HAFC » Topics » Securities

These excerpts taken from the HAFC 10-K filed Feb 29, 2008.
Securities
 
Securities are classified into three categories and accounted for as follows:
 
1.  Securities that we have the positive intent and ability to hold to maturity are classified as “held-to-maturity” and reported at amortized cost;
 
2.  Securities that are bought and held principally for the purpose of selling them in the near future are classified as “trading securities” and reported at fair value. Unrealized gains and losses are recognized in earnings; and
 
3.  Securities not classified as held-to-maturity or trading securities are classified as “available for sale” and reported at fair value. Unrealized gains and losses are reported as a separate component of stockholders’ equity as accumulated other comprehensive income (loss), net of income taxes.
 
Accreted discounts and amortized premiums on investment securities are included in interest income using the effective interest method


54


 

 
Hanmi Financial Corporation and Subsidiaries
 
Notes to Consolidated Financial Statements
December 31, 2007, 2006 and 2005 
(Continued)
 
Note 1 — Summary of Significant Accounting Policies (Continued)
 
over the remaining period to the call date or contractual maturity and, in the case of mortgage-backed securities and securities with call features, adjusted for anticipated prepayments. Unrealized and realized gains or losses related to holding or selling of securities are calculated using the specific-identification method.
 
We assess, at each reporting date, whether there is an “other-than-temporary” impairment to our investment securities. We examine all individual securities that are in an unrealized loss position at each reporting date for “other-than-temporary” impairment. Specific investment level factors we examine to assess impairment include the severity and duration of the loss, an analysis of the issuers of the securities and if there has been any cause for default on the securities and any change in the rating of the securities by the various rating agencies. Additionally, we reexamine the financial resources and overall ability the Bank has and the intent management has to hold the securities until their fair values recover. To the extent there is an impairment of value deemed “other than temporary” for a security held to maturity or available for sale, a loss is recognized in earnings and a new cost basis established for the security.
 
We also have a minority investment of 4.99 percent in a non-publicly traded company, Pacific International Bank. The investment is carried at cost and is included in other assets on the Consolidated Balance Sheets. As of December 31, 2007 and 2006, its carrying value was $511,000. We monitor the investment for impairment and make appropriate reductions in carrying value when necessary.
 
Securities


 





Securities are classified into three categories and accounted
for as follows:


 
















1. 
Securities that we have the positive intent and ability to hold
to maturity are classified as “held-to-maturity” and
reported at amortized cost;


 



























2. 
Securities that are bought and held principally for the purpose
of selling them in the near future are classified as
“trading securities” and reported at fair value.
Unrealized gains and losses are recognized in earnings; and
 
3. 
Securities not classified as held-to-maturity or trading
securities are classified as “available for sale” and
reported at fair value. Unrealized gains and losses are reported
as a separate component of stockholders’ equity as
accumulated other comprehensive income (loss), net of income
taxes.


 





Accreted discounts and amortized premiums on investment
securities are included in interest income using the effective
interest method





54





 





 




Hanmi
Financial Corporation and Subsidiaries



 




Notes to
Consolidated Financial Statements

December 31, 2007, 2006 and
2005 
(Continued)

 















Note 1 —


Summary of
Significant Accounting
Policies (Continued)


 



over the remaining period to the call date or contractual
maturity and, in the case of mortgage-backed securities and
securities with call features, adjusted for anticipated
prepayments. Unrealized and realized gains or losses related to
holding or selling of securities are calculated using the
specific-identification method.


 





We assess, at each reporting date, whether there is an
“other-than-temporary” impairment to our investment
securities. We examine all individual securities that are in an
unrealized loss position at each reporting date for
“other-than-temporary” impairment. Specific investment
level factors we examine to assess impairment include the
severity and duration of the loss, an analysis of the issuers of
the securities and if there has been any cause for default on
the securities and any change in the rating of the securities by
the various rating agencies. Additionally, we reexamine the
financial resources and overall ability the Bank has and the
intent management has to hold the securities until their fair
values recover. To the extent there is an impairment of value
deemed “other than temporary” for a security held to
maturity or available for sale, a loss is recognized in earnings
and a new cost basis established for the security.


 





We also have a minority investment of 4.99 percent in a
non-publicly traded company, Pacific International Bank. The
investment is carried at cost and is included in other assets on
the Consolidated Balance Sheets. As of December 31, 2007
and 2006, its carrying value was $511,000. We monitor the
investment for impairment and make appropriate reductions in
carrying value when necessary.


 






This excerpt taken from the HAFC 10-K filed Mar 1, 2007.
Securities
 
Securities are classified into three categories and accounted for as follows:
 
1. Securities that we have the positive intent and ability to hold to maturity are classified as “held-to-maturity” and reported at amortized cost;
 
2. Securities that are bought and held principally for the purpose of selling them in the near future are classified as “trading securities” and reported at fair value. Unrealized gains and losses are recognized in earnings; and
 
3. Securities not classified as held-to-maturity or trading securities are classified as “available for sale” and reported at fair value. Unrealized gains and losses are reported as a separate component of shareholders’ equity as Accumulated Other Comprehensive Income, Net of Income Taxes.
 
Accreted discounts and amortized premiums on investment securities are included in interest income using the effective interest method over the remaining period to the call date or contractual maturity and, in the case of mortgage-backed securities and securities with call features, adjusted for anticipated prepayments. Unrealized and realized gains or losses related to holding or selling of securities are calculated using the specific-identification method.
 
We assess, at each reporting date, whether there is an “other-than-temporary” impairment to our investment securities. We examine all individual securities that are in an unrealized loss position at each reporting date for “other-than-temporary” impairment. Specific investment level factors we examine to assess impairment include the severity and duration of the loss, an analysis of the issuers of the securities and if there has been any cause for default on the securities and any change in the rating of the securities by the various rating agencies. Additionally, we reexamine the financial resources and overall ability the Bank has and the intent management has to hold the securities until their fair values recover. To the extent there is an impairment of value deemed “other than temporary” for a security held to maturity or available for sale, a loss is recognized in earnings and a new cost basis established for the security.
 
We also have a minority investment of 4.99 percent in a non-publicly traded company, Pacific International Bank. The investment is included in Other Assets on the Consolidated Statements of Financial Condition and is carried at cost. As of December 31, 2006 and 2005, its carrying value was $511,000. We monitor the investment for impairment and make appropriate reductions in carrying value when necessary.
 
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