINGS PER SHARE
   8




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##### Table of Contents



HANMI FINANCIAL CORPORATION AND SUBSIDIARIES  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(UNAUDITED)  THREE AND SIX MONTHS ENDED JUNE 30, 2007 AND 2006 (Continued)
 NOTE 3  EARNINGS PER SHARE (Continued)
  2007
    
    
    2006Weighted-
    
    
    
    
    
    
    
    
    
    
    Weighted-Average
    
    
    Per
    
    
    
    
    
    
    Average
    
    
    PerIncome
    
    
    Shares
    
    
    Share
    
    
    Income
    
    
    Shares
    
    
    Share(Numerator)
    
    
    (Denominator)
    
    
    Amount
    
    
    (Numerator)
    
    
    (Denominator)
    
    
    Amount(Dollars in Thousands, Except Per Share Data)Three Months Ended June 30:Basic EPS  Income Available to Common Shareholders
    
    $
    15,323
    
    
    
    48,397,824
    
    
    $
    0.32
    
    
    $
    15,940
    
    
    
    48,822,729
    
    
    $
    0.33Effect of Dilutive Securities  Options and Warrants
    
    
    
    
    
    
    339,750
    
    
    
    (0.01
    )
    
    
    
    
    
    
    581,475
    
    
    
    (0.01
    )Diluted EPS  Income Available to Common
Shareholders
    
    $
    15,323
    
    
    
    48,737,574
    
    
    $
    0.31
    
    
    $
    15,940
    
    
    
    49,404,204
    
    
    $
    0.32Six Months Ended June 30:Basic EPS  Income Available to Common Shareholders
    
    $
    28,378
    
    
    
    48,678,399
    
    
    $
    0.58
    
    
    $
    30,742
    
    
    
    48,768,881
    
    
    $
    0.63Effect of Dilutive Securities  Options and Warrants
    
    
    
    
    
    
    432,436
    
    
    
    
    
    
    
    
    
    
    
    597,828
    
    
    
    (0.01
    )Diluted EPS  Income Available to Common
Shareholders
    
    $
    28,378
    
    
    
    49,110,835
    
    
    $
    0.58
    
    
    $
    30,742
    
    
    
    49,366,709
    
    
    $
    0.62
  NOTE 4  INCOME TAXES
 Accounting for Uncertainty in Income
Taxes, an Interpretation of FASB Statement No. 109
   NOTE 5  SHAREHOLDERS EQUITY
 Stock Warrants
  9




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##### Table of Contents



HANMI FINANCIAL CORPORATION AND SUBSIDIARIES  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(UNAUDITED)  THREE AND SIX MONTHS ENDED JUNE 30, 2007 AND 2006 (Continued)
 NOTE 5  SHAREHOLDERS EQUITY (Continued)
   Repurchase of Common Stock
  NOTE 6  OFF-BALANCE SHEET COMMITMENTS
  10




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##### Table of Contents



HANMI FINANCIAL CORPORATION AND SUBSIDIARIES  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(UNAUDITED)  THREE AND SIX MONTHS ENDED JUNE 30, 2007 AND 2006 (Continued)
 NOTE 6  OFF-BALANCE SHEET COMMITMENTS (Continued)
  June 30,
    
    
    December 31,2007
    
    
    2006(In Thousands)Commitments to Extend Credit
    
    $
    527,000
    
    
    $
    578,347Commercial Letters of Credit
    
    
    55,760
    
    
    
    65,158Standby Letters of Credit
    
    
    42,463
    
    
    
    48,289Unused Credit Card Lines
    
    
    18,771
    
    
    
    17,031Total Undisbursed Loan Commitments
    
    $
    643,994
    
    
    $
    708,825
 NOTE 7  SEGMENT REPORTING
  11




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##### Table of Contents



ITEM 2.
    
    MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
 FORWARD-LOOKING STATEMENTS
 Item 2. Managements Discussion and Analysis of Financial
Condition and Results of Operations 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
  CRITICAL ACCOUNTING POLICIES
 Notes to Consolidated
Financial Statements Item 7.
Managements Discussion and Analysis of Financial Condition and Results of Operations  Critical
Accounting Policies
 12




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##### Table of Contents



SELECTED FINANCIAL DATA
  As of and for theThree Months EndedJune 30,2007
    
    2006(Dollars in Thousands, Except Per Share Data)AVERAGE BALANCES:Average Gross Loans, Net (1)
    
    $
    3,014,895
    
    
    $
    2,729,218Average Investment Securities
    
    $
    375,598
    
    
    $
    425,371Average Interest-Earning Assets
    
    $
    3,429,123
    
    
    $
    3,180,999Average Total Assets
    
    $
    3,818,170
    
    
    $
    3,570,389Average Deposits
    
    $
    2,967,748
    
    
    $
    2,832,218Average Borrowings
    
    $
    304,744
    
    
    $
    248,480Average Interest-Bearing Liabilities
    
    $
    2,551,665
    
    
    $
    2,341,481Average Shareholders Equity
    
    $
    495,719
    
    
    $
    449,664Average Tangible Equity (2)
    
    $
    277,414
    
    
    $
    232,802PER SHARE DATA:Earnings Per Share  Basic
    
    $
    0.32
    
    
    $
    0.33Earnings Per Share  Diluted
    
    $
    0.31
    
    
    $
    0.32Common Shares Outstanding at End of Period
    
    
    47,950,929
    
    
    
    48,908,580Book Value Per Share (3)
    
    $
    10.14
    
    
    $
    9.22Tangible Book Value Per Share (4)
    
    $
    5.59
    
    
    $
    4.82Cash Dividends Per Share
    
    $
    0.06
    
    
    $
    0.06SELECTED PERFORMANCE RATIOS:Return on Average Assets (5) (6)
    
    
    1.61
    %
    
    
    1.79
    %Return on Average Shareholders Equity (5) (7)
    
    
    12.40
    %
    
    
    14.22
    %Return on Average Tangible Equity (5) (8)
    
    
    22.15
    %
    
    
    27.46
    %Net Interest Spread (9)
    
    
    3.25
    %
    
    
    3.69
    %Net Interest Margin (10)
    
    
    4.51
    %
    
    
    4.84
    %Efficiency Ratio (11)
    
    
    43.61
    %
    
    
    42.06
    %Dividend Payout Ratio (12)
    
    
    18.78
    %
    
    
    18.41
    %Average Shareholders Equity to Average Total Assets
    
    
    12.98
    %
    
    
    12.59
    %SELECTED CAPITAL RATIOS:(13)Total Risk-Based Capital Ratio:Hanmi
Financial Corporation
    
    
    11.59
    %
    
    
    12.03
    %Hanmi Bank
    
    
    11.45
    %
    
    
    12.05
    %Tier 1 Risk-Based Capital Ratio:Hanmi Financial Corporation
    
    
    10.57
    %
    
    
    11.02
    %Hanmi Bank
    
    
    10.42
    %
    
    
    11.05
    %Tier 1 Leverage Ratio:Hanmi Financial Corporation
    
    
    9.74
    %
    
    
    9.61
    %Hanmi Bank
    
    
    9.61
    %
    
    
    9.63
    %SELECTED ASSET QUALITY RATIOS:Non-Performing Loans to Total Gross Loans (14)
    
    
    0.74
    %
    
    
    0.43
    %Non-Performing Assets to Total Assets (15)
    
    
    0.61
    %
    
    
    0.33
    %Net Loan Charge-Offs to Average Total Gross Loans (16)
    
    
    0.33
    %
    
    
    0.05
    %Allowance for Loan Losses to Total Gross Loans
    
    
    1.05
    %
    
    
    0.98
    %Allowance for Loan Losses to Non-Performing Loans
    
    
    142.30
    %
    
    
    224.54
    %
 
 (1)
    
    Loans are net of deferred fees and related direct costs.(2)
    
    Average tangible equity is calculated by subtracting average goodwill and average
core deposit intangible assets from average shareholders equity. See Non-GAAP Financial
Measures.(3)
    
    Total shareholders equity divided by common shares outstanding.(4)
    
    Tangible equity divided by common shares outstanding. See Non-GAAP Financial
Measures.(5)
    
    Calculation based upon annualized net income.(6)
    
    Net income divided by average total assets.(7)
    
    Net income divided by average shareholders equity.(8)
    
    Net income divided by average tangible equity. See Non-GAAP Financial Measures.(9)
    
    Average yield earned on interest-earning assets less average rate paid on
interest-bearing liabilities.(10)
    
    Net interest income before provision for credit losses divided by average
interest-earning assets.(11)
    
    Total non-interest expenses divided by the sum of net interest income before
provision for credit losses and total non-interest income.(12)
    
    Cash dividends per share times common shares outstanding divided by net income.(13)
    
    The required ratios for a well-capitalized institution, as defined by regulations
of the Board of Governors of the Federal Reserve System, are 10 percent for Total Risk-Based
Capital Ratio (total capital divided by total risk-weighted assets); 6 percent for Tier 1
Risk-Based Capital Ratio (Tier 1 capital divided by total risk-weighted assets); and 5 percent
for Tier 1 Leverage Ratio (Tier 1 capital divided by average total assets).(14)
    
    Non-performing loans consist of non-accrual loans, loans past due 90 days or more
and restructured loans.(15)
    
    Non-performing assets consist of non-performing loans (see footnote (14) above) and
other real estate owned.(16)
    
    Calculation based upon annualized net loan charge-offs. 13




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##### Table of Contents



As of and for theSix Months EndedJune 30,2007
    
    2006(Dollars in Thousands, Except Per Share Data)AVERAGE BALANCES:Average Gross Loans, Net (1)
    
    $
    2,949,129
    
    
    $
    2,638,822Average Investment Securities
    
    $
    381,113
    
    
    $
    431,440Average Interest-Earning Assets
    
    $
    3,389,901
    
    
    $
    3,109,051Average Total Assets
    
    $
    3,780,147
    
    
    $
    3,497,310Average Deposits
    
    $
    2,956,629
    
    
    $
    2,821,648Average Borrowings
    
    $
    278,316
    
    
    $
    193,691Average Interest-Bearing Liabilities
    
    $
    2,519,725
    
    
    $
    2,278,944Average Shareholders Equity
    
    $
    497,444
    
    
    $
    443,507Average Tangible Equity (2)
    
    $
    278,835
    
    
    $
    227,642PER SHARE DATA:Earnings Per Share  Basic
    
    $
    0.58
    
    
    $
    0.63Earnings Per Share  Diluted
    
    $
    0.58
    
    
    $
    0.62Cash Dividends Per Share
    
    $
    0.12
    
    
    $
    0.12SELECTED PERFORMANCE RATIOS:Return on Average Assets (3) (4)
    
    
    1.51
    %
    
    
    1.77
    %Return on Average Shareholders Equity (3) (5)
    
    
    11.50
    %
    
    
    13.98
    %Return on Average Tangible Equity (3) (6)
    
    
    20.52
    %
    
    
    27.23
    %Net Interest Spread (7)
    
    
    3.25
    %
    
    
    3.76
    %Net Interest Margin (8)
    
    
    4.56
    %
    
    
    4.88
    %Efficiency Ratio (9)
    
    
    43.62
    %
    
    
    40.82
    %Dividend Payout Ratio (10)
    
    
    20.28
    %
    
    
    19.09
    %Average Shareholders Equity to Average Total Assets
    
    
    13.16
    %
    
    
    12.68
    %
 
 (1)
    
    Loans are net of deferred fees and related direct costs.(2)
    
    Average tangible equity is calculated by subtracting average goodwill and average
core deposit intangible assets from average shareholders equity. See Non-GAAP Financial
Measures.(3)
    
    Calculation based upon annualized net income.(4)
    
    Net income divided by average total assets.(5)
    
    Net income divided by average shareholders equity.(6)
    
    Net income divided by average tangible equity. See Non-GAAP Financial Measures.(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)
    
    Cash dividends per share times common shares outstanding divided by net income. 14




---



##### Table of Contents



Non-GAAP Financial Measures
 Return on Average Tangible Equity
   Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2007
    
    
    2006
    
    
    2007
    
    
    2006(Dollars in Thousands)Average Shareholders Equity
    
    $
    495,719
    
    
    $
    449,664
    
    
    $
    497,444
    
    
    $
    443,507Less Average Goodwill and Average Other Intangible Assets
    
    
    (218,305
    )
    
    
    (216,862
    )
    
    
    (218,609
    )
    
    
    (215,865
    )Average Tangible Equity
    
    $
    277,414
    
    
    $
    232,802
    
    
    $
    278,835
    
    
    $
    227,642Return on Average Shareholders Equity
    
    
    12.40
    %
    
    
    14.22
    %
    
    
    11.50
    %
    
    
    13.98
    %Effect of Average Goodwill and Average Other Intangible Assets
    
    
    9.75
    %
    
    
    13.24
    %
    
    
    9.02
    %
    
    
    13.25
    %Return on Average Tangible Equity
    
    
    22.15
    %
    
    
    27.46
    %
    
    
    20.52
    %
    
    
    27.23
    %
 Tangible Book Value Per Share
   June 30,2007
    
    
    2006(Dollars in Thousands; ExceptPer Share Data)Total Shareholders Equity
    
    $
    486,034
    
    
    $
    450,730Less Goodwill and Other Intangible Assets
    
    
    (217,968
    )
    
    
    (215,107
    )Tangible Equity
    
    $
    268,066
    
    
    $
    235,623Book Value Per Share
    
    $
    10.14
    
    
    $
    9.22Effect of Goodwill and Other Intangible Assets
    
    
    (4.55
    )
    
    
    (4.40
    )Tangible Book Value Per Share
    
    $
    5.59
    
    
    $
    4.82
 15




---



##### Table of Contents



RESULTS OF OPERATIONS
 Overview
 Three Months Ended June 30, 2007 vs. 2006
        Six Months Ended June 30, 2007 vs. 2006
  16




---



##### Table of Contents



Net Interest Income Before Provision for Credit Losses
  17




---



##### Table of Contents



Three Months Ended June 30, 2007 vs. 2006
  Three Months EndedJune 30, 2007
    
    
    June 30, 2006Interest
    
    
    Average
    
    
    
    
    
    
    Interest
    
    
    AverageAverage
    
    
    Income/
    
    
    Yield/
    
    
    Average
    
    
    Income/
    
    
    Yield/Balance
    
    
    Expense
    
    
    Rate
    
    
    Balance
    
    
    Expense
    
    
    Rate(Dollars in Thousands)ASSETSInterest-Earning Assets:Gross Loans, Net (1)
    
    $
    3,014,895
    
    
    $
    65,212
    
    
    
    8.68
    %
    
    $
    2,729,218
    
    
    $
    58,870
    
    
    
    8.65
    %Municipal Securities (2)
    
    
    72,284
    
    
    
    762
    
    
    
    4.22
    %
    
    
    73,061
    
    
    
    773
    
    
    
    4.23
    %Obligations of Other U.S. Government Agencies
    
    
    118,696
    
    
    
    1,233
    
    
    
    4.16
    %
    
    
    127,184
    
    
    
    1,316
    
    
    
    4.14
    %Other Debt Securities
    
    
    184,618
    
    
    
    2,141
    
    
    
    4.64
    %
    
    
    225,126
    
    
    
    2,594
    
    
    
    4.61
    %Equity Securities
    
    
    25,290
    
    
    
    336
    
    
    
    5.31
    %
    
    
    24,524
    
    
    
    330
    
    
    
    5.38
    %Federal Funds Sold
    
    
    13,340
    
    
    
    176
    
    
    
    5.28
    %
    
    
    1,859
    
    
    
    23
    
    
    
    4.95
    %Interest-Earning Deposits
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    27
    
    
    
    
    
    
    
    3.64
    %Total Interest-Earning Assets
    
    
    3,429,123
    
    
    
    69,860
    
    
    
    8.17
    %
    
    
    3,180,999
    
    
    
    63,906
    
    
    
    8.06
    %Noninterest-Earning Assets:Cash and Cash Equivalents
    
    
    91,690
    
    
    
    
    
    
    
    
    
    
    
    94,876Allowance for Loan Losses
    
    
    (31,046
    )
    
    
    
    
    
    
    
    
    
    
    (26,629
    )Other Assets
    
    
    328,403
    
    
    
    
    
    
    
    
    
    
    
    321,143Total Noninterest-Earning Assets
    
    
    389,047
    
    
    
    
    
    
    
    
    
    
    
    389,390Total Assets
    
    $
    3,818,170
    
    
    
    
    
    
    
    
    
    
    $
    3,570,389LIABILITIES AND SHAREHOLDERS EQUITYInterest-Bearing Liabilities:Deposits:Savings
    
    $
    99,457
    
    
    
    502
    
    
    
    2.02
    %
    
    $
    112,341
    
    
    
    480
    
    
    
    1.71
    %Money Market Checking and NOW Accounts
    
    
    432,408
    
    
    
    3,666
    
    
    
    3.40
    %
    
    
    484,039
    
    
    
    3,638
    
    
    
    3.01
    %Time Deposits of $100,000 or More
    
    
    1,411,099
    
    
    
    18,778
    
    
    
    5.34
    %
    
    
    1,223,118
    
    
    
    14,869
    
    
    
    4.88
    %Other Time Deposits
    
    
    303,957
    
    
    
    3,745
    
    
    
    4.94
    %
    
    
    273,503
    
    
    
    2,934
    
    
    
    4.30
    %FHLB Advances and Other Borrowings
    
    
    222,338
    
    
    
    2,919
    
    
    
    5.27
    %
    
    
    166,074
    
    
    
    2,001
    
    
    
    4.83
    %Junior Subordinated Debentures
    
    
    82,406
    
    
    
    1,660
    
    
    
    8.08
    %
    
    
    82,406
    
    
    
    1,587
    
    
    
    7.72
    %Total Interest-Bearing Liabilities
    
    
    2,551,665
    
    
    
    31,270
    
    
    
    4.92
    %
    
    
    2,341,481
    
    
    
    25,509
    
    
    
    4.37
    %Noninterest-Bearing Liabilities:Demand Deposits
    
    
    720,827
    
    
    
    
    
    
    
    
    
    
    
    739,217Other Liabilities
    
    
    49,959
    
    
    
    
    
    
    
    
    
    
    
    40,027Total Noninterest-Bearing Liabilities
    
    
    770,786
    
    
    
    
    
    
    
    
    
    
    
    779,244Total Liabilities
    
    
    3,322,451
    
    
    
    
    
    
    
    
    
    
    
    3,120,725Shareholders Equity
    
    
    495,719
    
    
    
    
    
    
    
    
    
    
    
    449,664Total Liabilities and Shareholders Equity
    
    $
    3,818,170
    
    
    
    
    
    
    
    
    
    
    $
    3,570,389Net Interest Income
    
    
    
    
    
    $
    38,590
    
    
    
    
    
    
    
    
    
    
    $
    38,397Net Interest Spread(3)
    
    
    
    
    
    
    
    
    
    
    3.25
    %
    
    
    
    
    
    
    
    
    
    
    3.69
    %Net Interest Margin(4)
    
    
    
    
    
    
    
    
    
    
    4.51
    %
    
    
    
    
    
    
    
    
    
    
    4.84
    %
 
 (1)
    
    Loans are net of deferred fees and related direct costs, but excluding the allowance
for loan losses. Non-accrual loans are included in the average loan balance. Loan fees have
been included in the calculation of interest income. Loan fees were $870,000 and $1.2 million
for the three months ended June 30, 2007 and 2006, respectively.(2)
    
    If computed on a tax-equivalent basis using an effective marginal rate of 35
percent, tax-exempt income would be $1.2 million and $1.2 million, and the yields would be
6.49 percent and 6.51 percent, for the three months ended June 30, 2007 and 2006,
respectively.(3)
    
    Represents the average rate earned on interest-earning assets less the average rate
paid on interest-bearing liabilities.(4)
    
    Represents annualized net interest income as a percentage of average
interest-earning assets. 18




---



##### Table of Contents



Three Months EndedJune 30, 2007 vs. 2006Increase (Decrease) Due to Change inVolume
    
    
    Rate
    
    
    Total(In Thousands)Interest Income:Gross Loans, Net
    
    $
    6,179
    
    
    $
    163
    
    
    $
    6,342Municipal Securities
    
    
    (8
    )
    
    
    (3
    )
    
    
    (11
    )Obligations of Other U.S. Government Agencies
    
    
    (88
    )
    
    
    5
    
    
    
    (83
    )Other Debt Securities
    
    
    (470
    )
    
    
    17
    
    
    
    (453
    )Equity Securities
    
    
    10
    
    
    
    (4
    )
    
    
    6Federal Funds Sold
    
    
    151
    
    
    
    2
    
    
    
    153Total Interest Income
    
    
    5,774
    
    
    
    180
    
    
    
    5,954Interest Expense:Savings
    
    
    (59
    )
    
    
    81
    
    
    
    22Money Market Checking and NOW Accounts
    
    
    (411
    )
    
    
    439
    
    
    
    28Time Deposits of $100,000 or More
    
    
    2,418
    
    
    
    1,491
    
    
    
    3,909Other Time Deposits
    
    
    348
    
    
    
    463
    
    
    
    811FHLB Advances and Other Borrowings
    
    
    726
    
    
    
    192
    
    
    
    918Junior Subordinated Debentures
    
    
    
    
    
    
    73
    
    
    
    73Total Interest Expense
    
    
    3,022
    
    
    
    2,739
    
    
    
    5,761Change in Net Interest Income
    
    $
    2,752
    
    
    $
    (2,559
    )
    
    $
    193
    19




---



##### Table of Contents



Six Months Ended June 30, 2007 vs. 2006
  Six Months EndedJune 30, 2007
    
    
    June 30, 2006Interest
    
    
    Average
    
    
    
    
    
    
    Interest
    
    
    AverageAverage
    
    
    Income/
    
    
    Yield/
    
    
    Average
    
    
    Income/
    
    
    Yield/Balance
    
    
    Expense
    
    
    Rate
    
    
    Balance
    
    
    Expense
    
    
    Rate(Dollars in Thousands)ASSETSInterest-Earning Assets:Gross Loans, Net (1)
    
    $
    2,949,129
    
    
    $
    127,773
    
    
    
    8.74
    %
    
    $
    2,638,822
    
    
    $
    112,017
    
    
    
    8.56
    %Municipal Securities (2)
    
    
    72,340
    
    
    
    1,526
    
    
    
    4.22
    %
    
    
    73,414
    
    
    
    1,551
    
    
    
    4.23
    %Obligations of Other U.S. Government Agencies
    
    
    118,483
    
    
    
    2,489
    
    
    
    4.20
    %
    
    
    126,843
    
    
    
    2,619
    
    
    
    4.13
    %Other Debt Securities
    
    
    190,290
    
    
    
    4,416
    
    
    
    4.64
    %
    
    
    231,183
    
    
    
    5,286
    
    
    
    4.57
    %Equity Securities
    
    
    25,149
    
    
    
    705
    
    
    
    5.61
    %
    
    
    24,567
    
    
    
    655
    
    
    
    5.33
    %Federal Funds Sold
    
    
    34,317
    
    
    
    902
    
    
    
    5.26
    %
    
    
    14,158
    
    
    
    312
    
    
    
    4.41
    %Term Federal Funds Sold
    
    
    193
    
    
    
    5
    
    
    
    5.18
    %
    
    
    
    
    
    
    
    
    
    
    Interest-Earning Deposits
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    64
    
    
    
    1
    
    
    
    4.01
    %Total Interest-Earning Assets
    
    
    3,389,901
    
    
    
    137,816
    
    
    
    8.20
    %
    
    
    3,109,051
    
    
    
    122,441
    
    
    
    7.94
    %Noninterest-Earning Assets:Cash and Cash Equivalents
    
    
    91,221
    
    
    
    
    
    
    
    
    
    
    
    94,690Allowance for Loan Losses
    
    
    (29,076
    )
    
    
    
    
    
    
    
    
    
    
    (25,825
    )Other Assets
    
    
    328,101
    
    
    
    
    
    
    
    
    
    
    
    319,394Total Noninterest-Earning Assets
    
    
    390,246
    
    
    
    
    
    
    
    
    
    
    
    388,259Total Assets
    
    $
    3,780,147
    
    
    
    
    
    
    
    
    
    
    $
    3,497,310LIABILITIES AND SHAREHOLDERS EQUITYInterest-Bearing Liabilities:Deposits:Savings
    
    $
    100,114
    
    
    
    963
    
    
    
    1.94
    %
    
    $
    115,036
    
    
    
    962
    
    
    
    1.69
    %Money Market Checking and NOW Accounts
    
    
    430,152
    
    
    
    7,138
    
    
    
    3.35
    %
    
    
    501,735
    
    
    
    7,352
    
    
    
    2.95
    %Time Deposits of $100,000 or More
    
    
    1,408,718
    
    
    
    37,276
    
    
    
    5.34
    %
    
    
    1,195,348
    
    
    
    27,653
    
    
    
    4.67
    %Other Time Deposits
    
    
    302,425
    
    
    
    7,395
    
    
    
    4.93
    %
    
    
    273,134
    
    
    
    5,545
    
    
    
    4.09
    %FHLB Advances and Other Borrowings
    
    
    195,910
    
    
    
    5,090
    
    
    
    5.24
    %
    
    
    111,285
    
    
    
    2,615
    
    
    
    4.74
    %Junior Subordinated Debentures
    
    
    82,406
    
    
    
    3,299
    
    
    
    8.07
    %
    
    
    82,406
    
    
    
    3,062
    
    
    
    7.49
    %Total Interest-Bearing Liabilities
    
    
    2,519,725
    
    
    
    61,161
    
    
    
    4.89
    %
    
    
    2,278,944
    
    
    
    47,189
    
    
    
    4.18
    %Noninterest-Bearing Liabilities:Demand Deposits
    
    
    715,220
    
    
    
    
    
    
    
    
    
    
    
    736,395Other Liabilities
    
    
    47,758
    
    
    
    
    
    
    
    
    
    
    
    38,464Total Noninterest-Bearing Liabilities
    
    
    762,978
    
    
    
    
    
    
    
    
    
    
    
    774,859Total Liabilities
    
    
    3,282,703
    
    
    
    
    
    
    
    
    
    
    
    3,053,803Shareholders Equity
    
    
    497,444
    
    
    
    
    
    
    
    
    
    
    
    443,507Total Liabilities and Shareholders Equity
    
    $
    3,780,147
    
    
    
    
    
    
    
    
    
    
    $
    3,497,310Net Interest Income
    
    
    
    
    
    $
    76,655
    
    
    
    
    
    
    
    
    
    
    $
    75,252Net Interest Spread(3)
    
    
    
    
    
    
    
    
    
    
    3.31
    %
    
    
    
    
    
    
    
    
    
    
    3.76
    %Net Interest Margin(4)
    
    
    
    
    
    
    
    
    
    
    4.56
    %
    
    
    
    
    
    
    
    
    
    
    4.88
    %
 
 (1)
    
    Loans are net of deferred fees and related direct costs, but excluding the allowance
for loan losses. Non-accrual loans are included in the average loan balance. Loan fees have
been included in the calculation of interest income. Loan fees were $1.8 million and $2.5
million for the six months ended June 30, 2007 and 2006, respectively.(2)
    
    If computed on a tax-equivalent basis using an effective marginal rate of 35
percent, tax-exempt income would be $2.3 million and $2.4 million, and the yields would be
6.49 percent and 6.50 percent, for the six months ended June 30, 2007 and 2006, respectively.(3)
    
    Represents the average rate earned on interest-earning assets less the average rate
paid on interest-bearing liabilities.(4)
    
    Represents annualized net interest income as a percentage of average
interest-earning assets. 20




---



##### Table of Contents



Six Months EndedJune 30, 2007 vs. 2006Increase (Decrease) Due to Change inVolume
    
    
    Rate
    
    
    Total(In Thousands)Interest Income:Gross Loans, Net
    
    $
    13,403
    
    
    $
    2,353
    
    
    $
    15,756Municipal Securities
    
    
    (23
    )
    
    
    (2
    )
    
    
    (25
    )Obligations of Other U.S. Government Agencies
    
    
    (173
    )
    
    
    43
    
    
    
    (130
    )Other Debt Securities
    
    
    (933
    )
    
    
    63
    
    
    
    (870
    )Equity Securities
    
    
    15
    
    
    
    35
    
    
    
    50Federal Funds Sold
    
    
    512
    
    
    
    78
    
    
    
    590Term Federal Funds Sold
    
    
    5
    
    
    
    
    
    
    
    5Interest-Earning Deposits
    
    
    
    
    
    
    (1
    )
    
    
    (1
    )Total Interest Income
    
    
    12,806
    
    
    
    2,569
    
    
    
    15,375Interest Expense:Savings
    
    
    (134
    )
    
    
    135
    
    
    
    1Money Market Checking and NOW Accounts
    
    
    (1,121
    )
    
    
    907
    
    
    
    (214
    )Time Deposits of $100,000 or More
    
    
    5,329
    
    
    
    4,294
    
    
    
    9,623Other Time Deposits
    
    
    637
    
    
    
    1,213
    
    
    
    1,850FHLB Advances and Other Borrowings
    
    
    2,173
    
    
    
    302
    
    
    
    2,475Junior Subordinated Debentures
    
    
    
    
    
    
    237
    
    
    
    237Total Interest Expense
    
    
    6,884
    
    
    
    7,088
    
    
    
    13,972Change in Net Interest Income
    
    $
    5,922
    
    
    $
    (4,519
    )
    
    $
    1,403
    21




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##### Table of Contents



Provision for Credit Losses
   Non-Interest Income
  Three Months Ended June 30, 2007 vs. 2006
  Three Months EndedJune 30,
    
    
    Increase (Decrease)2007
    
    
    2006
    
    
    Amount
    
    
    Percentage(Dollars in Thousands)Service Charges on Deposit Accounts
    
    $
    4,438
    
    
    $
    4,183
    
    
    $
    255
    
    
    
    6.1
    %Insurance Commissions
    
    
    1,279
    
    
    
    243
    
    
    
    1,036
    
    
    
    426.3
    %Trade Finance Fees
    
    
    1,177
    
    
    
    1,116
    
    
    
    61
    
    
    
    5.5
    %Remittance Fees
    
    
    520
    
    
    
    532
    
    
    
    (12
    )
    
    
    (2.3
    %)Other Service Charges and Fees
    
    
    574
    
    
    
    614
    
    
    
    (40
    )
    
    
    (6.5
    %)Bank-Owned Life Insurance Income
    
    
    229
    
    
    
    215
    
    
    
    14
    
    
    
    6.5
    %Increase in Fair Value of Derivatives
    
    
    222
    
    
    
    109
    
    
    
    113
    
    
    
    103.7
    %Other Income
    
    
    491
    
    
    
    345
    
    
    
    146
    
    
    
    42.3
    %Gain on Sales of Loans
    
    
    1,762
    
    
    
    1,311
    
    
    
    451
    
    
    
    34.4
    %Total Non-Interest Income
    
    $
    10,692
    
    
    $
    8,668
    
    
    $
    2,024
    
    
    
    23.4
    %
     22




---



##### Table of Contents



Six Months Ended June 30, 2007 vs. 2006
  Six Months EndedJune 30,
    
    
    Increase (Decrease)2007
    
    
    2006
    
    
    Amount
    
    
    Percentage(Dollars in Thousands)Service Charges on Deposit Accounts
    
    $
    8,926
    
    
    $
    8,414
    
    
    $
    512
    
    
    
    6.1
    %Insurance Commissions
    
    
    2,404
    
    
    
    396
    
    
    
    2,008
    
    
    
    507.1
    %Trade Finance Fees
    
    
    2,467
    
    
    
    2,187
    
    
    
    280
    
    
    
    12.8
    %Remittance Fees
    
    
    991
    
    
    
    1,020
    
    
    
    (29
    )
    
    
    (2.8
    %)Other Service Charges and Fees
    
    
    1,190
    
    
    
    1,148
    
    
    
    42
    
    
    
    3.7
    %Bank-Owned Life Insurance Income
    
    
    459
    
    
    
    433
    
    
    
    26
    
    
    
    6.0
    %Increase in Fair Value of Derivatives
    
    
    314
    
    
    
    334
    
    
    
    (20
    )
    
    
    (6.0
    %)Other Income
    
    
    766
    
    
    
    626
    
    
    
    140
    
    
    
    22.4
    %Gain on Sales of Loans
    
    
    3,162
    
    
    
    2,150
    
    
    
    1,012
    
    
    
    47.1
    %Gain on Sales of Securities Available for Sale
    
    
    
    
    
    
    5
    
    
    
    (5
    )
    
    
    (100.0
    %)Total Non-Interest Income
    
    $
    20,679
    
    
    $
    16,713
    
    
    $
    3,966
    
    
    
    23.7
    %
      23




---



##### Table of Contents



Non-Interest Expenses
 Three Months Ended June 30, 2007 vs. 2006
  Three Months EndedJune 30,
    
    
    Increase (Decrease)2007
    
    
    2006
    
    
    Amount
    
    
    Percentage(Dollars in Thousands)Salaries and Employee Benefits
    
    $
    10,782
    
    
    $
    10,691
    
    
    $
    91
    
    
    
    0.9
    %Occupancy and Equipment
    
    
    2,571
    
    
    
    2,434
    
    
    
    137
    
    
    
    5.6
    %Data Processing
    
    
    1,665
    
    
    
    1,454
    
    
    
    211
    
    
    
    14.5
    %Advertising and Promotion
    
    
    889
    
    
    
    811
    
    
    
    78
    
    
    
    9.6
    %Supplies and Communications
    
    
    704
    
    
    
    576
    
    
    
    128
    
    
    
    22.2
    %Professional Fees
    
    
    647
    
    
    
    492
    
    
    
    155
    
    
    
    31.5
    %Amortization of Other Intangible Assets
    
    
    592
    
    
    
    605
    
    
    
    (13
    )
    
    
    (2.1
    %)Decrease in Fair Value of Embedded Options
    
    
    196
    
    
    
    112
    
    
    
    84
    
    
    
    75.0
    %Other Operating Expenses
    
    
    3,444
    
    
    
    2,622
    
    
    
    822
    
    
    
    31.4
    %Total Non-Interest Expenses
    
    $
    21,490
    
    
    $
    19,797
    
    
    $
    1,693
    
    
    
    8.6
    %
    Six Months Ended June 30, 2007 vs. 2006
  Six Months EndedJune 30,
    
    
    Increase (Decrease)2007
    
    
    2006
    
    
    Amount
    
    
    Percentage(Dollars in Thousands)Salaries and Employee Benefits
    
    $
    22,543
    
    
    $
    19,852
    
    
    $
    2,691
    
    
    
    13.6
    %Occupancy and Equipment
    
    
    5,083
    
    
    
    4,640
    
    
    
    443
    
    
    
    9.5
    %Data Processing
    
    
    3,228
    
    
    
    2,883
    
    
    
    345
    
    
    
    12.0
    %Advertising and Promotion
    
    
    1,550
    
    
    
    1,457
    
    
    
    93
    
    
    
    6.4
    %Supplies and Communications
    
    
    1,292
    
    
    
    1,212
    
    
    
    80
    
    
    
    6.6
    %Professional Fees
    
    
    1,121
    
    
    
    1,160
    
    
    
    (39
    )
    
    
    (3.4
    %)Amortization of Other Intangible Assets
    
    
    1,206
    
    
    
    1,230
    
    
    
    (24
    )
    
    
    (2.0
    %)Decrease in Fair Value of Embedded Options
    
    
    196
    
    
    
    214
    
    
    
    (18
    )
    
    
    (8.4
    %)Other Operating Expenses
    
    
    6,240
    
    
    
    4,889
    
    
    
    1,351
    
    
    
    27.6
    %Total Non-Interest Expenses
    
    $
    42,459
    
    
    $
    37,537
    
    
    $
    4,922
    
    
    
    13.1
    %
 24




---



##### Table of Contents



Provision for Income Taxes
  FINANCIAL CONDITION
 Summary of Changes in Balance Sheets  June 30, 2007 Compared to December 31, 2006
  Investment Portfolio
 Accounting for Certain Investments in Debt and Equity Securities.
 25




---



##### Table of Contents



June 30, 2007
    
    
    December 31, 2006Unrealized
    
    
    
    
    
    
    
    
    
    
    UnrealizedAmortized
    
    
    Fair
    
    
    Gain
    
    
    Amortized
    
    
    Fair
    
    
    GainCost
    
    
    Value
    
    
    (Loss)
    
    
    Cost
    
    
    Value
    
    
    (Loss)(In Thousands)Held to Maturity:Municipal Bonds
    
    $
    693
    
    
    $
    693
    
    
    $
    
    
    
    $
    693
    
    
    $
    693
    
    
    $
    Mortgage-Backed Securities
    
    
    261
    
    
    
    262
    
    
    
    1
    
    
    
    274
    
    
    
    276
    
    
    
    2Total Held to Maturity
    
    $
    954
    
    
    $
    955
    
    
    $
    1
    
    
    $
    967
    
    
    $
    969
    
    
    $
    2Available for Sale:U.S. Government Agency Securities
    
    $
    119,842
    
    
    $
    118,658
    
    
    $
    (1,184
    )
    
    $
    119,768
    
    
    $
    118,244
    
    
    $
    (1,524
    )Mortgage-Backed Securities
    
    
    107,890
    
    
    
    104,788
    
    
    
    (3,102
    )
    
    
    123,614
    
    
    
    121,608
    
    
    
    (2,006
    )Municipal Bonds
    
    
    69,932
    
    
    
    70,284
    
    
    
    352
    
    
    
    69,966
    
    
    
    71,710
    
    
    
    1,744Collateralized Mortgage Obligations
    
    
    58,980
    
    
    
    57,399
    
    
    
    (1,581
    )
    
    
    67,605
    
    
    
    66,113
    
    
    
    (1,492
    )Corporate Bonds
    
    
    8,019
    
    
    
    7,828
    
    
    
    (191
    )
    
    
    8,090
    
    
    
    7,887
    
    
    
    (203
    )Other Securities
    
    
    4,999
    
    
    
    4,821
    
    
    
    (178
    )
    
    
    4,999
    
    
    
    5,050
    
    
    
    51Total Available for Sale
    
    $
    369,662
    
    
    $
    363,778
    
    
    $
    (5,884
    )
    
    $
    394,042
    
    
    $
    390,612
    
    
    $
    (3,430
    )
  Available for Sale
    
    
    Held to MaturityAmortized
    
    
    Fair
    
    
    Amortized
    
    
    FairCost
    
    
    Value
    
    
    Cost
    
    
    Value(In Thousands)Within One Year
    
    $
    64,939
    
    
    $
    64,434
    
    
    $
    
    
    
    $
    Over One Year Through Five Years
    
    
    70,333
    
    
    
    69,252
    
    
    
    
    
    
    
    Over Five Years Through Ten Years
    
    
    8,326
    
    
    
    8,350
    
    
    
    693
    
    
    
    693Over Ten Years
    
    
    59,194
    
    
    
    59,555
    
    
    
    
    
    
    
    202,792
    
    
    
    201,591
    
    
    
    693
    
    
    
    693Mortgage-Backed Securities
    
    
    107,890
    
    
    
    104,788
    
    
    
    261
    
    
    
    262Collateralized Mortgage Obligations
    
    
    58,980
    
    
    
    57,399
    
    
    
    
    
    
    
    166,870
    
    
    
    162,187
    
    
    
    261
    
    
    
    262$
    369,662
    
    
    $
    363,778
    
    
    $
    954
    
    
    $
    955
  Loan Portfolio
  26




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##### Table of Contents



June 30,
    
    
    December 31,
    
    
    Increase (Decrease)2007
    
    
    2006
    
    
    Amount
    
    
    Percentage(Dollars in Thousands)Real Estate Loans:Commercial Property
    
    $
    759,540
    
    
    $
    757,428
    
    
    $
    2,112
    
    
    
    0.3
    %Construction
    
    
    215,775
    
    
    
    202,207
    
    
    
    13,568
    
    
    
    6.7
    %Residential Property (1)
    
    
    87,145
    
    
    
    81,758
    
    
    
    5,387
    
    
    
    6.6
    %Total Real Estate Loans
    
    
    1,062,460
    
    
    
    1,041,393
    
    
    
    21,067
    
    
    
    2.0
    %Commercial and Industrial Loans:Commercial Term Loans
    
    
    1,371,618
    
    
    
    1,202,612
    
    
    
    169,006
    
    
    
    14.1
    %Commercial Lines of Credit
    
    
    246,069
    
    
    
    225,630
    
    
    
    20,439
    
    
    
    9.1
    %SBA Loans (2)
    
    
    147,154
    
    
    
    171,631
    
    
    
    (24,477
    )
    
    
    (14.3
    %)International Loans
    
    
    133,256
    
    
    
    126,561
    
    
    
    6,695
    
    
    
    5.3
    %Total Commercial and Industrial Loans
    
    
    1,898,097
    
    
    
    1,726,434
    
    
    
    171,663
    
    
    
    9.9
    %Consumer Loans
    
    
    97,496
    
    
    
    100,121
    
    
    
    (2,625
    )
    
    
    (2.6
    %)Total Loans Gross
    
    
    3,058,053
    
    
    
    2,867,948
    
    
    
    190,105
    
    
    
    6.6
    %Deferred Loan Fees
    
    
    (2,132
    )
    
    
    (3,001
    )
    
    
    869
    
    
    
    (29.0
    %)Allowance for Loan Losses
    
    
    (32,190
    )
    
    
    (27,557
    )
    
    
    (4,633
    )
    
    
    16.8
    %Net Loans Receivable
    
    $
    3,023,731
    
    
    $
    2,837,390
    
    
    $
    186,341
    
    
    
    6.6
    %
 
 (1)
    
    Includes mortgage loans held for sale, at the lower of cost or market, of $630,000
at December 31, 2006.(2)
    
    Includes SBA loans held for sale, at the lower of cost or market, of $10.2 million
and $23.2 million at June 30, 2007 and December 31, 2006, respectively.   Non-Performing Assets
   27




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##### Table of Contents



June 30,
    
    
    December 31,
    
    
    Increase (Decrease)2007
    
    
    2006
    
    
    Amount
    
    
    Percentage(Dollars in Thousands)Non-Accrual Loans
    
    $
    22,442
    
    
    $
    14,213
    
    
    $
    8,229
    
    
    
    57.9
    %Loans 90 Days or More Past Due and Still Accruing
    
    
    179
    
    
    
    2
    
    
    
    177
    
    
    
    8,850.0
    %Total Non-Performing Loans
    
    
    22,621
    
    
    
    14,215
    
    
    
    8,406
    
    
    
    59.1
    %Other Real Estate Owned
    
    
    1,080
    
    
    
    
    
    
    
    1,080
    
    
    
    Total Non-Performing Assets
    
    $
    23,701
    
    
    $
    14,215
    
    
    $
    9,486
    
    
    
    66.7
    %Troubled Debt Restructurings
    
    $
    3,044
    
    
    $
    3,310
    
    
    $
    (266
    )
    
    
    (8.0
    %)
  Allowance for Loan Losses and Allowance for Off-Balance Sheet Items
     28




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##### Table of Contents



As of and for the Three Months EndedJune 30,
    
    
    March 31,
    
    
    June 30,2007
    
    
    2007
    
    
    2006(Dollars in Thousands)Allowance for Loan Losses:Balance at Beginning of Period
    
    $
    31,527
    
    
    $
    27,557
    
    
    $
    26,703Actual Charge-Offs
    
    
    (2,662
    )
    
    
    (2,619
    )
    
    
    (1,053
    )Recoveries on Loans Previously Charged Off
    
    
    144
    
    
    
    215
    
    
    
    700Net Loan Charge-Offs
    
    
    (2,518
    )
    
    
    (2,404
    )
    
    
    (353
    )Provision Charged to Operating Expenses
    
    
    3,181
    
    
    
    6,374
    
    
    
    900Balance at End of Period
    
    $
    32,190
    
    
    $
    31,527
    
    
    $
    27,250Allowance for Off-Balance Sheet Items:Balance at Beginning of Period
    
    $
    1,888
    
    
    $
    2,130
    
    
    $
    2,130Provision Charged to Operating Expenses
    
    
    (158
    )
    
    
    (242
    )
    
    
    Balance at End of Period
    
    $
    1,730
    
    
    $
    1,888
    
    
    $
    2,130Ratios:Net Loan Charge-Offs to Average Total Gross Loans (1)
    
    
    0.33
    %
    
    
    0.34
    %
    
    
    0.05
    %Net Loan Charge-Offs to Total Gross Loans at End of Period (1)
    
    
    0.33
    %
    
    
    0.33
    %
    
    
    0.05
    %Allowance for Loan Losses to Average Total Gross Loans
    
    
    1.07
    %
    
    
    1.09
    %
    
    
    1.00
    %Allowance for Loan Losses to Total Gross Loans at End of Period
    
    
    1.05
    %
    
    
    1.08
    %
    
    
    0.98
    %Net Loan Charge-Offs to Allowance for Loan Losses (1)
    
    
    31.38
    %
    
    
    30.92
    %
    
    
    5.20
    %Net Loan Charge-Offs to Provision Charged to Operating Expenses
    
    
    79.16
    %
    
    
    37.72
    %
    
    
    39.22
    %Allowance for Loan Losses to Non-Performing Loans
    
    
    142.30
    %
    
    
    161.55
    %
    
    
    224.54
    %Balances:Average Total Gross Loans Outstanding During Period
    
    $
    3,017,012
    
    
    $
    2,885,229
    
    
    $
    2,733,112Total Gross Loans Outstanding at End of Period
    
    $
    3,058,053
    
    
    $
    2,919,600
    
    
    $
    2,791,885Non-Performing Loans at End of Period
    
    $
    22,621
    
    
    $
    19,515
    
    
    $
    12,136
 
 (1)
    
    Net loan charge-offs are annualized to calculate the ratios. As of and for the Six Months EndedJune 30,
    
    
    June 30,2007
    
    
    2006(Dollars in Thousands)Allowance for Loan Losses:Balance at Beginning of Period
    
    $
    27,557
    
    
    $
    24,963Actual Charge-Offs
    
    
    (5,281
    )
    
    
    (2,380
    )Recoveries on Loans Previously Charged Off
    
    
    359
    
    
    
    807Net Loan Charge-Offs
    
    
    (4,922
    )
    
    
    (1,573
    )Provision Charged to Operating Expenses
    
    
    9,555
    
    
    
    3,860Balance at End of Period
    
    $
    32,190
    
    
    $
    27,250Allowance for Off-Balance Sheet Items:Balance at Beginning of Period
    
    $
    2,130
    
    
    $
    2,130Provision Charged to Operating Expenses
    
    
    (400
    )
    
    
    Balance at End of Period
    
    $
    1,730
    
    
    $
    2,130Ratios:Net Loan
Charge-Offs to Average Total Gross Loans (1)
    
    
    0.34
    %
    
    
    0.12
    %Net Loan
Charge-Offs to Total Gross Loans at End of Period (1)
    
    
    0.32
    %
    
    
    0.11
    %Allowance for Loan Losses to Average Total Gross Loans
    
    
    1.09
    %
    
    
    1.03
    %Allowance for Loan Losses to Total Gross Loans at End of Period
    
    
    1.05
    %
    
    
    0.98
    %Net Loan
Charge-Offs to Allowance for Loan Losses (1)
    
    
    30.83
    %
    
    
    11.64
    %Net Loan Charge-Offs to Provision Charged to Operating Expenses
    
    
    51.51
    %
    
    
    40.75
    %Allowance for Loan Losses to Non-Performing Loans
    
    
    142.30
    %
    
    
    224.54
    %Balances:Average Total Gross Loans Outstanding During Period
    
    $
    2,951,485
    
    
    $
    2,642,673Total Gross Loans Outstanding at End of Period
    
    $
    3,058,053
    
    
    $
    2,791,885Non-Performing Loans at End of Period
    
    $
    22,621
    
    
    $
    12,136
 
 (1)
    
    Net loan charge-offs are annualized to calculate the ratios. 29




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##### Table of Contents




    
    reviewing the adversely graded, delinquent or otherwise questionable loans;
    
    generating an estimate of the loss potential in each such loan;
    
    adjusting a qualitative factor for industry, economic or other external factors; and
    
    evaluating the present status of each loan.
  Deposits
  June 30,
    
    
    December 31,
    
    
    Increase (Decrease)2007
    
    
    2006
    
    
    Amount
    
    
    Percentage(Dollars in Thousands)Deposits:Demand  Noninterest-Bearing
    
    $
    720,214
    
    
    $
    728,348
    
    
    $
    (8,134
    )
    
    
    (1.1
    %)Interest-Bearing:Savings
    
    
    97,019
    
    
    
    99,254
    
    
    
    (2,235
    )
    
    
    (2.3
    %)Money Market Checking and NOW Accounts
    
    
    438,973
    
    
    
    438,267
    
    
    
    706
    
    
    
    0.2
    %Time Deposits of $100,000 or More
    
    
    1,408,237
    
    
    
    1,383,358
    
    
    
    24,879
    
    
    
    1.8
    %Other Time Deposits
    
    
    308,703
    
    
    
    295,488
    
    
    
    13,215
    
    
    
    4.5
    %Total Deposits
    
    $
    2,973,146
    
    
    $
    2,944,715
    
    
    $
    28,431
    
    
    
    1.0
    %
  30




---



##### Table of Contents



FHLB Advances and Other Borrowings
    INTEREST RATE RISK MANAGEMENT
  31




---



##### Table of Contents



After Three
    
    
    After OneWithin
    
    
    Months
    
    
    Year But
    
    
    
    
    
    
    Non-Three
    
    
    But Within
    
    
    Within Five
    
    
    After Five
    
    
    Interest-Months
    
    
    One Year
    
    
    Years
    
    
    Years
    
    
    Sensitive
    
    
    Total(Dollars in Thousands)ASSETSCash and Due From Banks
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    98,020
    
    
    $
    98,020Federal Funds Sold
    
    
    23,800
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    23,800Securities:Fixed Rate
    
    
    15,866
    
    
    
    62,861
    
    
    
    144,209
    
    
    
    105,279
    
    
    
    
    
    
    
    328,215Floating Rate
    
    
    10,453
    
    
    
    1,359
    
    
    
    19,884
    
    
    
    4,821
    
    
    
    
    
    
    
    36,517Loans:Fixed Rate
    
    
    50,343
    
    
    
    64,127
    
    
    
    473,779
    
    
    
    437,768
    
    
    
    
    
    
    
    1,026,017Floating Rate
    
    
    1,794,404
    
    
    
    54,357
    
    
    
    157,201
    
    
    
    3,632
    
    
    
    
    
    
    
    2,009,594Non-Accrual
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    22,442
    
    
    
    22,442Deferred Loan Fees and Allowance
for Loan Losses
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (34,322
    )
    
    
    (34,322
    )FRB and FHLB Stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    25,352
    
    
    
    
    
    
    
    25,352Other Assets
    
    
    
    
    
    
    23,997
    
    
    
    
    
    
    
    6,457
    
    
    
    304,808
    
    
    
    335,262Total Assets
    
    $
    1,894,866
    
    
    $
    206,701
    
    
    $
    795,073
    
    
    $
    583,309
    
    
    $
    390,948
    
    
    $
    3,870,897LIABILITIES AND SHAREHOLDERS EQUITYLiabilities:Deposits:Demand Deposits
    
    $
    43,985
    
    
    $
    145,426
    
    
    $
    349,021
    
    
    $
    181,782
    
    
    $
    
    
    
    $
    720,214Savings
    
    
    10,956
    
    
    
    33,994
    
    
    
    42,187
    
    
    
    9,882
    
    
    
    
    
    
    
    97,019Money Market Checking and
NOW Accounts
    
    
    65,547
    
    
    
    125,595
    
    
    
    142,347
    
    
    
    105,484
    
    
    
    
    
    
    
    438,973Time Deposits:Fixed Rate
    
    
    986,078
    
    
    
    720,995
    
    
    
    9,698
    
    
    
    115
    
    
    
    
    
    
    
    1,716,886Floating Rate
    
    
    54
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    54FHLB Advances and Other Borrowings
    
    
    140,895
    
    
    
    30,000
    
    
    
    103,169
    
    
    
    4,720
    
    
    
    
    
    
    
    278,784Junior Subordinated Debentures
    
    
    82,406
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    82,406Other Liabilities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    50,527
    
    
    
    50,527Shareholders Equity
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    486,034
    
    
    
    486,034Total Liabilities and
Shareholders Equity
    
    $
    1,329,921
    
    
    $
    1,056,010
    
    
    $
    646,422
    
    
    $
    301,983
    
    
    $
    536,561
    
    
    $
    3,870,897Repricing Gap
    
    $
    564,945
    
    
    $
    (849,309
    )
    
    $
    148,651
    
    
    $
    281,326
    
    
    $
    (145,613
    )Cumulative Repricing Gap
    
    $
    564,945
    
    
    $
    (284,364
    )
    
    $
    (135,713
    )
    
    $
    145,613
    
    
    $
    Cumulative Repricing Gap as a
Percentage of Total Assets
    
    
    14.59
    %
    
    
    (7.35
    %)
    
    
    (3.51
    %)
    
    
    3.76
    %
    
    
    Cumulative Repricing Gap as a
Percentage of Interest-Earning Assets
    
    
    16.38
    %
    
    
    (8.24
    %)
    
    
    (3.93
    %)
    
    
    4.22
    %
    
    
    
   32




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##### Table of Contents



Less than Three Months
    
    Less Than Twelve MonthsJune 30,
    
    March 31,
    
    June 30,
    
    March 31,2007
    
    2007
    
    2007
    
    2007(Dollars in Thousands)Cumulative Repricing Gap
    
    $
    564,945
    
    
    $
    879,038
    
    
    $
    (284,364
    )
    
    $
    (140,904
    )Percentage of Total Assets
    
    
    14.59
    %
    
    
    23.27
    %
    
    
    (7.35
    %)
    
    
    (3.73
    %)Percentage of Interest-Earning Assets
    
    
    16.38
    %
    
    
    26.15
    %
    
    
    (8.24
    %)
    
    
    (4.19
    %)
   Rate Shock TablePercentage Changes
    
    Change in AmountChange in
    
    Net
    
    Economic
    
    Net
    
    EconomicInterest
    
    Interest
    
    Value of
    
    Interest
    
    Value ofRate
    
    Income
    
    Equity
    
    Income
    
    Equity(Dollars in Thousands)200%
    
    
    9.09
    %
    
    
    (13.86
    %)
    
    $
    14,938
    
    
    $
    (65,816
    )100%
    
    
    4.54
    %
    
    
    (7.23
    %)
    
    $
    7,453
    
    
    $
    (34,321
    )(100%)
    
    
    (4.54
    %)
    
    
    7.75
    %
    
    $
    (7,465
    )
    
    $
    36,783(200%)
    
    
    (9.14
    %)
    
    
    15.97
    %
    
    $
    (15,009
    )
    
    $
    75,863
  LIQUIDITY AND CAPITAL RESOURCES
  33




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##### Table of Contents



June 30,
    
    December 31,Liquidity Ratios
    
    2007
    
    2006Core Deposits/Total Assets
    
    
    29.09
    %
    
    
    30.10
    %Short-Term Non-Core Funding/Total Assets
    
    
    48.57
    %
    
    
    46.01
    %Net Loans/Total Assets
    
    
    78.32
    %
    
    
    76.60
    %Investments/Deposits
    
    
    14.10
    %
    
    
    15.93
    %Loans and Investments/Deposits
    
    
    115.67
    %
    
    
    112.52
    %Off-Balance Sheet Items/Total Assets
    
    
    16.67
    %
    
    
    19.04
    %
     34




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##### Table of Contents



Minimum
    
    
    Minimum to BeRegulatory
    
    
    Categorized asActual
    
    
    Requirement
    
    
    Well CapitalizedAmount
    
    
    Ratio
    
    
    Amount
    
    
    Ratio
    
    
    Amount
    
    
    Ratio(Dollars in Thousands)Total Capital (to Risk-Weighted Assets):Hanmi
Financial Corporation
    
    $
    384,525
    
    
    
    11.59
    %
    
    $
    265,478
    
    
    
    8.00
    %
    
    
    N/A
    
    
    
    N/AHanmi Bank
    
    $
    379,557
    
    
    
    11.45
    %
    
    $
    265,304
    
    
    
    8.00
    %
    
    $
    331,630
    
    
    
    10.00
    %Tier 1 Capital (to Risk-Weighted Assets):Hanmi Financial Corporation
    
    $
    350,606
    
    
    
    10.57
    %
    
    $
    132,739
    
    
    
    4.00
    %
    
    
    N/A
    
    
    
    N/AHanmi Bank
    
    $
    345,638
    
    
    
    10.42
    %
    
    $
    132,652
    
    
    
    4.00
    %
    
    $
    198,978
    
    
    
    6.00
    %Tier 1 Capital (to Average Total Assets):Hanmi Financial Corporation
    
    $
    350,606
    
    
    
    9.74
    %
    
    $
    144,009
    
    
    
    4.00
    %
    
    
    N/A
    
    
    
    N/AHanmi Bank
    
    $
    345,638
    
    
    
    9.61
    %
    
    $
    143,862
    
    
    
    4.00
    %
    
    $
    179,827
    
    
    
    5.00
    %
 Dividends
  OFF-BALANCE SHEET ARRANGEMENTS
 Note 7  Off-Balance Sheet
Commitments Item 1.
Business  Small Business Administration Guaranteed Loans Item 1. Business  Off-Balance
Sheet Commitments
 CONTRACTUAL OBLIGATIONS
  RECENTLY ISSUED ACCOUNTING STANDARDS
 SFAS No. 159 The Fair Value Option for
Financial Assets and Financial Liabilities
 SFAS No. 157 Fair Value Measurements
 35




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##### Table of Contents



SFAS No. 156 Accounting for Servicing of
Financial Assets
 SFAS No. 155 Accounting for Certain Hybrid
Financial Instruments, an amendment of FASB Statements No. 133 and SFAS No. 140
 
    
    permits fair value remeasurement for any hybrid financial instrument that contains an
embedded derivative that otherwise would require bifurcation;
    
    clarifies which interest-only strips and principal-only strips are not subject to SFAS
No. 133;
    
    establishes a requirement to evaluate interests in securitized financial assets to
identify interests that are freestanding derivatives or hybrid financial instruments that
contain an embedded derivative requiring bifurcation;
    
    clarifies that concentrations of credit risk in the form of subordinations are not
embedded derivatives; and
    
    amends SFAS No. 140 to eliminate the prohibition on a qualified special purpose entity
from holding a derivative financial instrument that pertains to a beneficial interest other
than another derivative financial instrument.
  
 ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
 Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
 Interest Rate Risk Management  Liquidity and Capital Resources.
 
 ITEM 4. CONTROLS AND PROCEDURES
    36




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##### Table of Contents



PART II  OTHER INFORMATION
 
 ITEM 1. LEGAL PROCEEDINGS
  
 ITEM 1A. RISK FACTORS
  
 ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
  ISSUER PURCHASES OF EQUITY SECURITIES(d) Maximum Number(a) Total
    
    
    
    
    
    (c) Total Number of
    
    (or Approximate DollarNumber of
    
    (b) Average
    
    Shares (or Units)
    
    Value) of Shares (orShares
    
    Price Paid
    
    Purchased as Part of
    
    Units) that May Yet Be(or Units)
    
    per Share
    
    Publicly Announced
    
    Purchased Under thePeriod
    
    Purchased
    
    (or Unit)
    
    Plans or Programs
    
    Plans or ProgramsRepurchases from
April 1, 2007 to
April 30, 2007
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    41,943,000Repurchases from
May 1, 2007 to
May 31, 2007
    
    
    751,200
    
    
    $
    17.12
    
    
    
    751,200
    
    
    $
    29,054,000Repurchases from
June 1, 2007 to
June 30, 2007
    
    
    172,600
    
    
    $
    17.28
    
    
    
    172,600
    
    
    $
    26,066,000Total
    
    
    923,800
    
    
    $
    17.15
    
    
    
    923,800
    
    
    $
    26,066,000
 
 ITEM 3. DEFAULTS UPON SENIOR SECURITIES
  
 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
  1.
    
    Election of Directors To elect three nominees to serve as directors of Hanmi
Financial, each for a term of three years until respective successors shall be elected and
qualified;2.
    
    2007 Equity Compensation Plan To approve the Hanmi Financial Corporation 2007 Equity
Compensation Plan; and3.
    
    Appointment of Independent Registered Public Accounting Firm To ratify the selection
of KPMG LLP as our independent registered public accounting firm for the year ending
December 31, 2007.
 37




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##### Table of Contents



Proposal 1  Election of Directors
  Votes
    
    VotesClass II Director Nominees
    
    For
    
    Withheld
    
    UnvotedKi Tae Hong
    
    
    42,611,391
    
    
    
    351,167
    
    
    
    5,862,979Sung Won Sohn, Ph.D.
    
    
    42,260,852
    
    
    
    701,706
    
    
    
    5,862,979Won R. Yoon, M.D.
    
    
    42,151,789
    
    
    
    810,769
    
    
    
    5,862,979
   
  
 Proposal 2  2007 Equity Compensation Plan
 Votes
    
    Votes
    
    Votes
    
    BrokerFor
    
    Against
    
    Withheld
    
    Non-Votes18,164,028
    
    
    11,358,717
    
    
    
    140,007
    
    
    
    13,299,806Proposal 3  Appointment of Independent Registered Public Accounting
FirmVotes
    
    Votes
    
    VotesFor
    
    Against
    
    Withheld42,799,932
    
    
    100,576
    
    
    
    62,050
 
 ITEM 5. OTHER INFORMATION
  
 ITEM 6. EXHIBITS
 ExhibitNumber
    
    Document10.1 *
    
    Hanmi Financial Corporation 2007
Equity Compensation Plan10.2
**
    
    Put Option Agreement between Hanmi Financial Corporation and William J. Ruh dated April 17, 200710.3
**
    
    Put Option Agreement between Hanmi Financial Corporation and John M. Eggemeyer dated April 17, 200731.1
    
    Certification of Chief Executive Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the
Securities Exchange Act, as amended31.2
    
    Certification of Chief Financial Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the
Securities Exchange Act, as amended32.1
    
    Certification of Chief Executive Officer Pursuant to 18 U.S.C. 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 200232.2
    
    Certification of Chief Financial Officer Pursuant to 18 U.S.C. 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002
 
 *
    
    Previously filed and incorporated by reference herein from
Hanmi Financials Current Report
on Form 8-K filed on June 26, 2007.**
    
    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 Securities and Exchange
Commission on May 10, 2007. 38




---



##### Table of Contents



SIGNATURES
  HANMI FINANCIAL CORPORATIONDate: August 9, 2007
    By:
    /s/ Sung Won Sohn, Ph.D.Sung Won Sohn, Ph.D.President and Chief Executive OfficerBy:
    /s/ Michael J. WiniarskiMichael J. WiniarskiSenior Vice President and Chief Financial Officer 39