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Hanmi Financial (HAFC) - 2024 Q4 - Annual Report
HAFCHanmi Financial (HAFC)2025-02-28 18:37
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Capital Ratios and Requirements - As of December 31, 2024, the Company's total risk-based capital ratio was 15.24%, exceeding the minimum requirements for being deemed "well-capitalized" [92] - The Bank's Tier 1 risk-based capital ratio was 13.36%, and its Common Equity Tier 1 capital ratio was also 13.36%, both surpassing regulatory requirements [92] - The Bank's capital conservation buffer was 6.43% as of December 31, 2024, indicating a strong capital position [92] - The Company and the Bank believe they met all applicable capital requirements as of December 31, 2024, but may face additional regulatory capital expectations [92] - The Bank is required to maintain a Common Equity Tier 1 capital ratio of at least 6.50% to be considered well-capitalized under prompt corrective action standards [104] Regulatory and Compliance Issues - The FDIC insures customer deposits up to 250,000perdepositor,whichiscrucialformaintainingdepositorconfidence[100]−EffectiveJanuary1,2023,FDICassessmentratesforinstitutionsoftheBank′ssizerangedfrom2.5to32basispoints,impactingearnings[101]−TheFDICplanstoimplementaspecialassessmenteffectiveApril1,2024,torecoverlossesfromprotectinguninsureddepositors[102]−TheCompany′sabilitytopaydividendsissubjecttovariousfederalandstaterestrictions,impactingitsfinancialflexibility[105]−FuturecashdividendsfromtheBankwilldependonmanagement′sassessmentofcapitalrequirementsandregulatoryrestrictions[106]−ThefinalruleforCRAregulationswillapplytobankswithassetsofatleast250,000 per depositor, which is crucial for maintaining depositor confidence [100] - Effective January 1, 2023, FDIC assessment rates for institutions of the Bank's size ranged from 2.5 to 32 basis points, impacting earnings [101] - The FDIC plans to implement a special assessment effective April 1, 2024, to recover losses from protecting uninsured depositors [102] - The Company's ability to pay dividends is subject to various federal and state restrictions, impacting its financial flexibility [105] - Future cash dividends from the Bank will depend on management's assessment of capital requirements and regulatory restrictions [106] - The final rule for CRA regulations will apply to banks with assets of at least 2 billion, with the majority of provisions effective from January 1, 2026 [111] - The SEC's clawback policy requires companies to recover erroneously awarded incentive-based compensation due to accounting restatements [119] - The Bank is subject to examination by the CFPB due to its asset size being below 10billion[112]CommunityandPerformanceAssessment−TheBankwasrated"Satisfactory"inmeetingcommunitycreditneedsundertheCRAatitsmostrecentexamination[110]−TheBank′sperformanceisinfluencedbytheFederalReserve′smonetarypolicies,whichaffectinterestratesonloansanddeposits[114]FinancialPositionandInvestments−AsofDecember31,2024,thetotalborrowingcapacityavailablebasedonpledgedcollateralwas10 billion [112] Community and Performance Assessment - The Bank was rated "Satisfactory" in meeting community credit needs under the CRA at its most recent examination [110] - The Bank's performance is influenced by the Federal Reserve's monetary policies, which affect interest rates on loans and deposits [114] Financial Position and Investments - As of December 31, 2024, the total borrowing capacity available based on pledged collateral was 1.69 billion, compared to 1.54billionasofDecember31,2023[113]−TheBank′sinvestmentinFHLBSFcapitalstockwas1.54 billion as of December 31, 2023 [113] - The Bank's investment in FHLBSF capital stock was 16.4 million as of December 31, 2024 [113] - The Bank's compliance with the FHLBSF's stock ownership requirement was confirmed as of December 31, 2024 [113] - The Company was in compliance with California board diversity requirements as of December 31, 2024 [117] Brokered Deposits - The FDIC's proposed rule on brokered deposits aims to significantly overhaul the 2020 regulations [120]