Hanmi Financial (HAFC) came out with quarterly earnings of $0.50 per share, missing the Zacks Consensus Estimate of $0.52 per share. This compares to earnings of $0.72 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of -3.85%. A quarter ago, it was expected that this bank holding company would post earnings of $0.60 per share when it actually produced earnings of $0.61, delivering a surprise of 1.67%.Over the last four quarters, ...

LOS ANGELES, April 09, 2024 (GLOBE NEWSWIRE) -- Hanmi Financial Corporation (NASDAQ:HAFC) ("Hanmi"), the holding company for Hanmi Bank, today announced that it will report first quarter 2024 financial results at the market close on Tuesday, April 23, 2024. Management will host a conference call that same day, at 2:00 p.m. Pacific Time (5:00 p.m. Eastern Time) to discuss the results. Investment professionals and all current and prospective shareholders are invited to access the live call on April 23 by dial ...

LOS ANGELES, April 04, 2024 (GLOBE NEWSWIRE) -- Hanmi Financial Corporation (NASDAQ:HAFC, or "Hanmi"))), the parent company of Hanmi Bank (the "Bank"), today announced the release of its 2023 annual letter to shareholders entitled "Building on our Legacy of Trust" authored by President and Chief Executive Officer Bonnie Lee. To view the letter please visit Hanmi Financial Corporation (HAFC). About Hanmi Financial Corporation Headquartered in Los Angeles, California, Hanmi Financial Corporation owns Hanmi Ba ...

Los Angeles New York/ New Jersey Virginia Chicago Dallas Houston San Francisco San Diego Exhibit 99.1 Hanmi Financial Corporation 2024 Virtual Bank Conference March 2024 PIPER SANDLER Forward-Looking Statements Hanmi Financial Corporation (the "Company") cautions investors that any statements contained herein that are not historical facts are forward-looking statements within the meaning of the "safe harbo" provisions of the Private Securities Litigation Reform Act of 1995, including, but not limited to, th ...

[Cautionary Note Regarding Forward-Looking Statements](index=5&type=section&id=Cautionary%20Note%20Regarding%20Forward-Looking%20Statements) This section highlights that the report contains forward-looking statements regarding future operating and financial performance, business strategies, and regulatory outlook, cautioning that actual results may differ due to various known and unknown risks. - The report contains forward-looking statements about future operating and financial performance, financial position, liquidity, business strategies, regulatory and competitive outlook, investment plans, capital needs, and management objectives[17](index=17&type=chunk) - Key risk factors that may cause actual results to differ include failure to maintain adequate capital and liquidity, changes in liquidity (especially uninsured deposits), general economic conditions (including potential recession), market volatility, changes in consumer habits, interest rate fluctuations, and cybersecurity breaches[18](index=18&type=chunk) - The company does not undertake to update these forward-looking statements to reflect events or circumstances occurring after the report date, except as legally required[19](index=19&type=chunk) Part I [Item 1. Business](index=6&type=section&id=Item%201.%20Business) Hanmi Financial Corporation is a bank holding company for Hanmi Bank, a California state-chartered community bank primarily serving Korean-American and multi-ethnic communities across several states, with revenue mainly from interest and fees on loans, interest and dividends on securities, and service charges. - Hanmi Financial Corporation is a Delaware corporation and a bank holding company for Hanmi Bank, a California state-chartered bank[22](index=22&type=chunk)[23](index=23&type=chunk) - Hanmi Bank is a community bank serving Korean-American and other multi-ethnic communities across California, Colorado, Georgia, Illinois, New Jersey, New York, Texas, Virginia, and Washington[24](index=24&type=chunk) - The Bank's primary revenue sources are interest and fees on loans, interest and dividends on securities, service charges on deposit accounts, and sales of SBA loans[25](index=25&type=chunk) Revenue Summary (2021-2023) | Revenue Source | 2023 ($ thousands) | % | 2022 ($ thousands) | % | 2021 ($ thousands) | % | | :------------------------------ | :----------------- | :--- | :----------------- | :--- | :----------------- | :--- | | Interest and fees on loans | 339,811 | 84.3 | 257,878 | 83.8 | 208,602 | 81.1 | | Interest and dividends on securities | 18,167 | 4.5 | 13,375 | 4.3 | 7,171 | 2.8 | | Other interest income | 11,350 | 2.8 | 2,560 | 0.8 | 902 | 0.4 | | Service charges, fees & other | 30,349 | 7.5 | 24,722 | 8.0 | 23,729 | 9.2 | | Gain on sale of SBA loans | 5,701 | 1.4 | 9,478 | 3.1 | 17,266 | 6.7 | | Net gain (loss) on sale of securities | (1,871) | (0.5) | — | — | (499) | (0.2) | | **Total Revenues** | **403,507** | **100.0** | **308,013** | **100.0** | **257,171** | **100.0** | - The Bank's lending activities include real estate loans (commercial property, construction, residential), commercial and industrial loans (commercial term, lines of credit, international), equipment lease financing, and SBA loans[28](index=28&type=chunk) - As of December 31, 2023, the Company employed **615 individuals**, with **68% women** and **92% minorities** in the workforce, and **62% women** and **94% minorities** in managerial roles, reflecting a commitment to diversity, equity, and inclusion[58](index=58&type=chunk)[62](index=62&type=chunk) - The banking and financial services industry is highly competitive, with competition from other commercial banks, savings institutions, and non-bank financial service providers, many of whom have greater resources[68](index=68&type=chunk)[70](index=70&type=chunk) - The Company and Bank are subject to extensive federal and state regulation, primarily aimed at maintaining safety and soundness, which influences business activities, capital requirements, and reporting obligations[74](index=74&type=chunk) Capital Ratios (December 31, 2023) | Capital Ratio Category | Hanmi Financial (%) | Hanmi Bank (%) | | :--------------------------------- | :------------------ | :------------- | | Total Capital (to risk-weighted assets) | 14.95 | 14.27 | | Tier 1 Capital (to risk-weighted assets) | 12.20 | 13.26 | | Common Equity Tier 1 Capital (to risk-weighted assets) | 11.86 | 13.26 | | Tier 1 Capital (to average assets) | 10.37 | 11.32 | | Capital Conservation Buffer | 6.20 | 6.27 | - The Bank's capital ratios exceeded the minimum requirements to be considered 'well capitalized' as of December 31, 2023[81](index=81&type=chunk)[466](index=466&type=chunk) [Item 1A. Risk Factors](index=20&type=section&id=Item%201A.%20Risk%20Factors) This section outlines significant risks that could adversely affect the company's business, financial condition, and operating results, including concentrations in commercial lending and real estate, environmental liabilities, economic conditions, and regulatory changes. - The Bank has significant loan concentrations in lessors of non-residential buildings (**28.2%**), hospitality (**12.0%**), and retail (**5.0%**) as of December 31, 2023, making it vulnerable to downturns in these industries[107](index=107&type=chunk)[108](index=108&type=chunk) - A substantial portion of the loan portfolio (**75.0%** or **$4.64 billion** at December 31, 2023) consists of commercial real estate and commercial and industrial loans, which carry higher risks of non-payment and loss compared to residential loans[109](index=109&type=chunk) - The company's operations are highly concentrated in California, Illinois, Texas, Georgia, and New York, with a majority in Southern California, making it susceptible to adverse economic conditions or natural disasters in these regions[116](index=116&type=chunk)[117](index=117&type=chunk)[158](index=158&type=chunk) - Inflation can adversely impact the business by decreasing the value of assets, increasing operating costs, and reducing customers' ability to repay loans[113](index=113&type=chunk)[114](index=114&type=chunk) - Changes in laws and regulations, including those from the Federal Reserve Board and Dodd-Frank Act, can increase operating costs, limit activities, and impose additional compliance burdens[121](index=121&type=chunk)[123](index=123&type=chunk)[125](index=125&type=chunk) - The company faces significant cybersecurity risks, including potential disruptions, data breaches, and misuse of confidential information, which could damage reputation, increase costs, and lead to financial losses[131](index=131&type=chunk)[133](index=133&type=chunk)[136](index=136&type=chunk) - The allowance for credit losses may not be adequate to cover actual losses, as it relies on management's estimates and assumptions about economic conditions and borrower creditworthiness, which can be incorrect[145](index=145&type=chunk)[146](index=146&type=chunk) - Profitability is highly dependent on net interest income, making the company vulnerable to substantial and prolonged changes in market interest rates, which can compress net interest spread and margin[148](index=148&type=chunk)[149](index=149&type=chunk) [Item 1B. Unresolved Staff Comments](index=31&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) This section states that there are no unresolved staff comments from the SEC. - There are no unresolved staff comments[165](index=165&type=chunk) [Item 1C. Cybersecurity](index=31&type=section&id=Item%201C.%20Cybersecurity) Cybersecurity is a critical component of the Company's risk management strategy, overseen by the Information Security Officer and the Risk, Compliance and Planning Committee, employing a multi-layered 'defense-in-depth' approach. - Cybersecurity is a significant and integrated component of the Company's risk management strategy, focused on protecting the confidentiality, integrity, and availability of sensitive information[166](index=166&type=chunk) - The Company implements a multi-layered 'defense-in-depth' cybersecurity strategy, incorporating people, technology, and processes, including employee education, periodic tabletop exercises, recovery tests, and infrastructure penetration tests[167](index=167&type=chunk)[169](index=169&type=chunk) - The Risk, Compliance and Planning Committee of the Board of Directors provides oversight of the information security program, receiving quarterly reports on cybersecurity metrics[172](index=172&type=chunk) - To date, the Company has not experienced a cybersecurity incident materially affecting its business strategy, results of operations, or financial condition[170](index=170&type=chunk) [Item 2. Properties](index=33&type=section&id=Item%202.%20Properties) As of December 31, 2023, Hanmi Financial operated 43 properties, comprising 35 branch offices and eight loan production offices, with a net investment in premises and equipment of $22.0 million. - As of December 31, 2023, Hanmi Financial had **43 properties**: **35 branch offices** and **8 loan production offices**[174](index=174&type=chunk) - The company owns **8 locations** and leases the remaining properties[174](index=174&type=chunk) Premises and Equipment (December 31, 2023) | Metric | Amount ($ millions) | | :----------------------------------------- | :------------------ | | Consolidated investment in premises and equipment, net | 22.0 | | Lease expense (net of lease income) | 8.8 | [Item 3. Legal Proceedings](index=33&type=section&id=Item%203.%20Legal%20Proceedings) Hanmi Financial and its subsidiaries are subject to various lawsuits and claims in the ordinary course of business, which management believes will not have a material adverse effect on the company's financial position. - Hanmi Financial and its subsidiaries are involved in lawsuits and claims arising in the ordinary course of business[176](index=176&type=chunk) - Management believes that the outcome of these legal proceedings will not have a material adverse effect on the company's business, financial condition, or results of operations[176](index=176&type=chunk) [Item 4. Mine Safety Disclosures](index=33&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to Hanmi Financial Corporation. - This item is not applicable[177](index=177&type=chunk) Part II [Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=34&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) Hanmi Financial's common stock is traded on the Nasdaq Global Select Market under 'HAFC', with approximately 635 record holders as of February 21, 2024, and the company repurchased 50,000 shares in Q4 2023. - Hanmi Financial's common stock is traded on the Nasdaq Global Select Market under the symbol **'HAFC'**[180](index=180&type=chunk) - As of February 21, 2024, there were approximately **635 record holders** of the common stock[180](index=180&type=chunk) Cumulative Total Stockholder Return (2019-2023) | Index | 2019 ($) | 2020 ($) | 2021 ($) | 2022 ($) | 2023 ($) | | :-------------------------- | :----- | :----- | :------ | :------ | :----- | | Hanmi Financial Corporation | $100.00 | $56.70 | $118.40 | $123.75 | $97.00 | | Nasdaq Composite | $100.00 | $143.64 | $174.36 | $116.65 | $167.30 | | S&P 500 Financials | $100.00 | $95.90 | $127.11 | $111.41 | $122.48 | | S&P U.S. Small Cap Banks | $100.00 | $87.74 | $119.31 | $102.54 | $99.58 | - The company repurchased **50,000 shares** of common stock at an average price of **$14.76 per share** during the three months ended December 31, 2023[184](index=184&type=chunk) - As of December 31, 2023, **409,972 shares** remained available for repurchase under the authorized program[184](index=184&type=chunk) [Item 6. [RESERVED]](index=35&type=section&id=Item%206.%20%5BRESERVED%5D) This item is reserved and contains no information. [Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=36&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's analysis of Hanmi Financial's financial condition and results of operations for 2023, 2022, and 2021, covering critical accounting policies, an executive overview, detailed results of operations, and financial condition analysis. - Net income decreased by **$21.4 million (21.1%)** to **$80.0 million** in 2023 from **$101.4 million** in 2022, primarily due to a **$16.4 million** decrease in net interest income, a **$6.2 million** increase in noninterest expense, and a **$3.5 million** increase in credit loss expense, partially offset by a **$4.8 million** decrease in income tax expense[201](index=201&type=chunk) Key Financial Highlights (2021-2023) | Metric | 2023 ($ millions) | 2022 ($ millions) | 2021 ($ millions) | | :-------------------------------------- | :---------------- | :---------------- | :---------------- | | Net Income | 80.0 | 101.4 | 98.7 | | Diluted EPS | $2.62 | $3.32 | $3.22 | | Loans receivable (end of period) | 6,180.0 | 5,970.0 | 5,080.0 | | Securities (end of period) | 865.7 | 853.8 | N/A | | Deposits (end of period) | 6,280.0 | 6,170.0 | 5,790.0 | | Borrowings (end of period) | 325.0 | 350.0 | N/A | | Cash dividends per share | $1.00 | $0.94 | $0.54 | | Return on average assets | 1.08% | 1.44% | N/A | | Return on average stockholders' equity | 10.70% | 14.83% | N/A | - Loans receivable increased by **$215.3 million (3.6%)** to **$6.18 billion** as of December 31, 2023, driven by **$1.29 billion** in production, offset by **$1.07 billion** in payoffs and prepayments[204](index=204&type=chunk) - Deposits increased by **$112.5 million (1.8%)** to **$6.28 billion** at December 31, 2023, primarily due to increases in time deposits and money market/savings deposits, partially offset by a decrease in non-interest bearing demand deposits[204](index=204&type=chunk)[263](index=263&type=chunk)[264](index=264&type=chunk) - Stockholders' equity increased by **$64.4 million** to **$701.9 million** at December 31, 2023, mainly due to net income and an increase in unrealized after-tax gain on securities available for sale[270](index=270&type=chunk) [Critical Accounting Policies](index=36&type=section&id=Critical%20Accounting%20Policies) The Company's critical accounting policies involve significant estimates and assumptions, particularly for the Allowance for Credit Losses (ACL) and Allowance for Credit Losses related to Off-Balance Sheet Items, which incorporate quantitative and qualitative factors. - The Allowance for Credit Losses (ACL) and Allowance for Credit Losses related to Off-Balance Sheet Items are critical accounting policies requiring significant management estimates and assumptions[187](index=187&type=chunk)[188](index=188&type=chunk) - Methodologies for ACL incorporate quantitative factors (historical loss experiences, risk ratings, delinquency trends, collateral values) and qualitative factors (general economic forecasts, credit concentrations, changes in lending management, interest rates)[188](index=188&type=chunk)[189](index=189&type=chunk) - The Company uses Moody's baseline and alternative economic scenarios, and FOMC quarterly projections for federal funds target rates, as qualitative factors in its allowance calculations[190](index=190&type=chunk)[197](index=197&type=chunk)[198](index=198&type=chunk) [Allowance Attribution Analysis](index=37&type=section&id=Allowance%20Attribution%20Analysis) The allowance for credit losses (ACL) at December 31, 2023, was $69.462 million, with analysis detailing the impact of charge-offs, recoveries, and provisions attributed to qualitative and quantitative considerations, as well as individually evaluated loans. Allowance for Credit Losses (December 31, 2023) | Metric | Amount ($ thousands) | | :----------------------------------------- | :------------------- | | Balance at December 31, 2022 | 71,523 | | Charge-offs | (16,090) | | Recoveries | 9,047 | | Provision (recovery) attributed to qualitative considerations | (2,525) | | Provision attributed to quantitative considerations | 371 | | Provision attributed to individually evaluated loans | 7,136 | | **Balance at December 31, 2023** | **69,462** | Key Economic Assumptions for ACL (December 31, 2023 vs 2022) | Economic Factor | 12/31/2023 (%) | 12/31/2022 (%) | | :------------------------ | :--------- | :--------- | | Prepayment rates | 14.44 | 14.52 | | Curtailment rates | 83.72 | 85.80 | | Unemployment rate (Baseline) | 3.96 | 4.00 | | GDP growth rate YoY (Alt. Scenario 3) | (0.91) | (1.29) | | Consumer sentiment (Alt. Scenario 3) | 71.78 | 70.10 | | Federal funds target rate (1-year forecast) | 4.6 | 5.1 | Sensitivity Analysis of ACL to Key Assumptions (December 31, 2023) | Assumption Change | Increase ($ thousands) | Decrease ($ thousands) | | :---------------------------------------------- | :--------------------- | :--------------------- | | Forecast period (from 12 to 6 or 24 months) | 494 | (1,267) | | Estimated unemployment rate (from Baseline to S2 or S1) | 10,658 | (2,643) | | Estimated prepayment and curtailment rates (+/-10%) | 538 | (539) | | Estimated GDP growth rate (from S3 to S4 or S2) | 33 | (57) | | Consumer sentiment (from S3 to S4 or S2) | 654 | (2,091) | | Federal funds target rate (+/- 25 bps) | 100 | (100) | [Executive Overview](index=38&type=section&id=Executive%20Overview) Hanmi Financial reported net income of $80.0 million for 2023, a 21.1% decrease from $101.4 million in 2022, primarily due to lower net interest income and higher noninterest and credit loss expenses. Net Income and EPS (2021-2023) | Metric | 2023 ($ millions) | 2022 ($ millions) | 2021 ($ millions) | | :----------------- | :---------------- | :---------------- | :---------------- | | Net Income | 80.0 | 101.4 | 98.7 | | Diluted EPS | $2.62 | $3.32 | $3.22 | - The decrease in net income for 2023 was driven by a **$16.4 million** decrease in net interest income, a **$6.2 million** increase in noninterest expense, and a **$3.5 million** increase in credit loss expense, partially offset by a **$4.8 million** decrease in income tax expense[201](index=201&type=chunk) Key Financial Metrics (2023 vs 2022) | Metric | 2023 ($ millions) | 2022 ($ millions) | Change ($ millions) | Change (%) | | :-------------------------------------- | :---------------- | :---------------- | :------------------ | :--------- | | Loans receivable | 6,180.0 | 5,970.0 | 210.0 | 3.5 | | Securities | 865.7 | 853.8 | 11.9 | 1.4 | | Deposits | 6,280.0 | 6,170.0 | 110.0 | 1.8 | | Borrowings | 325.0 | 350.0 | (25.0) | (7.1) | | Cash dividends per share | $1.00 | $0.94 | $0.06 | 6.4 | | Return on average assets | 1.08% | 1.44% | (0.36 pp) | (25.0) | | Return on average stockholders' equity | 10.70% | 14.83% | (4.13 pp) | (27.8) | [Results of Operations](index=38&type=section&id=Results%20of%20Operations) This section details the company's financial performance, including net interest income, credit loss expense, noninterest income, noninterest expense, and income tax expense, highlighting changes in 2023 compared to prior years. [Net Interest Income](index=38&type=section&id=Net%20Interest%20Income) Net interest income decreased by $16.4 million (6.9%) to $221.3 million in 2023, primarily due to a significant increase in interest expense on deposits and borrowings, which outpaced the rise in interest income from earning assets. - Net interest income, on a taxable equivalent basis, decreased by **$16.4 million (6.9%)** to **$221.3 million** in 2023 from **$237.6 million** in 2022[209](index=209&type=chunk) - The decrease in 2023 net interest income was primarily due to higher rates paid on deposits and borrowings and higher average time deposit balances, partially offset by increases in average interest-earning asset yields and average loan balances[209](index=209&type=chunk) Net Interest Income and Margin (2021-2023) | Metric | 2023 | 2022 | 2021 | | :-------------------------------------- | :-------- | :-------- | :-------- | | Net Interest Income (taxable equivalent basis) | $221,271 | $237,647 | $195,050 | | Net Interest Spread (taxable equivalent basis) | 1.74% | 3.02% | 2.81% | | Net Interest Margin (taxable equivalent basis) | 3.08% | 3.50% | 3.08% | | Average Interest-Earning Assets | $7,182,790 | $6,799,516 | $6,340,769 | | Average Interest-Bearing Liabilities | $4,343,936 | $3,581,964 | $3,553,115 | - The average yield on interest-earning assets increased by **112 basis points** to **5.15%** in 2023, while the average rate paid on interest-bearing liabilities increased by **240 basis points** to **3.41%**[211](index=211&type=chunk) - In 2022, net interest income increased by **$42.6 million (21.8%)** from 2021, driven by higher average yields and balances on interest-earning assets[212](index=212&type=chunk) [Credit Loss Expense](index=41&type=section&id=Credit%20Loss%20Expense) Credit loss expense significantly increased to $4.3 million in 2023 from $0.8 million in 2022, primarily due to a $5.2 million increase in specific allowances stemming from a nonperforming commercial and industrial loan. Credit Loss Expense (Recovery) (2021-2023) | Metric | 2023 ($ millions) | 2022 ($ millions) | 2021 ($ millions) | | :------------------------- | :---------------- | :---------------- | :---------------- | | Credit Loss Expense (Recovery) | 4.3 | 0.8 | (24.4) | - The increase in credit loss expense in 2023 compared to 2022 was mainly attributable to a **$5.2 million** increase in specific allowances arising from a charge-off on a **$10.0 million** nonperforming commercial and industrial loan in the health-care industry[216](index=216&type=chunk) - For 2021, the company recorded a credit loss recovery of **$24.4 million**, including a **$24.1 million** negative provision for credit losses[217](index=217&type=chunk) [Noninterest Income](index=42&type=section&id=Noninterest%20Income) Noninterest income remained essentially unchanged at $34.2 million in 2023 compared to 2022, with a decrease in SBA loan sales offset by gains from a branch building sale-leaseback and a legal settlement. Noninterest Income Components (2021-2023) | Component | 2023 ($ thousands) | 2022 ($ thousands) | 2021 ($ thousands) | | :-------------------------------------- | :----------------- | :----------------- | :----------------- | | Service charges on deposit accounts | 10,147 | 11,488 | 11,043 | | Trade finance and other service charges and fees | 4,832 | 4,805 | 4,628 | | Servicing income | 3,177 | 2,757 | 2,820 | | Bank-owned life insurance income | 792 | 832 | 1,011 | | All other operating income | 5,458 | 4,840 | 3,857 | | Gain on sale of SBA loans | 5,701 | 9,478 | 17,266 | | Net gain (loss) on sales of securities | (1,871) | — | (499) | | Gain on sale of bank premises | 4,000 | — | 45 | | Legal settlement | 1,943 | — | 325 | | **Total Noninterest Income** | **34,179** | **34,200** | **40,496** | - Noninterest income in 2023 was essentially unchanged from 2022, with a **$3.8 million** decrease in gain on sale of SBA loans offset by a **$4.0 million** gain on a branch building sale-leaseback and **$1.9 million** from a legal settlement[219](index=219&type=chunk) - In 2022, noninterest income decreased by **$6.3 million (15.5%)** compared to 2021, primarily due to a **$7.8 million** decrease in gain on sale of SBA loans[220](index=220&type=chunk) [Noninterest Expense](index=42&type=section&id=Noninterest%20Expense) Noninterest expense increased by $6.2 million (4.8%) to $136.5 million in 2023, mainly driven by higher salaries and employee benefits, occupancy and equipment, professional fees, and data processing expenses. Noninterest Expense Components (2021-2023) | Component | 2023 ($ thousands) | 2022 ($ thousands) | 2021 ($ thousands) | | :---------------------------- | :----------------- | :----------------- | :----------------- | | Salaries and employee benefits | 81,398 | 76,140 | 72,561 | | Occupancy and equipment | 18,340 | 17,648 | 19,075 | | Data processing | 13,695 | 13,134 | 12,003 | | Professional fees | 6,255 | 5,692 | 5,566 | | Supplies and communications | 2,479 | 2,638 | 3,026 | | Advertising and promotion | 3,105 | 3,637 | 2,649 | | All other operating expenses | 11,306 | 11,386 | 9,870 | | **Total Noninterest Expense** | **136,527** | **130,284** | **124,455** | - Noninterest expense increased by **$6.2 million (4.8%)** in 2023, primarily due to a **$5.3 million (6.9%)** increase in salaries and benefits, higher occupancy and equipment expense, professional fees, and data processing expenses[222](index=222&type=chunk) - The increase in salaries and benefits in 2023 was attributed to annual merit increases, higher benefit costs, and decreased capitalized loan origination costs[222](index=222&type=chunk) - In 2022, noninterest expense increased by **$5.8 million (4.7%)** compared to 2021, mainly due to a **$3.6 million (4.9%)** increase in salaries and benefits from salary increases and increased staffing[223](index=223&type=chunk) [Income Tax Expense](index=44&type=section&id=Income%20Tax%20Expense) Income tax expense for 2023 was $34.5 million, down from $39.3 million in 2022, with an effective tax rate of 30.1%, higher than 27.9% in 2022 due to increased permanent difference addbacks and valuation allowances. Income Tax Expense and Effective Tax Rate (2021-2023) | Metric | 2023 ($ millions) | 2022 ($ millions) | 2021 ($ millions) | | :----------------- | :---------------- | :---------------- | :---------------- | | Income Tax Expense | 34.5 | 39.3 | 36.8 | | Effective Tax Rate | 30.1% | 27.9% | 27.2% | - The higher effective tax rate in 2023 compared to 2022 was primarily due to increases in permanent difference addbacks and valuation allowances for state net operating loss carryforwards[224](index=224&type=chunk) [Financial Condition](index=44&type=section&id=Financial%20Condition) This section provides a detailed overview of the company's balance sheet items, including securities, loan portfolio, loan quality, nonperforming assets, allowance for credit losses, deposits, borrowings, and stockholders' equity. [Securities Portfolio](index=44&type=section&id=Securities%20Portfolio) As of December 31, 2023, the securities portfolio, primarily available-for-sale debt securities, increased by $11.9 million (1.4%) to $865.7 million, mainly due to a decrease in unrealized losses. - The securities portfolio, consisting of available-for-sale debt securities, increased by **$11.9 million (1.4%)** to **$865.7 million** at December 31, 2023, from **$853.8 million** at December 31, 2022[227](index=227&type=chunk) - The increase in securities was primarily attributable to a decrease in unrealized losses during 2023[227](index=227&type=chunk) Securities Available for Sale by Maturity (December 31, 2023) | Maturity Period | Amount (Amortized Cost, $ thousands) | Yield (%) | | :-------------------------- | :----------------------------------- | :-------- | | Within One Year | 62,521 | 3.36 | | Over One Year Through Five Years | 164,826 | 2.00 | | Over Five Years Through Ten Years | 47,630 | 2.47 | | After Ten Years | 692,054 | 1.84 | | **Total** | **967,031** | **2.00** | [Loan Portfolio](index=45&type=section&id=Loan%20Portfolio) The loan portfolio (excluding loans held for sale) increased by $217.4 million (3.7%) to $6.11 billion at December 31, 2023, driven by new loan production, with commercial real estate loans remaining the largest segment. - Loans receivable (net of deferred loan costs and allowance for credit losses) increased by **$217.4 million (3.7%)** to **$6.11 billion** at December 31, 2023[230](index=230&type=chunk) - Loan originations in 2023 totaled **$1.29 billion**, including commercial real estate (**$400.8 million**), commercial and industrial (**$183.4 million**), residential/consumer (**$305.9 million**), equipment financing (**$248.6 million**), and SBA loans (**$149.9 million**)[230](index=230&type=chunk) Loan Portfolio Composition (December 31, 2023) | Loan Type | Balance ($ thousands) | Percentage of Total Loans | | :---------------------------- | :-------------------- | :------------------------ | | Commercial property | 3,789,394 | 61.3% | | Construction | 100,345 | 1.6% | | Residential | 962,661 | 15.6% | | Commercial and industrial loans | 747,819 | 12.1% | | Equipment financing agreements | 582,215 | 9.4% | | **Total Loans Receivable** | **6,182,434** | **100.0%** | - As of December 31, 2023, the loan portfolio had concentrations in lessors of non-residential buildings (**$1.74 billion or 28.2%**) and hospitality (**$744.6 million or 12.0%**)[236](index=236&type=chunk) - The loan portfolio was comprised of **$3.13 billion (50.6%)** in fixed-rate loans and **$3.05 billion (49.4%)** in variable-rate loans as of December 31, 2023[232](index=232&type=chunk) [Loan Quality Indicators](index=47&type=section&id=Loan%20Quality%20Indicators) Loan quality indicators showed an increase in loans 30 to 89 days past due to $10.3 million in 2023, primarily from equipment financing agreements, while special mention and classified loans decreased due to upgrades and paydowns. Loans 30-89 Days Past Due (2021-2023) | Metric | 2023 ($ millions) | 2022 ($ millions) | 2021 ($ millions) | | :----------------------------------- | :---------------- | :---------------- | :---------------- | | Loans 30 to 89 days past due and still accruing | 10.3 | 7.5 | 5.9 | - The increase in 30-89 days past due loans in 2023 was primarily attributable to a **$7.6 million** increase in past due equipment financing agreements[239](index=239&type=chunk) - There were no loans 90 days or more past due and still accruing interest as of December 31, 2023, 2022, and 2021[240](index=240&type=chunk) Criticized and Classified Loans (December 31, 2023 vs 2022) | Category | 12/31/2023 ($ thousands) | 12/31/2022 ($ thousands) | Change ($ thousands) | Change (%) | | :---------------- | :----------------------- | :----------------------- | :------------------- | :--------- | | Special Mention | 65,315 | 79,013 | (13,698) | (17.3) | | Classified | 31,367 | 46,192 | (14,825) | (32.1) | - The decrease in special mention loans was due to **$60.0 million** in upgrades to pass loans and **$1.7 million** in paydowns/payoffs, partially offset by downgrades from pass loans[241](index=241&type=chunk) - The decrease in classified loans was primarily due to **$20.1 million** in loan upgrades, **$5.5 million** in paydowns/payoffs, and **$2.8 million** in charge-offs[242](index=242&type=chunk) [Nonperforming Assets](index=49&type=section&id=Nonperforming%20Assets) Nonperforming assets increased to $15.6 million (0.21% of total assets) at December 31, 2023, driven by a 58.2% increase in nonaccrual loans, partially offset by resolutions. Nonperforming Assets (December 31, 2023 vs 2022) | Metric | 12/31/2023 ($ thousands) | 12/31/2022 ($ thousands) | Change ($ thousands) | Change (%) | | :----------------------------------- | :----------------------- | :----------------------- | :------------------- | :--------- | | Nonaccrual loans | 15,474 | 9,846 | 5,628 | 57.2 | | Loans 90 days or more past due and still accruing | — | — | — | — | | Total Nonperforming Loans Receivable | 15,474 | 9,846 | 5,628 | 57.2 | | Other Real Estate Owned (OREO) | 117 | 117 | — | — | | **Total Nonperforming Assets** | **15,591** | **9,963** | **5,628** | **56.5** | - Nonaccrual loans increased by **$5.7 million (58.2%)** in 2023, resulting from **$12.7 million** in additions to nonperforming loans, offset by **$7.0 million** in payoffs, paydowns, note sales, or upgrades[246](index=246&type=chunk) - Individually evaluated allowances for nonperforming loans increased by **$0.1 million** to **$3.4 million** at December 31, 2023[247](index=247&type=chunk) - Repossessed personal property assets associated with equipment finance agreements increased to **$1.3 million** at December 31, 2023, from **$0.5 million** in 2022[248](index=248&type=chunk) [Individually Evaluated Loans](index=51&type=section&id=Individually%20Evaluated%20Loans) Individually evaluated loans increased by $5.6 million (56.8%) to $15.4 million at December 31, 2023, primarily due to the addition of a $10.0 million nonperforming commercial and industrial loan in the healthcare industry. Individually Evaluated Loans (2021-2023) | Metric | 2023 ($ millions) | 2022 ($ millions) | 2021 ($ millions) | | :------------------------- | :---------------- | :---------------- | :---------------- | | Individually Evaluated Loans | 15.4 | 9.8 | 13.4 | | Specific Allowance Allocations | 3.4 | 3.3 | N/A | - The increase in individually evaluated loans in 2023 primarily reflected the addition of a **$10.0 million** nonperforming commercial and industrial loan in the health-care industry, with a **$5.2 million** charge-off[251](index=251&type=chunk) - No loans were modified to borrowers with financial difficulties for which a concession was made during 2021, 2022, or 2023[252](index=252&type=chunk) [Allowance for Credit Losses and Allowance for Credit Losses Related to Off-Balance Sheet Items](index=51&type=section&id=Allowance%20for%20Credit%20Losses%20and%20Allowance%20for%20Credit%20Losses%20Related%20to%20Off-Balance%20Sheet%20Items) The allowance for credit losses (ACL) decreased to $69.5 million at December 31, 2023, with the ACL as a percentage of loans decreasing to 1.12%, reflecting a reduction in required reserves due to loan upgrades. Allowance for Credit Losses (ACL) Ratios (2021-2023) | Ratio | 2023 | 2022 | 2021 | | :---------------------------------- | :------ | :------ | :------ | | Allowance for credit losses to loans | 1.12% | 1.20% | 1.41% | | Nonaccrual loans to loans | 0.25% | 0.17% | 0.26% | | Allowance for credit losses to nonaccrual loans | 448.89% | 726.42% | 543.09% | - The allowance for credit losses decreased to **$69.5 million** at December 31, 2023, from **$71.5 million** at December 31, 2022, primarily reflecting a reduction in required reserves due to upgrades of loans previously adversely affected by the pandemic[260](index=260&type=chunk) - The Company uses DCF, PD/LGD, and WARM methods for collective allowance estimation, leveraging Moody's economic projections and the national unemployment rate as the primary loss driver[254](index=254&type=chunk)[255](index=255&type=chunk)[257](index=257&type=chunk)[258](index=258&type=chunk) Net Charge-offs (Recoveries) by Loan Portfolio (2021-2023) | Loan Portfolio Segment | 2023 Net (Charge-offs) / Recoveries ($ thousands) | 2022 Net (Charge-offs) / Recoveries ($ thousands) | 2021 Net (Charge-offs) / Recoveries ($ thousands) | | :------------------------------ | :------------------------------------------------ | :------------------------------------------------ | :------------------------------------------------ | | Commercial real estate loans | (322) | (1,041) | 420 | | Construction loans | — | — | 8,954 | | Residential loans | 7 | 3 | 6 | | Commercial and industrial loans | 432 | 654 | 351 | | Equipment financing agreements | (7,160) | (990) | (3,454) | | **Total** | **(7,043)** | **(1,374)** | **6,277** | - Net loan charge-offs were **$7.0 million (0.12% of average loans)** in 2023, compared to **$1.4 million (0.02%)** in 2022. Gross charge-offs in 2023 included a **$5.2 million** charge-off on a healthcare C&I loan and **$8.8 million** from equipment financing arrangements[261](index=261&type=chunk) - The allowance for off-balance sheet exposure decreased by **$0.6 million (20.6%)** to **$2.5 million** at December 31, 2023[262](index=262&type=chunk) [Deposits](index=53&type=section&id=Deposits) Total deposits increased by $112.5 million (1.8%) to $6.28 billion at December 31, 2023, primarily driven by a shift towards time deposits and money market/savings accounts, offset by a decrease in non-interest bearing demand deposits. Deposit Composition (December 31, 2023 vs 2022) | Deposit Type | 12/31/2023 ($ thousands) | % | 12/31/2022 ($ thousands) | % | | :---------------------------- | :----------------------- | :--- | :----------------------- | :--- | | Demand – noninterest-bearing | 2,003,596 | 31.9 | 2,539,602 | 41.3 | | Interest-bearing: | | | | | | Demand | 87,452 | 1.4 | 115,573 | 1.9 | | Money market and savings | 1,734,659 | 27.6 | 1,556,690 | 25.2 | | Uninsured time deposits > $250,000 | 680,971 | 10.8 | 498,948 | 8.0 | | All other insured time deposits | 1,773,846 | 28.2 | 1,458,209 | 23.6 | | **Total Deposits** | **6,280,574** | **100.0** | **6,168,072** | **100.0** | - Total deposits increased by **$112.5 million (1.8%)** in 2023, driven by a **$498.7 million** increase in time deposits and a **$178.0 million** increase in money market and savings accounts, offset by a **$536.0 million** decrease in non-interest bearing demand deposits[264](index=264&type=chunk) - The loan-to-deposit ratio was **98.4%** at December 31, 2023, up from **96.7%** at December 31, 2022[264](index=264&type=chunk) - As of December 31, 2023, uninsured deposits totaled **$2.52 billion**, with **$681.0 million** in uninsured time deposits and **$1.84 billion** in other uninsured deposits (demand, money market, savings)[266](index=266&type=chunk) - Wholesale funds included **$325.0 million** in FHLB advances, **$58.3 million** in brokered deposits, and **$120.0 million** in State of California time deposits at December 31, 2023[267](index=267&type=chunk) [Borrowings and Subordinated Debentures](index=54&type=section&id=Borrowings%20and%20Subordinated%20Debentures) Borrowings, primarily FHLB advances, decreased by $25.0 million to $325.0 million at December 31, 2023, as deposit growth was used to pay off some advances, while subordinated debentures remained stable at $130.0 million. - Borrowings, mainly FHLB advances, decreased by **$25.0 million** to **$325.0 million** at December 31, 2023, from **$350.0 million** at December 31, 2022[268](index=268&type=chunk) - Funds from deposit growth not used for loan production were utilized to pay off borrowings[268](index=268&type=chunk) FHLB Advances Maturity (December 31, 2023) | Maturity Period | Outstanding Balance ($ thousands) | Weighted Average Rate (%) | | :-------------------------------- | :-------------------------------- | :------------------------ | | Open advances | 212,500 | 5.70 | | Advances due within 12 months | 37,500 | 0.40 | | Advances due over 12-24 months | 12,500 | 1.90 | | Advances due over 24-36 months | 62,500 | 4.37 | | **Total Outstanding Advances** | **325,000** | **4.69** | - Subordinated debentures were **$130.0 million** at December 31, 2023, consisting of fixed-to-floating subordinated notes and junior subordinated deferrable interest debentures[269](index=269&type=chunk) [Stockholder's Equity](index=54&type=section&id=Stockholder%27s%20Equity) Stockholders' equity increased by $64.4 million to $701.9 million at December 31, 2023, primarily driven by net income and an increase in unrealized after-tax gain on available-for-sale securities, partially offset by share repurchases. Stockholders' Equity (December 31, 2023 vs 2022) | Metric | 12/31/2023 ($ millions) | 12/31/2022 ($ millions) | Change ($ millions) | Change (%) | | :---------------------- | :---------------------- | :---------------------- | :------------------ | :--------- | | Total Stockholders' Equity | 701.9 | 637.5 | 64.4 | 10.1 | - The increase in stockholders' equity was due to **$49.5 million** from net income (after **$30.5 million** in dividends paid) and a **$16.8 million** increase in unrealized after-tax gain on securities available for sale[270](index=270&type=chunk)[271](index=271&type=chunk) - The company repurchased **250,000 shares** during 2023 at an average price of **$16.34 per share**, totaling **$4.1 million**[271](index=271&type=chunk) - As of December 31, 2023, **409,972 shares** remained under the Company's share repurchase program[271](index=271&type=chunk) [Interest Rate Risk Management](index=55&type=section&id=Interest%20Rate%20Risk%20Management) The Company manages interest rate risk through asset/liability management and simulation modeling to achieve stable earnings and protect capital, with December 31, 2023, results indicating potential declines in net interest income and economic value of equity in falling rate environments. - The Company manages interest rate risk to ensure capital protection through stable earnings, using asset/liability management and simulation modeling[272](index=272&type=chunk)[273](index=273&type=chunk) Net Interest Income Simulation (December 31, 2023) | Change in Interest Rate | 1- to 12-Month Horizon ($ thousands) | 1- to 12-Month Horizon (%) | 13- to 24-Month Horizon ($ thousands) | 13- to 24-Month Horizon (%) | | :---------------------- | :----------------------------------- | :------------------------- | :------------------------------------ | :-------------------------- | | 300% | (1,869) | (0.84) | 4,454 | 1.75 | | 200% | (2,029) | (0.92) | 843 | 0.33 | | 100% | (56) | (0.03) | 2,528 | 0.99 | | (100%) | (1,703) | (0.77) | (6,482) | (2.55) | | (200%) | (5,147) | (2.32) | (16,981) | (6.68) | | (300%) | (10,084) | (4.55) | (31,131) | (12.24) | Economic Value of Equity (EVE) Simulation (December 31, 2023) | Change in Interest Rate | Dollar Change ($ thousands) | Percentage Change (%) | | :---------------------- | :-------------------------- | :-------------------- | | 300% | (56,333) | (8.51) | | 200% | (39,880) | (6.02) | | 100% | (10,210) | (1.54) | | (100%) | (8,396) | (1.27) | | (200%) | (38,669) | (5.84) | | (300%) | (92,019) | (13.90) | Key Assumptions for Interest Rate Risk Modeling | Assumption | Rate (%) | | :-------------------------- | :------- | | Conditional prepayment rates: | | | Loans receivable | 15 | | Securities | 6 | | Deposit rate betas: | | | NOW, savings, money market demand | 48 | | Time deposits, retail and wholesale | 76 | [Capital Resources and Liquidity](index=57&type=section&id=Capital%20Resources%20and%20Liquidity) The Company's capital resources are primarily derived from retained operating earnings, with the Bank maintaining 'well capitalized' status and robust liquidity management through deposits and significant borrowing capacity from the FHLB and Federal Reserve. - The primary source of capital is the retention of operating earnings, with management assessing projected sources and uses of capital[278](index=278&type=chunk) - The Bank's ability to pay dividends to shareholders is restricted by California law, based on retained earnings or net income over the last three fiscal years[279](index=279&type=chunk) - As of January 1, 2024, the Bank had the ability to pay **$174.5 million** in dividends without prior DFPI approval[279](index=279&type=chunk) - At December 31, 2023, the Bank was categorized as **'well capitalized'**, with all capital ratios exceeding minimum requirements (e.g., Total risk-based capital ratio of **14.27%**, Tier 1 leverage capital ratio of **11.32%**)[280](index=280&type=chunk) - The Bank's liquidity management aims to meet daily cash flow requirements, primarily through deposits and significant borrowing capacity from the FHLB (**$1.09 billion** remaining available at December 31, 2023) and the Federal Reserve Discount Window (**$23.2 million** available)[283](index=283&type=chunk)[540](index=540&type=chunk)[541](index=541&type=chunk)[543](index=543&type=chunk) [Off-Balance Sheet Arrangements](index=57&type=section&id=Off-Balance%20Sheet%20Arrangements) This section refers to Note 19 for details on off-balance sheet arrangements, which include commitments to extend credit and standby letters of credit, carrying credit and interest rate risks. - Off-balance sheet arrangements include commitments to extend credit and standby letters of credit, which expose the Bank to credit and interest rate risks[285](index=285&type=chunk)[519](index=519&type=chunk) - The Bank maintains an allowance for credit losses related to these unfunded commitments, based on the probability of usage and credit risk factors[285](index=285&type=chunk)[523](index=523&type=chunk) [Item 7A. Quantitative and Qualitative Disclosures About Market Risk](index=57&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section refers to the 'Interest Rate Risk Management' and 'Capital Resources and Liquidity' subsections within Item 7 for quantitative and qualitative disclosures regarding market risks. - Quantitative and qualitative disclosures about market risks are provided in the 'Interest Rate Risk Management' and 'Capital Resources and Liquidity' sections of Item 7[286](index=286&type=chunk) [Item 8. Financial Statements and Supplementary Data](index=58&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This item indicates that the required financial statements and supplementary data are presented on pages 51 through 104 of the report. - The financial statements and supplementary data are located on pages 51 through 104 of this report[287](index=287&type=chunk) [Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=58&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) This item states that there have been no changes in or disagreements with accountants on accounting and financial disclosure. - There have been no changes in or disagreements with accountants on accounting and financial disclosure[288](index=288&type=chunk) [Item 9A. Controls and Procedures](index=58&type=section&id=Item%209A.%20Controls%20and%20Procedures) As of December 31, 2023, Hanmi Financial's management concluded that the company's disclosure controls and procedures and internal control over financial reporting were effective, with no material changes during Q4 2023. - As of December 31, 2023, the Company's principal executive officer and principal financial officer concluded that the disclosure controls and procedures were effective[290](index=290&type=chunk) - Management assessed and concluded that Hanmi Financial maintained effective internal control over financial reporting as of December 31, 2023, based on criteria from the COSO framework[293](index=293&type=chunk) - No material changes in internal control over financial reporting occurred during the fourth quarter of fiscal 2023[294](index=294&type=chunk) - Crowe LLP, the independent registered public accounting firm, issued an audit report on the effectiveness of Hanmi Financial's internal control over financial reporting as of December 31, 2023[295](index=295&type=chunk) [Item 9B. Other Information](index=59&type=section&id=Item%209B.%20Other%20Information) This item states that there is no other information to report. - This item is not applicable[296](index=296&type=chunk) [Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](index=59&type=section&id=Item%209C.%20Disclosure%20Regarding%20Foreign%20Jurisdictions%20that%20Prevent%20Inspections) This item states that there are no disclosures regarding foreign jurisdictions that prevent inspections. - This item is not applicable[297](index=297&type=chunk) Part III [Item 10. Directors, Executive Officers and Corporate Governance](index=60&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) This section incorporates by reference information regarding directors, executive officers, and corporate governance from the Company's 2024 Definitive Proxy Statement, also noting the Company's Code of Business Conduct and Ethics. - Information on directors, executive officers, and corporate governance is incorporated by reference from the 2024 Proxy Statement[300](index=300&type=chunk) - The Company maintains a Code of Business Conduct and Ethics for all employees, executive officers, and directors, available on its website[300](index=300&type=chunk) [Item 11. Executive Compensation](index=60&type=section&id=Item%2011.%20Executive%20Compensation) This section incorporates by reference information regarding executive compensation from the Company's 2024 Definitive Proxy Statement. - Information on executive compensation is incorporated by reference from the 2024 Proxy Statement[301](index=301&type=chunk) [Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=60&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) This section incorporates by reference information on security ownership of certain beneficial owners and management from the 2024 Proxy Statement, and provides a table detailing securities authorized for issuance under equity compensation plans. - Information concerning security ownership of certain beneficial owners and management is incorporated by reference from the 2024 Proxy Statement[301](index=301&type=chunk) Securities Authorized for Issuance Under Equity Compensation Plans (December 31, 2023) | Plan Category | Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights (a) | Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights ($) | Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (excluding securities reflected in column (a)) | | :------------------------------------------ | :------------------------------------------------------------------------------------------ | :---------------------------------------------------------- | :------------------------------------------------------------------------------------------------------------------------------------------ | | Equity compensation plans approved by security holders | 61,000 | $22.73 | 1,116,555 | | Equity compensation plans not approved by security holders | — | — | — | | **Total equity compensation plans** | **61,000** | **$22.73** | **1,116,555** | [Item 13. Certain Relationships and Related Transactions, and Director Independence](index=60&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) This section incorporates by reference information regarding certain relationships, related transactions, and director independence from the Company's 2024 Definitive Proxy Statement. - Information on certain relationships, related transactions, and director independence is incorporated by reference from the 2024 Proxy Statement[303](index=303&type=chunk) [Item 14. Principal Accounting Fees and Services](index=60&type=section&id=Item%2014.%20Principal%20Accounting%20Fees%20and%20Services) This section incorporates by reference information regarding principal accounting fees and services from the Company's 2024 Definitive Proxy Statement. - Information on principal accounting fees and services is incorporated by reference from the 2024 Proxy Statement[303](index=303&type=chunk) Part IV [Item 15. Exhibits and Financial Statement Schedules](index=61&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This item lists the exhibits and financial statement schedules required to be filed with the report, noting that financial statements are indexed, schedules are omitted, and exhibits are listed in the exhibit index. - Financial statements are listed in the Index to Consolidated Financial Statements[306](index=306&type=chunk) - All financial statement schedules have been omitted as the required information is not applicable, not material, or included in the notes to consolidated financial statements[306](index=306&type=chunk) - The exhibits required to be filed with this Report are listed in the exhibit index[306](index=306&type=chunk) [Item 16. Form 10-K Summary](index=61&type=section&id=Item%2016.%20Form%2010-K%20Summary) This item indicates that there is no Form 10-K Summary provided. - No Form 10-K Summary is provided[305](index=305&type=chunk) [Index to Consolidated Financial Statements](index=62&type=section&id=Index%20to%20Consolidated%20Financial%20Statements) This section provides an index to the consolidated financial statements, including the Report of Independent Registered Public Accounting Firm, Consolidated Balance Sheets, Statements of Income, Comprehensive Income, Changes in Stockholders' Equity, Cash Flows, and Notes. - The index lists the Report of Independent Registered Public Accounting Firm, Consolidated Balance Sheets, Consolidated Statements of Income, Consolidated Statements of Comprehensive Income, Consolidated Statements of Changes in Stockholders' Equity, Consolidated Statements of Cash Flows, and Notes to Consolidated Financial Statements[308](index=308&type=chunk) [Report of Independent Registered Public Accounting Firm](index=63&type=section&id=Report%20of%20Independent%20Registered%20Public%20Accounting%20Firm) Crowe LLP issued an unqualified opinion on Hanmi Financial Corporation's consolidated financial statements and internal control over financial reporting, highlighting the Allowance for Credit Losses on Loans (PD/LGD Model) as a critical audit matter. - Crowe LLP issued an unqualified opinion on the Company's consolidated financial statements for the three-year period ended December 31, 2023, and on the effectiveness of its internal control over financial reporting as of December 31, 2023[311](index=311&type=chunk) - The Allowance for Credit Losses on Loans (Probability of Default / Loss Given Default Model) was identified as a critical audit matter due to the challenging, subjective, and complex judgments involved in its application and evaluation[318](index=318&type=chunk)[320](index=320&type=chunk) - Audit procedures for the critical audit matter included testing controls over assumptions, evaluating management's methodology and conceptual soundness of the PD/LGD model (with valuation specialists), and assessing the reasonableness of judgments over proxy loan information and economic forecasts[321](index=321&type=chunk) [Consolidated Balance Sheets as of December 31, 2023 and 2022](index=66&type=section&id=Consolidated%20Balance%20Sheets%20as%20of%20December%2031%2C%202023%20and%202022) The consolidated balance sheets present the financial position of Hanmi Financial Corporation and Subsidiaries as of December 31, 2023 and 2022, showing increases in total assets, liabilities, and stockholders' equity. Consolidated Balance Sheet Highlights (December 31, 2023 vs 2022) | Asset/Liability/Equity Category | 12/31/2023 ($ thousands) | 12/31/2022 ($ thousands) | Change ($ thousands) | Change (%) | | :------------------------------ | :----------------------- | :----------------------- | :------------------- | :--------- | | Cash and due from banks | 302,324 | 352,421 | (50,097) | (14.2) | | Securities available for sale | 865,739 | 853,838 | 11,901 | 1.4 | | Loans receivable, net | 6,112,972 | 5,895,610 | 217,362 | 3.7 | | Total Assets | 7,570,341 | 7,378,262 | 192,079 | 2.6 | | Noninterest-bearing deposits | 2,003,596 | 2,539,602 | (536,006) | (21.1) | | Interest-bearing deposits | 4,276,978 | 3,628,470 | 648,508 | 17.9 | | Total Deposits | 6,280,574 | 6,168,072 | 112,502 | 1.8 | | Borrowings | 325,000 | 350,000 | (25,000) | (7.1) | | Subordinated debentures | 130,012 | 129,409 | 603 | 0.5 | | Total Liabilities | 6,868,450 | 6,740,747 | 127,703 | 1.9 | | Total Stockholders' Equity | 701,891 | 637,515 | 64,376 | 10.1 | - Accumulated other comprehensive loss improved to **$(71.9) million** at December 31, 2023, from **$(89.0) million** in 2022, net of tax benefit[324](index=324&type=chunk) [Consolidated Statements of Income for the Years Ended December 31, 2023, 2022 and 2021](index=68&type=section&id=Consolidated%20Statements%20of%20Income%20for%20the%20Years%20Ended%20December%2031%2C%202023%2C%202022%20and%202021) The consolidated statements of income show that net income decreased to $80.0 million in 2023 from $101.4 million in 2022, primarily due to a significant increase in interest expense and credit loss expense. Consolidated Statements of Income Highlights (2021-2023) | Income/Expense Category | 2023 ($ thousands) | 2022 ($ thousands) | 2021 ($ thousands) | | :-------------------------------- | :----------------- | :----------------- | :----------------- | | Total interest and dividend income | 369,328 | 273,813 | 216,675 | | Total interest expense | 148,057 | 36,166 | 21,625 | | Net interest income before credit loss expense | 221,271 | 237,647 | 195,050 | | Credit loss expense (recovery) | 4,342 | 836 | (24,403) | | Total noninterest income | 34,179 | 34,200 | 40,496 | | Total noninterest expense | 136,527 | 130,284 | 124,455 | | Income before tax | 114,581 | 140,727 | 135,494 | | Income tax expense | 34,540 | 39,333 | 36,817 | | **Net Income** | **80,041** | **101,394** | **98,677** | | Diluted earnings per share | $2.62 | $3.32 | $3.22 | - Net interest income before credit loss expense decreased by **$16.4 million (6.9%)** in 2023, while total interest expense increased significantly by **$111.9 million (309.4%)**[326](index=326&type=chunk) - Credit loss expense increased to **$4.3 million** in 2023 from **$0.8 million** in 2022, contrasting with a recovery of **$24.4 million** in 2021[326](index=326&type=chunk) [Consolidated Statements of Comprehensive Income for the Years Ended December 31, 2023, 2022 and 2021](index=69&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income%20for%20the%20Years%20Ended%20December%2031%2C%202023%2C%202022%20and%202021) The consolidated statements of comprehensive income show that total comprehensive income increased significantly to $97.1 million in 2023 from $20.9 million in 2022, primarily driven by a positive shift in other comprehensive income. Consolidated Statements of Comprehensive Income Highlights (2021-2023) | Metric | 2023 ($ thousands) | 2022 ($ thousands) | 2021 ($ thousands) | | :-------------------------------------- | :----------------- | :----------------- | :----------------- | | Net income | 80,041 | 101,394 | 98,677 | | Other comprehensive income (loss), net of tax | 17,057 | (80,542) | (11,519) | | **Total comprehensive income** | **97,098** | **20,852** | **87,158** | - Other comprehensive income (loss), net of tax, showed a gain of **$17.1 million** in 2023, a significant improvement from a loss of **$80.5 million** in 2022, primarily due to unrealized holding gains on available-for-sale securities[328](index=328&type=chunk) - In 2023, there was a **$1.9 million** reclassification from accumulated other comprehensive income to net loss on sales of securities[462](index=462&type=chunk) [Consolidated Statements of Changes in Stockholders' Equity for the Years Ended December 31, 2023, 2022 and 2021](index=70&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Stockholders%27%20Equity%20for%20the%20Years%20Ended%20December%2031%2C%202023%2C%202022%20and%202021) The consolidated statements of changes in stockholders' equity show an increase to $701.9 million at December 31, 2023, driven by net income and positive changes in unrealized gains on available-for-sale securities, partially offset by dividends and share repurchases. Changes in Stockholders' Equity (2021-2023) | Metric | 12/31/2023 ($ thousands) | 12/31/2022 ($ thousands) | 12/31/2021 ($ thousands) | | :-------------------------------------- | :----------------------- | :----------------------- | :----------------------- | | Balance at beginning of period | 637,515 | 643,417 | 577,044 | | Net income | 80,041 | 101,394 | 98,677 | | Change in unrealized gain (loss) on securities available for sale, net of income taxes | 16,839 | (80,542) | (11,519) | | Cash dividends paid | (30,535) | (28,636) | (16,514) | | Repurchase of common stock | (4,084) | — | (6,135) | | **Balance at end of period** | **701,891** | **637,515** | **643,417** | - Total stockholders' equity increased by **$64.4 million** in 2023, primarily due to net income and a positive change in unrealized gains on available-for-sale securities, partially offset by dividends and share repurchases[331](index=331&type=chunk) [Consolidated Statements of Cash Flows for the Years Ended December 31, 2023, 2022 and 2021](index=71&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows%20for%20the%20Years%20Ended%20December%2031%2C%202023%2C%202022%20and%202021) The consolidated statements of cash flows show that net cash provided by operating activities decreased to $107.8 million in 2023, while net cash used in investing activities decreased significantly, and net cash provided by financing activities also decreased substantially. Consolidated Statements of Cash Flows Highlights (2021-2023) | Cash Flow Category | 2023 ($ thousands) | 2022 ($ thousands) | 2021 ($ thousands) | | :---------------------------------- | :----------------- | :----------------- | :----------------- | | Net cash provided by operating activities | 107,799 | 147,308 | 93,729 | | Net cash used in investing activities | (209,994) | (881,506) | (447,039) | | Net cash provided by financing activities | 52,098 | 477,654 | 570,426 | | Net increase (decrease) in cash and due from banks | (50,097) | (256,544) | 217,116 | | Cash and due from banks at end of period | 302,324 | 352,421 | 608,965 | - Net cash provided by operating activities decreased in 2023, while net cash used in investing activities decreased significantly, primarily due to lower purchases of securities and a smaller change in loans receivable[333](index=333&type=chunk) - Net cash provided by financing activities decreased substantially in 2023, mainly due to a smaller change in deposits and a decrease in borrowings compared to the prior year[333](index=333&type=chunk) [Notes to Consolidated Financial Statements](index=73&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The Notes to Consolidated Financial Statements provide detailed information on the accounting policies, financial instruments, and specific accounts of Hanmi Financial Corporation, covering various balance sheet and income statement items, regulatory matters, and subsequent events. [Note 1 — Summary of Significant Accounting Policies](index=73&type=section&id=Note%201%20%E2%80%94%20Summary%20of%20Significant%20Accounting%20Policies) This note outlines the significant accounting policies of Hanmi Financial Corporation and its subsidiaries, including the basis of presentation, principles of consolidation, use of estimates, and detailed accounting for various financial instruments and operations. - Hanmi Financial Corporation is the holding company for Hanmi Bank, a California state-chartered financial institution whose deposits are insured by the FDIC[335](index=335&type=chunk)[336](index=336&type=chunk) - The Bank's primary operations involve traditional banking activities, including deposit acceptance, loan origination, and securities investment, serving Korean-American and other ethnic communities[337](index=337&type=chunk) - Securities are classified as 'available for sale' and reported at fair value, with unrealized gains and losses recognized in accumulated other comprehensive income[344](index=344&type=chunk) - The allowance for credit losses is estimated using DCF, PD/LGD, or WARM methods, considering historical losses, current conditions, and reasonable and supportable economic forecasts (e.g., Moody's projections, national unemployment rate)[351](index=351&type=chunk)[352](index=352&type=chunk) - ASU 2022-02 (Troubled Debt Restructurings and Vintage Disclosures) and ASU 2020-04 (Reference Rate Reform) were adopted in 2023 but did not have a material effect on the Company's operating results or financial condition[384](index=384&type=chunk)[385](index=385&type=chunk)[389](index=389&type=chunk) [Note 2 — Securities](index=83&type=section&id=Note%202%20%E2%80%94%20Securities) This note provides a summary of the Company's securities available for sale, totaling $865.7 million in fair value at December 31, 2023, with a net unrealized loss of $102.2 million, diversified across U.S. Treasury, government agency, and municipal bonds. Securities Available for Sale (December 31, 2023) | Security Type | Amortized Cost ($ thousands) | Gross Unrealized Gain ($ thousands) | Gross Unrealized Loss ($ thousands) | Estimated Fair Value ($ thousands) | | :--------------

l Hanmi Financial Corporation Los Angeles New York/ New Jersey Virginia Chicago Dallas Houston San Francisco San Diego Forward-Looking Statements Forward-looking statements are based upon the good faith beliefs and expectations of management as of this date only and are further subject to additional risks and uncertainties, including, but not limited to, the risk factors set forth in our earnings release dated January 23, 2024, including the section titled "Forward Looking Statements and the Company's most ...

Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period Ended September 30, 2023 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 UNITED STATES SECURITIES AND EXCHANGE COMMISSION For the Transition Period From To Commission File Number: 000-30421 HANMI FINANCIAL CORPORATION (Exact Name of Registrant as Specified in its Charter) (State or Other Jurisdiction of (I.R.S. Emplo ...

Hanmi Financial Corporation (NASDAQ:HAFC) Q3 2023 Earnings Conference Call October 24, 2023 5:00 PM ET Company Participants Larry Clark - Investor Relations Bonnie Lee - President and Chief Executive Officer Anthony Kim - Chief Banking Officer Ron Santarosa - Chief Financial Officer Conference Call Participants Matthew Clark - Piper Sandler Kelly Motta - KBW Operator Ladies and gentlemen, welcome to the Hanmi Financial Corporation's Third Quarter 2023 Conference Call. As a reminder, today's call is being re ...

Los Angeles New York/ New Jersey San Francisco San Diego October 24, 2023 Hanmi Financial Corporation (the "Company") cautions investors that any statements contained herein that are not historical facts are forward-looking statements within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, including, but not limited to, those statements regarding operating and financial performance, financial position and liquidity, business strategies, regulatory, economi ...

[Part I – Financial Information](index=3&type=section&id=Part%20I%20%E2%80%93%20Financial%20Information) [Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) The company's financial position remained stable with slight asset decrease, while net income declined in Q2 2023 due to higher interest expense, yet capital ratios stayed strong [Consolidated Balance Sheets](index=3&type=section&id=Consolidated%20Balance%20Sheets) Total assets slightly decreased to **$7.34 billion** at June 30, 2023, primarily due to reduced borrowings, while stockholders' equity increased Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2023 (Unaudited) (in thousands) | December 31, 2022 (in thousands) | | :--- | :--- | :--- | | **Total Assets** | **$7,344,924** | **$7,378,262** | | Cash and due from banks | $344,907 | $352,421 | | Securities available for sale | $836,650 | $853,838 | | Loans receivable, net | $5,894,147 | $5,895,610 | | **Total Liabilities** | **$6,676,364** | **$6,740,747** | | Total deposits | $6,315,768 | $6,168,072 | | Borrowings | $125,000 | $350,000 | | **Total Stockholders' Equity** | **$668,560** | **$637,515** | [Consolidated Statements of Income](index=4&type=section&id=Consolidated%20Statements%20of%20Income) Net income for Q2 2023 decreased to **$20.6 million** due to a significant rise in interest expense, impacting net interest income Key Income Statement Data (in thousands, except per share data) | Metric | Q2 2023 (in thousands) | Q2 2022 (in thousands) | Six Months 2023 (in thousands) | Six Months 2022 (in thousands) | | :--- | :--- | :--- | :--- | :--- | | Net Interest Income | $55,422 | $59,044 | $113,276 | $110,000 | | Credit Loss Expense (Recovery) | $(77) | $1,596 | $2,056 | $220 | | Noninterest Income | $7,935 | $9,310 | $16,271 | $17,829 | | Noninterest Expense | $34,280 | $31,475 | $67,072 | $63,167 | | **Net Income** | **$20,620** | **$25,050** | **$42,612** | **$45,745** | | **Diluted EPS ($)** | **$0.67** | **$0.82** | **$1.39** | **$1.50** | [Notes to Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Notes provide detailed accounting policies, portfolio breakdowns, and credit quality, confirming the company's 'well capitalized' status despite increased nonperforming loans [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=41&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q2 2023 net income decline due to compressed net interest margin, stable loan portfolio, increased nonperforming loans, and sustained strong liquidity and capital - Net income for Q2 2023 was **$20.6 million**, or **$0.67 per diluted share**, a decrease from **$25.1 million**, or **$0.82 per diluted share**, in Q2 2022. The decline was primarily driven by a **$3.6 million** decrease in net interest income and a **$2.8 million** increase in noninterest expense[148](index=148&type=chunk) - For the six months ended June 30, 2023, net income was **$42.6 million**, or **$1.39 per diluted share**, compared to **$45.7 million**, or **$1.50 per diluted share**, for the same period in 2022. This decrease was mainly due to higher noninterest expense, increased credit loss expense, and lower noninterest income, partially offset by higher net interest income[149](index=149&type=chunk) [Results of Operations](index=42&type=section&id=Results%20of%20Operations) Q2 2023 net interest income declined to **$55.4 million** due to surging interest expense, compressing net interest margin, while noninterest income and expense also saw notable changes Q2 2023 vs Q2 2022 Change in Net Interest Income (in thousands) | Component | Change due to Volume (in thousands) | Change due to Rate (in thousands) | Total Change (in thousands) | | :--- | :--- | :--- | :--- | | Total interest and dividend income | $4,138 | $23,412 | $27,550 | | Total interest expense | $1,234 | $29,938 | $31,172 | | **Change in net interest income** | **$2,904** | **$(6,526)** | **$(3,622)** | - Noninterest income for Q2 2023 decreased by **$1.4 million** to **$7.9 million**, primarily due to a **$1.9 million** net loss on securities sales and a **$1.6 million** decrease in gain on SBA loan sales, partially offset by a **$1.9 million** legal settlement[176](index=176&type=chunk) - Noninterest expense for Q2 2023 increased by **$2.8 million** to **$34.3 million**, mainly driven by a **$1.6 million** increase in salaries and employee benefits due to merit increases and lower capitalized loan origination costs[179](index=179&type=chunk) [Financial Condition](index=50&type=section&id=Financial%20Condition) The company's financial condition remained stable with **$7.34 billion** in total assets, flat loan portfolio, increased deposits, and significantly reduced borrowings - Loans receivable remained stable at **$5.89 billion** as of June 30, 2023. New loan production of **$562.9 million** was offset by **$296.5 million** in loan sales and payoffs and **$269.1 million** in amortization and other reductions[186](index=186&type=chunk) - Total deposits increased by **$147.7 million (2.4%)** to **$6.32 billion** at June 30, 2023, from year-end 2022. This was driven by a **$475.7 million** increase in time deposits, offset by a **$328.0 million** decrease in other deposit types[217](index=217&type=chunk) - As of June 30, 2023, the aggregate amount of uninsured deposits (over **$250,000**) was **$2.58 billion**, down from **$2.65 billion** at December 31, 2022[218](index=218&type=chunk) [Loan Quality](index=52&type=section&id=Loan%20Quality) Credit quality deteriorated with nonperforming loans increasing to **$22.2 million**, primarily from one commercial loan, while criticized loans decreased and the allowance for credit losses remained stable - Nonperforming loans increased to **$22.2 million** at June 30, 2023, from **$9.8 million** at December 31, 2022. The increase primarily reflects the addition of a **$10.0 million** commercial and industrial loan in the health-care industry[200](index=200&type=chunk) Criticized Loan Activity (in thousands) | Loan Category | Balance at Jan 1, 2023 (in thousands) | Additions (in thousands) | Reductions (in thousands) | Balance at June 30, 2023 (in thousands) | | :--- | :--- | :--- | :--- | :--- | | Special Mention | $79,013 | $26,699 | $(61,079) | $44,633 | | Classified | $46,192 | $16,850 | $(24,202) | $38,840 | Allowance for Credit Losses Ratios | Ratio | June 30, 2023 | December 31, 2022 | | :--- | :--- | :--- | | Allowance for credit losses to loans receivable | 1.19 % | 1.20 % | | Allowance for credit losses to nonaccrual loans | 320.23 % | 726.42 % | [Capital Resources and Liquidity](index=60&type=section&id=Capital%20Resources%20and%20Liquidity) The company and Hanmi Bank remain 'well capitalized' with strong capital ratios and robust liquidity, supported by deposits and significant borrowing capacity Capital Ratios as of June 30, 2023 | Ratio | Hanmi Financial (Actual) (%) | Hanmi Bank (Actual) (%) | Minimum to be "Well Capitalized" (Bank) (%) | | :--- | :--- | :--- | :--- | | Total capital (to risk-weighted assets) | 15.11 % | 14.45 % | 10.00 % | | Tier 1 capital (to risk-weighted assets) | 12.25 % | 13.39 % | 8.00 % | | Common equity Tier 1 capital | 11.90 % | 13.39 % | 6.50 % | | Tier 1 capital (to average assets) | 10.22 % | 11.21 % | 5.00 % | - The Board of Directors declared a quarterly cash dividend of **$0.25 per share** for Q2 2023, consistent with recent quarters[229](index=229&type=chunk) - As of June 30, 2023, the Bank had remaining available borrowing capacity of **$1.29 billion** from the FHLB and **$25.6 million** from the Federal Reserve Discount Window and BTFP[128](index=128&type=chunk)[131](index=131&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=58&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risk is interest rate risk, with simulations showing NII and EVE sensitivity to hypothetical rate changes, indicating some liability sensitivity Interest Rate Sensitivity Analysis (as of June 30, 2023) | Change in Interest Rates (bps) | % Change in Net Interest Income (1-12 Months) | % Change in Economic Value of Equity (EVE) | | :--- | :--- | :--- | | +300 | 3.96 % | (6.31 %) | | +200 | 2.22 % | (4.48 %) | | +100 | 1.49 % | (0.84 %) | | -100 | (2.28 %) | (1.87 %) | | -200 | (5.35 %) | (7.44 %) | | -300 | (9.02 %) | (15.11 %) | [Controls and Procedures](index=58&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of June 30, 2023, with no material changes to internal control over financial reporting - The Corporation's Chief Executive Officer and Chief Financial Officer concluded that the disclosure controls and procedures were **effective** as of June 30, 2023[239](index=239&type=chunk) - There were no changes in the Corporation's internal control over financial reporting during the quarter ended June 30, 2023 that materially affected, or are reasonably likely to materially affect, the Corporation's internal control over financial reporting[240](index=240&type=chunk) [Part II – Other Information](index=59&type=section&id=Part%20II%20%E2%80%93%20Other%20Information) [Legal Proceedings](index=59&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in routine litigation, which management believes will not materially impact its financial condition or results - In the opinion of management, the resolution of any litigation arising in the ordinary course of business would not have a **material adverse impact** on the financial condition, results of operations, or liquidity of Hanmi Financial or its subsidiaries[243](index=243&type=chunk) [Risk Factors](index=59&type=section&id=Item%201A.%20Risk%20Factors) No material changes to the company's risk factors have occurred since previous disclosures in the 2022 Form 10-K and Q1 2023 Form 10-Q - There have been **no material changes** in risk factors applicable to the Corporation from those described in the 2022 Form 10-K and the Q1 2023 Form 10-Q[244](index=244&type=chunk) [Issuer Purchases of Equity Securities](index=59&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%2C%20Use%20of%20Proceeds%2C%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company repurchased **100,000 shares** of common stock in Q2 2023 at an average price of **$14.44**, with **559,972 shares** remaining for future repurchase Common Stock Repurchases in Q2 2023 | Period | Total Shares Purchased | Average Price Paid Per Share ($) | | :--- | :--- | :--- | | May 1 - May 31, 2023 | 100,000 | $14.44 | | **Total Q2 2023** | **100,000** | **$14.44** | - As of June 30, 2023, **559,972 shares** remained available for future purchases under the company's stock repurchase program announced in January 2019[245](index=245&type=chunk)