What the changes say
- AI and machine-learning risks are newly disclosed, including third-party credit-scoring and fraud-detection models, data security, bias, and fair-lending concerns.
- Federal Reserve monetary policy and Congressional tax and spending decisions are newly identified as affecting results and customers.
- Interest-rate risk now emphasizes shorter liability maturities, fixed-rate periods, and earnings volatility; vendor and fraud risks were dropped.
- The natural-catastrophe disclosure now specifically includes Southern California wildfires, while financial-system contagion risk adds rumors and market-wide liquidity problems.
What changed since the prior 10-K
New
- NewRisk Related to Laws and Regulation and Their Enforcement
monetary policies and regulations of the FRB have had a significant effect on the overall economy and the operating results of financial institutions in the past and are expected to continue to do so in the future
Federal Reserve monetary policy and Congressional tax and spending decisions could affect HAFC, financial institutions, and customers’ businesses.
- NewRisks Related to Our Operations
Our reliance on, and integration of, artificial intelligence ("AI") and machine learning ("ML") technologies expose us to various risks, including operational, data, regulatory, and reputational risks, which could materially affect our business and financial results
AI and ML errors, bias, security breaches, evolving regulation, and third-party models could cause losses, compliance problems, penalties, or customer harm.
Dropped
- DroppedRisks Related to Our Operations
were to occur. Failures of certain vendors to provide contracted services could adversely affect our ability to deliver products and services to our customers and cause us to incur significant expense
Reworded
- 45% rewrittenRisks Related to Market Interest Rates
in a rising interest rate environment, more interest-bearing liabilities than interest-earning assets re-price or mature, which, in either case, would be expected to compress our interest rate spread and have a negative effect on our profitability
Interest-rate risk now focuses on shorter liability maturities, fixed-rate periods, and earnings volatility, removing the prior discussion of rapid increases and loan-rate caps.
- 40% rewrittenRisks Related to Local and International Economic and Political Conditions
Collateral for loans made by us, especially real estate, may decline in value
No substantive change; the disclosure still covers economic weakness in California, Illinois, Texas, Georgia, and New York reducing collateral values.
- 31% rewrittenRisks Related to Our Operations
Our ability to acquire deposits or borrow could also be impaired by factors that are not specific to us, such as a severe disruption of the financial markets or negative views and expectations about the prospects for the financial services industry as a whole
Adds that defaults, rumors, or questions about financial institutions could trigger market-wide liquidity problems and losses or defaults.
- 22% rewrittenRisks Related to Tax Matters
Other Risks Related to Our Business
Replaces the dated January 2025 Los Angeles County wildfire example with a broader reference to Southern California wildfires.
- 21% rewrittenRisk Related to Laws and Regulation and Their Enforcement
Changes in Federal Reserve and other governmental policies, fiscal policy, and our regulatory environment generally are beyond our control, and we are unable to predict what changes may occur or the manner in which any future changes may affect our business, financial condition and results of operations
No substantive change; the disclosure still covers Dodd-Frank restrictions, reporting costs, derivatives, hedging, and changing consumer-protection rules.
All 9 risk factors
Headings as the filing states them, in filing order.
Risks Related to Local and International Economic and Political Conditions
- 01Collateral for loans made by us, especially real estate, may decline in value40% rewritten
Risk Related to Laws and Regulation and Their Enforcement
- 02monetary policies and regulations of the FRB have had a significant effect on the overall economy and the operating results of financial institutions in the past and are expected to continue to do so in the futurenew
- 03Changes in Federal Reserve and other governmental policies, fiscal policy, and our regulatory environment generally are beyond our control, and we are unable to predict what changes may occur or the manner in which any future changes may affect our business, financial condition and results of operations21% rewritten
Risks Related to Our Operations
- 04Our ability to acquire deposits or borrow could also be impaired by factors that are not specific to us, such as a severe disruption of the financial markets or negative views and expectations about the prospects for the financial services industry as a whole31% rewritten
- 05Our reliance on, and integration of, artificial intelligence ("AI") and machine learning ("ML") technologies expose us to various risks, including operational, data, regulatory, and reputational risks, which could materially affect our business and financial resultsnew
Risks Related to Market Interest Rates
- 06in a declining interest rate environment, more interest-earning assets than interest-bearing liabilities re-price or mature, or
- 07in a rising interest rate environment, more interest-bearing liabilities than interest-earning assets re-price or mature, which, in either case, would be expected to compress our interest rate spread and have a negative effect on our profitability45% rewritten
Risks Related to Tax Matters
- 08Other Risks Related to Our Business22% rewritten
Risks Relating to Ownership of Our Common Stock
- 09domestic and international political and economic factors unrelated to our performance
Other Hanmi Financial 10-Ks
- 2025 10-K risk factors
8 risks. Concentration of real estate collateral across California, Illinois, Texas, Georgia, and New York drives credit risk. Sensitivity to net interest income compression and regional natural disasters, like Southern California earthquakes, dominate.
Filed Feb 28, 2025
About this page
Item 1A of the 10-K on EDGAR was split into its risk factors and, where the company's previous 10-K is on file, each heading was matched to last year's and the text compared word for word. The headings are the filing's own. The one-line readings and the overview were written by a language model from the text of the new, dropped, and rewritten risks; they refer to risks by position and cannot misquote a heading.