Form DEF 14A HANMI FINANCIAL CORP For: May 22

Preliminary Proxy Statement

Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

Definitive Proxy Statement

Definitive Additional Materials

Soliciting Material Pursuant to §240.14a-12

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To elect nine (9) directors to serve for terms expiring at the 2020 Annual Meeting of Stockholders and until their successors are elected and qualified;

To provide a non-binding advisory vote to approve the compensation of our Named Executive Officers (“Say-on-Pay” vote);

To ratify the appointment of KPMG LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2019; and

To consider any other business properly brought before the meeting.

Item 1. Election of Directors (page 14)

The Board believes that the nine (9) director nominees possess the necessary qualifications to provide effective oversight of the Company’s business and quality advice and counsel to our management.

“FOR” each

Director Nominee

Item 2. Advisory Vote to Approve Executive Compensation (“Say-on-Pay” Vote) (page 39)

The Company seeks a non-binding advisory vote from its stockholders to approve the compensation of its Named Executive Officers (“NEOs”) as described in the Executive Compensation—Compensation Discussion and Analysis section beginning on page 19. Because your vote is advisory, it will not be binding upon our Board and may not be construed as overruling any decision by our Board. However, the Compensation and Human Resources Committee may, in its sole discretion, take into account the outcome of the vote when considering future executive compensation arrangements.

Item 3. Ratification of Auditors (page 40)

The Audit Committee and the Board believe that the continued retention of KPMG LLP to serve as the independent registered public accounting firm of the Company for the fiscal year ending December 31, 2019 is in the best interests of the Company and its stockholders. As a matter of good corporate governance, stockholders are being asked to ratify the Audit Committee’s selection of the independent registered public accounting firm. If the stockholders do not ratify the selection by a majority vote of the shares present and voting, we will reconsider whether or not to retain KPMG. Even if the selection is ratified, we may, in our discretion, appoint a different independent registered public accounting firm at any time during the year if we determine that such a change would be in our and our stockholders’ best interests.

Why did I receive this Proxy Statement?

You received this Proxy Statement and the enclosed proxy card because we are soliciting your vote at the Annual Meeting. As a stockholder of record of our common stock, you are invited to attend the Annual Meeting, and are entitled and requested to vote on the proposals described in this Proxy Statement. This Proxy Statement summarizes the information you need to know to cast an informed vote at the Annual Meeting. However, you do not need to attend the Annual Meeting to vote your shares. Instead, you may simply complete, sign and return the enclosed proxy card by mail. You may also vote by telephone or Internet.

Who is entitled to vote and how many votes do I have?

All stockholders of our common stock as of the close of business on April 2, 2019, and only those stockholders, will be entitled to vote at the Annual Meeting. You have one vote for each share of our common stock you owned as of the close of business on the record date.

How many shares are eligible to be voted?

As of April 2, 2019, 30,861,097 shares of our common stock were outstanding. Each outstanding share of our common stock will entitle its holder to one vote on each matter to be voted on at the Annual Meeting.

What is the difference between holding shares as a “record” holder and in “street name”?

•

Street Name Holders: If your shares of common stock are held in an account at a brokerage firm, bank, or other similar entity, then you are the beneficial owner of shares held in “street name.” The entity holding your account is considered the record holder for purposes of voting at the Annual Meeting. As the beneficial owner, you have the right to direct this entity on how to vote the shares held in your account. However, as described below, you may not vote these shares in person at the Annual Meeting unless you obtain a legal proxy from the entity that holds your shares giving you the right to vote the shares at the Annual Meeting.

What is a broker non-vote?

Current regulations restrict the ability of your brokerage firm, bank or similar entity to vote your shares in the election of directors and other matters on a discretionary basis. Thus, if you hold your shares in street name and you do not instruct your bank or broker how to vote in the election of directors or for the advisory vote regarding the compensation of our NEOs, no votes will be cast on your behalf. These are referred to as broker non-votes. Your bank or broker does, however, continue to have discretion to vote any shares for which you do not provide instructions on how to vote on the ratification of the appointment of our independent registered public accounting firm (Proposal 3 of this Proxy Statement).

What is the required quorum at the Annual Meeting?

Quorum for the transaction of business at the Annual Meeting requires the presence, in person or by proxy, of the holders of a majority of all shares entitled to vote at a meeting of stockholders. Abstentions and broker non-votes are treated as being present for purposes of establishing a quorum.

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Annual Meeting Proxy Statement 2019

What vote is required to approve each proposal at the Annual Meeting?

Election of Directors. Directors are elected by a majority of votes cast in uncontested elections. In order to be elected to the Board, the votes cast “for” the nominee must exceed the number of votes cast “against” the nominee.

Advisory Vote on the Compensation of our NEOs. Approval, on an advisory basis, of the compensation of our NEOs requires the affirmative vote of a majority of the shares present in person or represented by proxy and entitled to vote.

Ratification of Selection of Auditors. Ratification of the selection of KPMG as our independent registered public accounting firm for the fiscal year ending December 31, 2019 requires the affirmative vote of a majority of the shares present in person or represented by proxy and entitled to vote.

What is the effect of broker non-votes and abstentions?

Abstentions and broker non-votes will be counted for determining a quorum. Your broker, however, will not be entitled to vote without your instruction on Proposals 1 and 2 on the election of directors and the advisory (non-binding) proposal to approve the compensation of our NEOs.

How can I vote my shares?

If you hold your shares of common stock in your own name and not through a broker or another nominee, you may vote your shares of common stock by the following methods, subject to compliance with the applicable cutoff times and deadlines described below:

By Internet

You can vote on the website printed on your proxy card. Internet voting is available 24 hours a day until 11:59 p.m., Pacific Time, on May 21, 2019. If you vote via the Internet, you do not need to return your proxy card.

By Telephone

You can vote by dialing the toll-free number printed on your proxy card. Telephone voting is available 24 hours a day until 11:59 p.m., Pacific Time, on May 21, 2019. If you vote by telephone, you do not need to return your proxy card.

By Mail

You can vote by mail by signing, dating and returning the proxy card in the postage-paid envelope provided to you. Proxy cards sent by mail must be received by May 21, 2019.

In Person

By attending the Annual Meeting and voting in person.

Can I change or revoke my vote after I return my proxy card?

You may revoke a proxy at any time before the vote is taken at the Annual Meeting by advising our Corporate Secretary in writing before the vote at the Annual Meeting is taken, by submitting a properly executed proxy of a later date by mail, telephone or Internet, or by attending the Annual Meeting and voting in person. Any filing with the Corporate Secretary should be addressed to Hanmi Financial Corporation, 3660 Wilshire Boulevard, Penthouse Suite A, Los Angeles, California 90010. Attendance at the Annual Meeting will not by itself constitute revocation of a proxy.

How do I vote in person?

If you plan to attend the Annual Meeting and vote in person, we will give you a ballot form when you arrive. However, if your shares of common stock are held in the name of your broker, bank or other nominee, you must bring a legal proxy from your broker, bank or other nominee to vote your shares of common stock at the Annual Meeting.

How will proxies be solicited?

In addition to soliciting proxies by mail, our officers, directors, and employees, without receiving any additional compensation, may solicit proxies by telephone, fax, in person, or by other means. Arrangements may also be made with brokerage firms and other custodians, nominees, and fiduciaries to forward proxy solicitation materials to the beneficial owners of our common stock held of record by such persons, and we will reimburse such brokerage firms, custodians, nominees, and fiduciaries for reasonable out-of-pocket expenses incurred by them in connection therewith.

Will any other matters be considered at the Annual Meeting?

We are not aware of any matter to be presented at the Annual Meeting other than the proposals discussed in this Proxy Statement. If other matters are properly presented at the Annual Meeting, then the persons named as proxies will have the authority to vote all properly executed proxies in accordance with the direction of our Board, or, if no such direction is given, in accordance with the judgment of the persons holding such proxies on any such matter, including any proposal to adjourn or postpone the Annual Meeting.

Are there any rules regarding admission to the Annual Meeting?

Yes. You are entitled to attend the Annual Meeting only if you were a stockholder as of the record date, or you hold a valid legal proxy naming you to act for one of our stockholders on the record date. Before we admit you to the Annual Meeting, we must be able to confirm:

Your identity by reviewing a valid form of photo identification, such as a driver’s license or passport; and

You were, or are validly acting for, a stockholder of record on the record date by:

Verifying your name and stock ownership against our list of registered stockholders, if you are the record holder of your shares;

Reviewing other evidence of your stock ownership, such as your most recent brokerage or bank statement, if you hold your shares in street name; or

Reviewing a written proxy that shows your name and is signed by the stockholder you are representing, in which case either the stockholder must be a registered stockholder of record or you must have a brokerage or bank statement for that stockholder as described above.

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Annual Meeting Proxy Statement 2019

Is my vote confidential?

Your vote will not be disclosed either within the Company or to third parties, except as necessary to meet applicable legal requirements, to allow for the tabulation of votes and certification of the vote, or to facilitate a successful proxy solicitation.

Where can I find the voting results of the Annual Meeting?

We intend to disclose voting results on a Current Report on Form 8-K to be filed with the U.S. Securities and Exchange Commission (the “SEC”) within four business days after the Annual Meeting.

Joseph K. Rho*

(Chairman)

78

2000

Retired (current and former Chairman of the Boards

of Hanmi and Hanmi Bank)

John J. Ahn*

(Vice Chairman)

54

2014

President of Great American Capital

Partners, LLC

Kiho Choi*

63

2018

Managing Partner of CKP, LLP

Christie K. Chu*

54

2015

President & CEO of CKC Accountancy Corporation

Harry H. Chung*^FE

49

2016

Chief Operations Officer & Chief Financial Officer of

Great American Capital Partners, LLC

Scott R. Diehl*

57

2018

Retired (former Group Head of Global Capital Solutions

of Wells Fargo Capital Finance)

C. G. Kum

64

2013

CEO of Hanmi and Hanmi Bank

Bonita I. Lee

56

2019

President & COO of Hanmi and Hanmi Bank

David L. Rosenblum*^FE    

66

2014

Retired (former Senior Principal of

Deloitte Consulting LLP)

Thomas J. Williams*

56

2016

Retired (former Senior Vice President & Chief Risk

Officer of BofI Federal Bank)

Michael M. Yang*

57

2016

Founder & CEO of Michael Yang Capital

Management, LLC

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Annual Meeting Proxy Statement 2019

Assist the Board in fulfilling its oversight responsibilities for the financial reporting process, the system of internal controls, the audit process, and Hanmi’s process for monitoring compliance with laws and regulations and the code of conduct;

Review the unaudited quarterly and audited annual financial statements;

Review the adequacy of internal control systems and financial reporting procedures with management and the independent auditor;

Review and approve the general scope of the annual audit and the fees charged by the independent registered public accounting firm; and

Review and approve the general scope of the annual internal audit plan and associated fees.

Review and approve the Company’s overall compensation theory, plans, policies and programs as it relates to directors, the Chief Executive Officer and executive officers;

Approve directors overall compensation, policies and programs;

Oversee management development and management succession planning;

Review and approve executive officers separation plan or severance agreements; and

Lead the Board in its annual review of executive management’s performance as it relates to metrics for bonus payouts.

Identify individuals qualified to become directors;

Recommend to the Board nominees for the Board and its committees;

Develop, recommend, and implement a set of corporate governance principles applicable to Hanmi; and

Monitor the process to determine the effectiveness of the Board and its committees.

We believe that yearly elections hold the directors of the Board more accountable to our stockholders.

All of the directors are independent, except for C. G. Kum, our current Chief Executive Officer, and Bonita I. Lee, our current President. The Board has affirmatively determined that the other eight (8) directors nominated for re-election are independent under the SEC and Nasdaq corporate governance rules, as applicable.

We have separated the positions of the Chairman of the Board and Chief Executive Officer in the Company’s Bylaws to ensure the independence of the Chairman. The Chairman focuses on board oversight responsibilities, strategic planning and mentoring company officers. The Chairman also periodically represents the Bank at public functions. The Chief Executive Officer focuses on the development and execution of Company strategies.

We also maintain a Vice Chairman of the Board, who is an independent director exercising all the powers and discharging all of the duties of the Chairman of the Board in such circumstances before a Chairman is appointed or a sitting Chairman becomes absent or disabled. Director John J. Ahn serves as Vice Chairman.

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Annual Meeting Proxy Statement 2019

We believe the Board structure serves the interests of the stockholders by balancing the practicalities of running the Company with the need for director accountability.

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Annual Meeting Proxy Statement 2019

  Name

Fees
Earned
or Paid  in
Cash⁽³⁾

Stock
Awards⁽⁴⁾

Option
Awards⁽⁵⁾

Total

John J. Ahn

$

71,196

$

50,021

$

121,217

Kiho Choi⁽¹⁾

$

43,100

$

50,021

$

93,121

Christie K. Chu

$

70,996

$

50,021

$

121,017

Harry H. Chung

$

73,600

$

50,021

$

123,621

Scott R. Diehl⁽²⁾

$

54,900

$

50,021

$

104,921

Joseph K. Rho

$

130,400

$

50,021

$

180,421

David L. Rosenblum

$

72,096

$

50,021

$

122,117

Thomas J. Williams

$

67,100

$

50,021

$

117,121

Michael M. Yang

$

66,850

$

50,021

$

116,871

Kiho Choi was appointed to the Boards, effective April 2, 2018.

Scott R. Diehl was appointed to the Boards, effective February 28, 2018.

Each director who is not an employee of Hanmi (an outside director) is paid a monthly fee of $3,500 and $1,000 for attendance at Board meetings ($500 for telephonic attendance). In addition, the Chairman of the Board receives an additional $5,500 each month. The Audit Committee Chairperson and the Loan and Credit Policy Committee Chairperson receive an additional $1,000 each month. The chairpersons of the remaining committees receive an additional $833 each month, with the exception of the Asset Liability Management Committee Chairperson receiving an additional $750 each month, and committee members receive an additional $200 each for attending committee meetings ($100 each for telephonic attendance). The figures include fees for both Company and Bank board committees.

On June 28, 2018, the Company granted 1,749 restricted shares of the Company’s common stock to each non-employee director re-elected, vesting over one year from the grant date. The grant date fair value is based on the number of shares granted and the closing price of the Company’s stock on the grant date. The closing price of the Company’s common stock was $28.60. At December 31, 2018, each of the directors had 1,749 restricted shares outstanding.

At December 31, 2018, none of the directors had any stock options outstanding.

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Annual Meeting Proxy Statement 2019

Years of Service

Director Emeritus

Term (months)

Percentage of Cash
Compensation

5 years

6

100%

6-10 years

12

100%

11-20 years

24

100%

21-30 years

36

100%

31+ years

48

100%

John J. Ahn

Director since: 2014

Age: 54

Vice Chairman of

our Board

Board Committees:

NCG, RCP

Experience

Mr. Ahn brings more than 30 years of experience in capital markets and financial advisory services to Hanmi. He is currently the President of Great American Capital Partners, LLC (“GACP”), an SEC-Registered Investment Advisor that originates and underwrites senior secured loans across a wide array of industries (2015 to present). GACP is a wholly owned subsidiary of B. Riley Financial, Inc., a publicly traded, diversified financial services company. Prior to his role at GACP, Mr. Ahn served as President of another B. Riley Financial, Inc. subsidiary, B. Riley & Co. (“B Riley”), a full-service investment banking firm that provides corporate finance, research, sales and trading services, and asset management to corporate and institutional clients. Prior to joining B. Riley, Mr. Ahn held numerous leadership positions in the investment banking and sales and trading sectors. He currently serves on the Board of Directors of Keppel-KBS US REIT, an office REIT with properties located in key growth markets in the U.S. and traded on the Singapore Exchange (SGX: CMOU). Mr. Ahn earned his B.A. degree in economics from Williams College.

Qualifications

Our Board believes that Mr. Ahn should serve as a director because of his extensive experience and background in investment banking, finance, strategic planning and his strong understanding of institutional investors.

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Annual Meeting Proxy Statement 2019

Kiho Choi

Director since: 2018

Age: 63

Board Committees:

Audit, NCG, RCP

Experience

Mr. Choi currently serves as the Managing Partner and is a Founding Partner of CKP, LLP, the largest Korean-American full-service accounting firm in the U.S., providing services to private companies and U.S. subsidiaries of Korean companies. Mr. Choi has more than 30 years of assurance and business advisory experience and specializes in serving middle-market companies in banking, health care, manufacturing and wholesale distribution. He also served as a past President of the Korean American CPA Society of Southern California, and as an Advisory Member to the Korea Trade Investment Promotion Agency of Los Angeles. He is a member of the American Institute of Certified Public Accountants and a member of the California Society of Certified Public Accountants. Mr. Choi is currently an independent director of the Board of Directors of Netlist, Inc., an information technology company, and was formerly a member of the Board of Directors of BBCN Bancorp, Inc. and BBCN Bank. Mr. Choi earned his B.S. and M.S. degrees in accounting from the University of Illinois, Chicago.

Qualifications

Our Board believes that Mr. Choi should serve as a director because of his significant accounting and financial expertise, as well as executive leadership experience and strong relationships within the Korean-American business community.

Christie K. Chu

Director since: 2015

Age: 54

Board Committees:

Audit, CHR, NCG

Experience

Ms. Chu currently serves as the President and CEO of CKC Accountancy Corporation, a tax, management and financial consulting firm. Ms. Chu brings over 30 years of experience as a Certified Public Accountant, having served as a Supervising Audit Senior at KPMG, a Tax Senior Advisor at Ernst & Young, LLP, and a Staff Tax Accountant at Arthur Anderson & Co. She also served as a past President of the Korean American CPA Society of Southern California, where she has been a board member since 2004. She is a current member of the California Society of Certified Public Accountants. She was previously the Treasurer of the national Korean American Society of CPAs. Ms. Chu earned her B.A. degree in business and economics from the University of California, Los Angeles.

Qualifications

Our Board believes that Ms. Chu should serve as a director because of her extensive business and accounting background and experiences at several major accounting firms. Ms. Chu fully understands our core business customer and how to appeal to the next generation of business leaders.

Harry H. Chung

Director since: 2016

Age: 49

Board Committees:

Audit, CHR

Experience

Mr. Chung brings over 25 years of experience in capital markets and financial services. He currently serves as the Chief Operations Officer and Chief Financial Officer of Great American Capital Partners, LLC, a specialty finance company (June 2017 to present). He was previously Chief Financial Officer of Breakwater Investment Management, a private investment firm based in Los Angeles, California specializing in direct debt and equity investments in leading lower middle market growth companies. Prior to this role, Mr. Chung served as the Chief Financial Officer of Imperial Capital, a full-service investment bank offering comprehensive services to institutional investors and middle market companies. He also has held numerous leadership positions at Jefferies and Company, Inc., a global investment bank. Mr. Chung earned his B.S. degree in accounting from the University of Illinois in Champaign-Urbana.

Qualifications

Our Board believes that Mr. Chung should serve as a director because of his experience in capital markets and financial services, including strategic planning and corporate development. Mr. Chung’s experience as a Chief Financial Officer has provided him with financial expertise that is valuable in his role as chair of the Audit Committee.

Scott R. Diehl

Director since: 2018

Age: 57

Board Committees:

NCG, RCP

Experience

Mr. Diehl brings over 30 years of experience from the banking and financial industry, having spent his entire career at Wells Fargo Capital Finance and its predecessor corporation, Foothill Capital Corporation. Prior to his retirement in July 2017, Mr. Diehl was a Group Head overseeing the Factoring, Receivable Securitization and Supply Chain Finance lending units. Prior to this role, his Industries Group oversaw the Lender Finance, Technology Finance, Healthcare Finance and Supply Chain Finance business units. Mr. Diehl also served in various other leadership positions related to asset based lending and commercial finance for Wells Fargo Finance and Foothill Capital Corporation. Mr. Diehl earned his B.A. degree in history from Brown University.

Qualifications

Our Board believes that Mr. Diehl should serve as a director because his experience in specialty lending is valuable to the Company. Mr. Diehl’s broad banking experience as an executive at Wells Fargo, and its predecessor, will enable him to positively contribute to the growth of Hanmi and its product lines.

Bonita I. Lee

Director since: April 2019

Age: 56

Board Committees:

RCP

Experience

Ms. Lee served as Senior Executive Vice President Chief Operating Officer of Hanmi and Hanmi Bank since August 2013. She was promoted to serve as our President on June 15, 2018. She was previously the Senior Executive Vice President and Chief Operating Officer of BBCN Bank and BBCN Bancorp, Inc., where she was named Acting President and Chief Operating Officer from February 2013 to April 2013 and led an Executive Council carrying out the duties of the Chief Executive Officer during a management transition period at BBCN Bank. Prior to this, Ms. Lee served as director and Regional President of the Western Region for Shinhan Bank America from September 2008 to March 2009. Prior to joining Shinhan Bank America, she served as Executive Vice President and Chief Credit Officer at Nara Bank from April 2005 to September 2008, and as a Member of the Office of the President from March 2006 to September 2008.

Qualifications

Our Board believes that Ms. Lee should serve as a director because she brings to the board her extensive experience in the Korean-American banking industry, her many successes in safely and profitably growing her organization, her business acumen and good relationship with the investors in the Korean-American community.

David L. Rosenblum

Director since: 2014

Age: 66

Board Committees:

Audit, CHR, RCP

Experience

Mr. Rosenblum is retired and a former Senior Principal at Deloitte Consulting LLP (1979 to 2013), where he was the National Managing Director of Consulting Corporate Development and a key leader of the Strategy and Operations practice. Mr. Rosenblum currently serves as Chairman of the Pacific Southwest Chapter of National Association of Corporate Directors (“NACD”) and is an advisor to a Los Angeles based private equity firm. He previously served as the Chairman of the Echo Foundation from 2004 to 2009. Prior to his current roles, he served on the board of Deloitte Consulting LLP, was the Vice Chair of the Library Foundation of Los Angeles board, and was a member of the Wesleyan University board of trustees. Mr. Rosenblum earned his B.A. degree in economics from Wesleyan University and his M.B.A. degree in finance from the Wharton School at the University of Pennsylvania.

Qualifications

Our Board believes that Mr. Rosenblum should serve as a director because of his strategic planning, mergers and acquisitions, and corporate development experience in assisting financial institutions. In addition, as the Chairman of the Pacific Southwest Chapter of the NACD, he brings deep knowledge regarding best practices in running our Board.

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Annual Meeting Proxy Statement 2019

Thomas J. Williams

Director since: 2016

Age: 56

Board Committees:

RCP

Experience

Mr. Williams brings over 30 years of experience in bank regulation and the broader banking industry. Specifically, Mr. Williams brings extensive experience across a broad range of risk and lending activities. Prior to his retirement in May 2015, Mr. Williams served as Senior Vice President and Chief Risk Officer at BofI Federal Bank, overseeing all risk and control-related functions. Before that role, he served as Executive Director of Commercial Credit Review at Capital One and Director of Regulatory Relations at Silicon Valley Bank. Earlier in his career, Mr. Williams spent five years as Principal Examiner at the Federal Reserve Bank of San Francisco and ten years as a National Bank Examiner with the Office of the Comptroller of the Currency. Mr. Williams earned his B.S. degree in economics from the University of South Dakota.

Qualifications

Our Board believes that Mr. Williams should serve as a director because of his broad based regulatory experience and expertise. In the present regulatory environment, we believe Mr. Williams’ strength in risk management is critical to assisting with the safe and sound operation of the Bank.

Michael M. Yang

Director since: 2016

Age: 57

Board Committees:

CHR, NCG

Experience

Mr. Yang brings over 30 years of experience as a successful entrepreneur and corporate executive. He is currently the Founder and CEO of Michael Yang Capital Management, LLC, an investment management company that invests in public equities of disruptive technology companies. Prior to his current role, Mr. Yang was Co-Founder and CEO of three technology start-ups that were sold to larger enterprises at significant premiums, including mySimon.com Inc., which was acquired by CNET. Mr. Yang began his career at Xerox Corporation and Samsung Electronics Co., Ltd., where he held positions of increasing responsibility in engineering, marketing and corporate development. Mr. Yang earned his B.S. degree in electrical engineering from the University of California, Berkeley, his M.S. degree in computer science from Columbia University and his M.B.A. degree from the Haas School of Business, University of California, Berkeley.

Qualifications

Our Board believes that Mr. Yang should serve as a director because of his executive experience in growing companies, as well as his strategic planning, mergers and acquisitions, corporate development and technological knowledge.

Name

Age

Experience and Qualifications

C. G. Kum

Chief Executive Officer

(“CEO”); Director

64

Mr. Kum has served as the Chief Executive Officer from June 2013 until his retirement from Hanmi and Hanmi Bank in May 2019. Prior to his current role, he served as the President and Chief Executive Officer of First California Financial Group and its subsidiary First California Bank (September 1999 to May 2013), on the boards of First California Financial Group and First California Bank, and as President of the board of directors of Community Bankers of California. He currently is a member of the board of directors of the California Bankers Association and has served on numerous boards of nonprofit organizations, including the United Way and Boys Scouts of America of Ventura County. Mr. Kum earned his undergraduate degree from the University of California, Berkeley and his M.B.A. degree from Pepperdine University.

Bonita I. Lee

President and Chief Operating

Officer (“COO”)

56

For Ms. Lee’s experience and qualifications, see Board of Directors and Nominees beginning on page 14.

Romolo C. Santarosa

Senior Executive Vice President

and Chief Financial Officer

(“CFO”)

62

Mr. Santarosa has served as Senior Executive Vice President and Chief Financial Officer of Hanmi and Hanmi Bank since November 2015 and brings more than 28 years of experience in banking and financial services. Over his career, he has been responsible for leading and directing growth strategies, cost reduction and process improvement initiatives, technology implementations and capital management. Most recently, from June 2013 until November 2015, he was Executive Vice President and Chief Operating Officer at Opus Bank, where he was responsible for operational and support functions. Prior to this, Mr. Santarosa served as the Senior Executive Vice President, Chief Financial Officer and Chief Operating Officer at First California Financial Group, Inc. and its bank subsidiary, First California Bank (November 2002 to May 2013). Before 2002, Mr. Santarosa served in leadership positions with several financial institutions and was an Audit Senior Manager with Price Waterhouse. Mr. Santarosa earned his B.S. degree in accounting and a minor in mathematics from Ithaca College.

Jean Lim

Executive Vice President and

Chief Risk Officer (“CRO”)

56

Ms. Lim has served as Executive Vice President and Chief Risk Officer of Hanmi Bank since August 2013. She previously served as Senior Vice President and Chief Risk Officer of Hanmi Bank from August 2008 until her promotion. Prior to her role as Chief Risk Officer, she served as the Chief Compliance Officer of Hanmi Bank since August 2006 with oversight responsibility for compliance, BSA, as well as operations administration and human resources. From February 2002 to July 2006, Ms. Lim served as Senior Vice President and Chief Compliance Officer of Wilshire State Bank, where she built the BSA and Compliance Departments. Ms. Lim began her banking career at Hanmi Bank in 1984 after receiving her bachelor’s degree from Stanford University.

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Annual Meeting Proxy Statement 2019

Name

Age

Experience and Qualifications

Matthew D. Fuhr

Executive Vice President and

Chief Credit Administrative

Officer (“CCAO”)

56

Mr. Fuhr has served as Executive Vice President and Chief Credit Administrative Officer of Hanmi Bank since March 2017. He previously served as Senior Vice President and Deputy Chief Credit Officer from June 2015 until his promotion. Prior to his tenure with Hanmi Bank, he was the Senior Vice President and Credit Administrator at Pacific Western Bank for 13 years. Earlier in his career, Mr. Fuhr served as a Commissioned Bank Examiner with the Federal Deposit Insurance Corporation. Mr. Fuhr earned his B.S. degree in business administration with emphasis in finance from University of Northern Colorado.

C. G. Kum: Chief Executive Officer

Bonita I. Lee: President & Chief Operating Officer

Romolo C. Santarosa: Sr. EVP & Chief Financial Officer

Jean Lim: EVP & Chief Risk Officer

Matthew D. Fuhr: EVP & Chief Credit Administration Officer

Operating Results,

Profitability and Value

Creation

•  Net income was $57.9 million compared with $54.7 million from 2017

•  Deposits grew 9.2% in 2018 to $4.75 billion

•  Efficiency ratio of 57.2%

•  Excellent asset quality: nonperforming assets at 0.29% of total assets and net charge-offs of 0.07% for the year

•  Total loans and leases increased 6.9% year-over-year, while loan to deposit ratio reduced from 99.0% to 96.9% due to strong total deposit growth

•  Annual 2018 dividend of $0.96 per share

Element

Type

2018 Highlights

Base Salary

Fixed

When setting base salaries, the CHR Committee considers factors such as experience, responsibilities, job performance, and market compensation information.

•  The Company’s CEO, Mr. Kum, did not receive a salary increase in 2018.

•  Increases for the other NEOs ranged from 3.1% to 13.6%.

Short-Term

Cash Incentive

Compensation

Variable

The Company maintains a performance-based annual cash incentive plan for the NEOs, which is payable contingent on the achievement of pre-established financial results for the Company and individual performance objectives. For 2018, the CHR Committee established target incentive award opportunities for each NEO and assessed performance relative to established goals. The CHR Committee determined that the results were not achieved, resulting in no incentive payouts for 2018 performance for any of the NEOs.

Long-Term

Incentive Awards

(Equity)

The CHR Committee, in its discretion, determines equity grants for the NEOs after considering each executive’s performance, previous grant history, ownership level, comparison to our peer group, and retention needs.

•  Mr. Santarosa received a performance-based restricted stock grant of 32,680 shares with annual vesting of up to 25% in each of our 2018, 2019, 2020, 2021 fiscal years, respectively, subject to the Company’s Total Shareholder Return (“TSR”) performance relative to companies in the KBW Regional Banking Index for each year. No shares can be earned in any given year unless the Company’s TSR is positioned at or above the 50^th percentile. For 2018, the threshold level of performance (50^th percentile) was not achieved and 25% of the shares were forfeited.

•  Ms. Lim and Mr. Fuhr each received a grant of 3,000 restricted shares in 2018. Shares vest in equal installments over three years.

•  Mr. Kum and Ms. Lee did not receive any equity awards in 2018 beyond a year of service award of restricted stock, which are offered to all full time employees upon completion of certain years of service milestones. In 2016, Mr. Kum and Ms. Lee received a performance-based restricted stock grant of 99,010 and 49,505 shares, respectively, with annual vesting of up to 25% in each of 2016, 2017, 2018 and 2019, subject to the Company’s TSR performance relative to companies in the KBW Regional Banking Index for each year. No shares can be earned in any given year unless the Company’s TSR is positioned at or above the 50^th percentile. Hanmi’s 2016 TSR performance was at the 76^th percentile. As a result, 25% of the total shares became earned and vested. For each of 2017 and 2018, the threshold level of performance (50^th percentile) was not achieved and 25% of the shares were forfeited for each of these years.

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Annual Meeting Proxy Statement 2019

A focus on variable compensation, evidenced by the fact that variable, performance-based compensation comprises a majority of our CEO’s pay.

Clawback policy applicable to all executive officers adopted in 2018.

Stock ownership guidelines established for the CEO, COO and CFO.

No excise tax gross-up payments.

No dividends are accrued or paid on unvested shares of performance-based restricted stock.

No hedging or pledging transactions.

Maintain a compensation program that is equitable in a competitive marketplace.

Provide opportunities that integrate pay with the Company’s annual and long-term performance goals.

Manage the risk profile of the Company by aligning risk mitigation within the performance of individual and Company-wide goals.

Encourage achievement of strategic objectives and the creation of shareholder value.

Recognize and reward individual initiative and achievements while managing risk.

Maintain an appropriate balance between base salary and short- and long-term incentive opportunities.

Allow the Company to compete for, retain and motivate talented executives critical to its success, consistent with its compensation philosophy.

Allow the Company to effectively engage institutional shareholders. Hanmi values our shareholders and works to have open two-way communication on all matters of importance. We proactively seek out our shareholders’ opinions, as appropriate.

Establish bonus structures subject to “clawback” in the event of material inaccurate financial statements or materially inaccurate performance metric criteria resulting in the payment of excess incentive compensation.

Foster an ownership culture among executive officers and the directors through minimum stock ownership guidelines.

Review the overall human resource development and compensation strategy for the CEO, executive officers, and directors.

Lead the Board in its annual review of executive management’s performance.

Evaluate CEO performance, set annual goals and evaluate total compensation.

Evaluate compensation recommendations from the CEO for other NEOs.

Evaluate the annual executive incentive compensation plan in light of participation, goals and budgetary considerations.

Review broad-based incentive compensation plans to ensure compliance with regulations and laws.

Administer the Company’s long-term incentive program.

22

Annual Meeting Proxy Statement 2019

Increase

Percentage

C. G. Kum

Bonita I. Lee

Romolo C. Santarosa

Jean Lim

Matthew D. Fuhr

C. G. Kum

CEO

Weight

ROAA

25%

NPA/Assets

25%

Efficiency Ratio

25%

Personal Performance

25%

Eligible Salary ($)

675,000

Target % of Salary

100%

Target Award ($)

675,000

Bonita I. Lee

President & COO

Weight

Romolo C. Santarosa

Sr. EVP & CFO

Weight

Jean Lim

EVP & CRO

Weight

Matthew D. Fuhr

EVP & CCAO

Weight

Deposit Growth

20%

Capital Management

20%

BSA

20%

Credit Quality

30%

Asset Quality & Risk Management

25%

Business Model

20%

Compliance

20%

Operations

10%

Profitability

25%

Technology Strategy

25%

Risk-ERM

30%

Growth

20%

Strategic Initiatives

20%

Personnel Management

25%

Personnel Management

20%

Risk Management

30%

Discretionary

10%

Discretionary

10%

Discretionary

10%

Discretionary

10%

Eligible Salary ($)

400,000

Eligible Salary ($)

330,000

Eligible Salary ($)

266,734

Eligible Salary ($)

259,375

Target Award ($)

Target Award ($)

Target Award ($)

Target Award ($)

24

Annual Meeting Proxy Statement 2019

On February 17, 2016, the CHR Committee granted each of Mr. Kum and Ms. Lee a performance-based restricted stock grant of 99,010 and 49,505 shares, respectively, which were intended to cover a multi-year period. As such, Mr. Kum and Ms. Lee did not receive additional equity awards in 2018 beyond the year of service award described previously.

The grant provides for annual vesting of up to 25% in 2016, 2017, 2018 and 2019, subject to the Company’s TSR performance relative to companies in the KBW Regional Banking Index for each respective year. To the extent that the performance requirements are not met for any given year, any unearned shares applicable to that year will be forfeited.

No shares can be earned for each performance period if the Company’s TSR is below the 50^th percentile. Assuming 50^th percentile TSR achievement (threshold) for any given year, 50% of the shares scheduled to vest for such year will be earned. Assuming 75^th percentile TSR achievement (target) for any given year, 100% of the shares scheduled to vest for such year will be earned. Shares earned for performance between the 50^th and 75^th percentile for any given year will be determined by linear interpolation.

There is no retesting of the performance-based restricted shares. Any portion of the shares that do not vest as a result of actual TSR performance for any given year shall be forfeited for such year.

Any shares held by the CEO and CFO are subject to potential cancellation, recoupment, rescission, payback or other action in accordance with the terms of the Company’s clawback policy.

2016 Results: In March 2017, the CHR Committee determined that the Company’s TSR during 2016 was 51.30%, which placed it at the 76^th percentile when compared against the KBW Index. As a result, the CHR Committee certified the level of achievement of this award at target for 2016, resulting in 25% of the total number of shares subject to this award becoming earned and vested.

2017 Results: In March 2018, the CHR Committee determined the Company’s TSR during 2017 was below the 50^th percentile of the KBW Index. As a result, the CHR Committee certified the level of achievement below threshold for 2017, resulting in 25% of the total number of shares subject to this award to be forfeited.

2018 Results: In March 2019, the CHR Committee determined the Company’s TSR during 2018 was below the 50^th percentile of the KBW Index. As a result, the CHR Committee certified the level of achievement below threshold for 2018, resulting in 25% of the total number of shares subject to this award to be forfeited.

On March 29, 2018, the CHR Committee granted 3,000 restricted shares to Ms. Lim and Mr. Fuhr, respectively, at which time our closing price was $30.75 per share. The shares vest in equal annual installments over three years. The CHR Committee approved the award based on a recommendation from Mr. Kum after reviewing the NEO’s contributions to Hanmi during 2017. The award size for both NEOs in 2018 was determined based in part on existing equity ownership levels, a review of past grant sizes, competitive market practices, contributions to Hanmi’s 2017 performance results, retention concerns and ownership levels of similarly situated executives at the Company.

On February 28, 2018, the CHR Committee granted Mr. Santarosa a performance-based restricted stock grant consisting of 32,680 shares of Company common stock intended to cover a multi-year period.

Mr. Santarosa’s grant contained substantially the same terms as are applicable to the grants to Mr. Kum and Ms. Lee described previously, except that the performance period runs from fiscal year 2018 through fiscal year 2021.

2018 Results: In March 2019, the CHR Committee determined the Company’s TSR during 2018 was below the 50^th percentile of the KBW Index. As a result, the CHR Committee certified the level of achievement below threshold for 2018, resulting in 25% of the total number of shares subject to this award to be forfeited.

TERM: The Employment Agreement provides for a term that commences on June 15, 2018 and ends upon the earlier of (i) May 3, 2019, which is the date on which Mr. Kum intends to retire from the Company, and (ii) the close of business on the effective date of termination of employment.

COMPENSATION: Annual base salary of $675,000, which may be reviewed and adjusted in the usual and ordinary course consistent with past practices and standards. Mr. Kum is eligible to receive an annual bonus pursuant to the annual bonus plan. See Short-Term Cash Incentive Compensation above for a description of the 2018 goals. Under the Employment Agreement, Mr. Kum is entitled to participate in employee benefit plans for which he may be eligible and will receive certain perquisites, including the use of a company car, payment of country club dues, Company-provided health and welfare benefits and personal life insurance, and 20 days of paid vacation annually. In addition, the Company provides for Mr. Kum’s term life insurance coverage premium for $1,000,000 during the term of the Employment Agreement.

26

Annual Meeting Proxy Statement 2019

TERMINATION WITHOUT CAUSE OR FOR GOOD REASON: The Employment Agreement provides that if Mr. Kum’s employment is terminated either by the Company without “cause” or by him for “good reason,” in either case, other than within 18 months following a “change in control,” and subject to Mr. Kum’s execution of a general release of claims, Mr. Kum will be entitled to receive the following severance payments and benefits: (i) continued payment of his then-current annual base salary for 12 months following the date of termination, (ii) a lump-sum payment equal to the pro-rated portion of his prior year’s annual bonus based on the number of days worked during the year of termination, (iii) accelerated vesting of any then-unvested time-based equity awards held by Mr. Kum with respect to the portion that would have vested if Mr. Kum’s employment had continued for one year following the date of termination, and (iv) continued health insurance benefits at the Company’s expense under COBRA for up to 18 months.

TERMINATION IN CONNECTION WITH A CHANGE IN CONTROL: If, within 18 months following a change in control, Mr. Kum’s employment with the Company is terminated either by the Company without cause or by him for good reason, and subject to Mr. Kum’s execution of a general release of claims, Mr. Kum will be entitled to receive the following severance payments and benefits: (i) a lump sum payment equal to two and one-half times the sum of his then-current annual base salary and his then-maximum annual bonus (which is at “target” under the AIP), (ii) fully accelerated vesting of any then-unvested time-based equity awards held by Mr. Kum, and (iii) continued health insurance benefits at the Company’s expense under COBRA for up to 18 months.

TERMINATION DUE TO DEATH OR DISABILITY: If Mr. Kum’s employment terminates due to his death or disability, then he or his estate, as applicable, will be entitled to receive a lump-sum payment equal to the pro-rated portion of his prior year’s annual bonus based on the number of days worked during the year of termination and accelerated vesting of any then-unvested time-based equity awards held by Mr. Kum with respect to the portion that would have vested if Mr. Kum’s employment had continued for one year following the date of termination

CHANGE IN CONTROL: In the event of any change in control of the Company, all of Mr. Kum’s time-vesting equity awards will fully vest and performance-vesting equity awards will be treated in accordance with the terms of the plan document and applicable award agreements.

Mr. Kum remains subject to the confidentiality, non-solicitation and other covenants included in his restrictive covenant agreements with the Company and the non-disparagement covenant set forth in the Employment Agreement. In addition, if any payments or benefits provided to Mr. Kum in connection with a change in control are subject to excise taxes as a result of the application of Sections 280G and 4999 of the Internal Revenue Code, such payments and benefits will be reduced so that no excise tax is payable, but only if this reduction results in a more favorable after-tax position for him.

TERM: The Lee Employment Agreement provides for a term that commences on May 3, 2019 and ends on May 6, 2022 (unless earlier terminated by either party), subject to automatic renewal for successive one-year periods unless either party provides notice of non-renewal prior to the expiration of the then-current term.

COMPENSATION: Annual base salary of $525,000, which may be increased, but not decreased, in the sole discretion of the Board, and under the terms of her employment agreement, Ms. Lee is eligible to receive an annual bonus capped at 100% of her annual base salary. Ms. Lee’s annual bonus, which is to be paid in cash and/or equity, is generally dependent on the attainment of certain financial goals set by the CHR Committee. Under the Lee Employment Agreement, Ms. Lee is entitled to participate in employee benefit plans for which she may be eligible and will receive certain

TERMINATION WITHOUT CAUSE OR FOR GOOD REASON: The Lee Employment Agreement provides that if Ms. Lee’s employment is terminated either by the Company without “cause” or by her for “good reason,” in either case, other than within 18 months following a “change in control,” and subject to Ms. Lee’s execution of a general release of claims, Ms. Lee will be entitled to receive the following severance payments and benefits: (i) continued payment of her then-current annual base salary for 12 months following the date of termination, (ii) a lump-sum payment of an amount equal to the pro-rated portion of her prior year’s annual bonus based on the number of days worked during the year of termination, (iii) accelerated vesting of any then-unvested time-based equity awards held by Ms. Lee with respect to the portion that would have vested if Ms. Lee’s employment had continued for one year following the date of termination, and (iv) continued health insurance benefits at the Company’s expense under COBRA for up to 18 months.

TERMINATION IN CONNECTION WITH A CHANGE IN CONTROL: If, within 18 months following a change in control, Ms. Lee’s employment with the Company is terminated either by the Company without cause or by her for good reason, and subject to Ms. Lee’s execution of a general release of claims, Ms. Lee will be entitled to receive the following severance payments and benefits: (i) a lump sum payment of an amount equal to two and one-half times the sum of her then-current annual base salary and her then-maximum annual bonus, (ii) fully accelerated vesting of any then-unvested time-based equity awards held by Ms. Lee, and (iii) continued health insurance benefits at the Company’s expense under COBRA for up to 18 months.

TERMINATION DUE TO DEATH OR DISABILITY: If Ms. Lee’s employment terminates due to her death or disability, then she or her estate, as applicable, will be entitled to receive a lump-sum payment of an amount equal to the pro-rated portion of her prior year’s annual bonus based on the number of days worked during the year of termination.

In the event of Ms. Lee’s termination for any of the reasons set forth above, Ms. Lee’s performance-vesting equity awards will be treated in accordance with the terms of the applicable plan document and applicable award agreements.

Ms. Lee remains subject to the confidentiality, non-solicitation and other covenants included in her restrictive covenant agreements with the Company and the non-disparagement covenant set forth in the Lee Employment Agreement. In addition, the payment to Ms. Lee of any of the above-named benefits on termination of employment is generally conditioned on her execution and non-revocation of a general release in favor of the Company. If any payments or benefits provided to Ms. Lee in connection with a change in control are subject to excise taxes as a result of the application of Sections 280G and 4999 of the Internal Revenue Code, such payments and benefits will be reduced so that no excise tax is payable, but only if this reduction results in a more favorable after-tax position for her.

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Annual Meeting Proxy Statement 2019

TERM: The agreement provides for a three-year term commencing (retroactively) on November 1, 2017 and ending on October 31, 2020 (unless earlier terminated by either party), subject to automatic renewal.

COMPENSATION: The annual base salary of Mr. Santarosa is $320,000, and may be increased, but not decreased (except in limited circumstances set forth in the employment agreement) by the Board, based on the recommendation of the CHR Committee. Mr. Santarosa is also entitled to participate in employee benefit plans for which he may be eligible and fringe benefits to which the Company’s senior executives are entitled.

TERMINATION PAYMENTS: The terms of Mr. Santarosa’s employment agreement regarding severance payments are the same as the terms and payment formulas available to Mr. Kum’s under his Employment Agreement for each of the termination events discussed above, with the exception of termination in connection with a change in control.

TERMINATION IN CONNECTION WITH A CHANGE IN CONTROL: If, within 18 months following a change in control, Mr. Santarosa’s employment with the Company is terminated either by the Company without cause or by them for good reason, and subject to Mr. Santarosa execution of a general release of claims, he will be entitled to receive the following severance payments and benefits: (i) a lump sum payment equal to two times the sum of his then-current annual base salary and his then-maximum annual bonus (which is at “target” under the AIP), (ii) fully accelerated vesting of any then-unvested time-based equity awards, and (iii) continued health insurance benefits at the Company’s expense under COBRA for up to 18 months.

CHANGE IN CONTROL: In the event of a change in control of the Company, the executive’s time-vested equity awards will fully vest and performance-vesting equity awards will be treated in accordance with the terms of the plan document and award agreements.

Mr. Santarosa also remains subject to the confidentiality, non-solicitation and other covenants included in his restrictive covenant agreement with the Company and the non-disparagement covenant set forth in his employment agreement. In addition, if any payments or benefits provided to Mr. Santarosa in connection with a change in control are subject to excise taxes as a result of the application of Sections 280G and 4999 of the Internal Revenue Code, such payments and benefits will be reduced so that no excise tax is payable, but only if this reduction results in a more favorable after-tax position for the executive.

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Annual Meeting Proxy Statement 2019

  Name and

  Principal Position

Year

Salary
($)

Stock
Awards
($) ⁽¹⁾

Non-Equity
Incentive Plan
  Compensation  
($) ⁽²⁾

All Other
  Compensation  
($) ⁽³⁾

Total

($)

C. G. Kum

CEO

2018

675,000

312

—

86,002

761,314

2017

651,750

1,090

607,500

86,218

1,346,558

2016

592,923

915,843

567,300

86,235

2,162,301

Bonita I. Lee

President & COO

2018

388,923

294

—

54,594

443,811

2017

348,639

1,090

167,200

43,337

560,266

2016

334,642

457,921

155,221

33,883

981,667

Romolo C. Santarosa

Sr. EVP & CFO

2018

327,692

491,834

—

41,455

860,981

2017

311,044

290,090

152,000

36,222

789,356

2016

279,998

—

126,535

33,898

440,431

Jean Lim

EVP & CRO

2018

264,139

92,250

—

34,779

391,168

2017

255,365

107,940

65,559

34,269

463,133

2016

248,896

24,120

56,161