Los Angeles
New York/
New Jersey
Virginia
Chicago
Dallas
Houston
San Francisco
San Diego
D.A. Davidson's 26th Annual Financial Institutions Conference
May 8 - 10, 2024
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 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, economic and competitive outlook, investment and expenditure plans, capital and financing needs and availability, litigation, plans and objectives, merger or sale activity, financial condition and results of operations, and all other forecasts and statements of expectation or assumption underlying any of the foregoing. These statements involve known and unknown risks and uncertainties that are difficult to predict. Investors should not rely on any forward-looking statement and should consider risks, such as changes in governmental policy, legislation and regulations, economic uncertainty and changes in economic conditions, inflation, the continuing impact of the COVID- 19 pandemic on our business and results of operations, fluctuations in interest rate and credit risk, competitive pressures, the ability to succeed in new markets, balance sheet management, liquidity and sources of funding, the size and composition of our deposit portfolio, including the percentage of uninsured deposits in the portfolio, increased assessments by the Federal Deposit Insurance Corporation, risk of natural disasters, a failure in or breach of our operational or security systems or infrastructure, including cyberattacks, the adequacy of and changes in the methodology of calculating our allowance for credit losses, and other operational factors.
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 recent Form 10-K,10-Q and other filings with the Securities and Exchange Commission ("SEC"). The Company disclaims any obligation to update or revise the forward-looking statements herein.
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Non-GAAP Financial Information
This presentation contains financial information determined by methods other than in accordance with accounting principles generally accepted in the United States of America ("GAAP"). These non-GAAP measures include tangible common equity to tangible assets, and tangible common equity per share. Management uses these "non-GAAP" measures in its analysis of the Company's performance. Management believes these non-GAAP financial measures allow for better comparability of period to period operating performance. Additionally, the Company believes this information is utilized by regulators and market analysts to evaluate a company's financial condition and therefore, such information is useful to investors. These disclosures should not be viewed as a substitute for operating results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies. A reconciliation of the non-GAAP measures used in this presentation to the most directly comparable GAAP measures is provided in the Appendix to this presentation.
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Table of Contents
Overview & highlights | 5 - 9 |
Loan portfolio | 10 - 23 |
Deposit portfolio | 24 - 25 |
Margin, fee income, expenses | 26 - 30 |
Asset quality | 31 - 35 |
Securities & liquidity | 36 - 37 |
Capital management | 38 - 39 |
Corporate Sustainability | 40 - 43 |
Appendix | 44 - 49 |
4
Hanmi Franchise at a Glance
1 | 3 | 2 | 1 |
1
1 1
22 | 2 | 1 |
7 | 1 | Branch |
Loan Production Office (LPO) | ||
Experienced Bankers with Deep Community Ties
Second Largest Korean-American Bank in the U.S.
- Founded in 1982 in Los Angeles, as the first Korean-American bank
- 35 full-service branches and 8 loan production offices across 9 states
- Focused on MSAs with high Asian-American and multi-ethnic populations
- Strong track record of growth
- Well capitalized, significantly above regulatory requirements
- CAGR based on the average loan growth between 2013, when new executive management was appointed, and 2023
- Non-GAAPfinancial measure; refer to the non-GAAP reconciliation slide
As of 1Q24
Total Assets
$7.5B
Loans
$6.2B
Deposits
$6.4B
Loan Growth(1)
10.7%
TBVPS(2)
$22.86
TCE/TA(2) Ratio
9.23%
5
Management Team | |||
Banking | Hanmi | ||
Name | Position | Experience | Experience Previous Experience |
(Years) | (Years) |
Bonnie Lee | President & CEO | 38 | 11 |
Romolo Santarosa | SEVP, Chief Financial Officer | 33 | 9 |
Anthony Kim | SEVP, Chief Banking Officer | 30 | 11 |
Matthew Fuhr | EVP, Chief Credit Officer | 28 | 9 |
Mike Park | EVP, Chief Credit Risk Officer | 36 | 10 |
Anna Chung | EVP, Chief SBA Lending Officer | 41 | 10 |
Navneeth Naidu | EVP, Chief Technology Officer | 22 | 6 |
Michael Du | EVP, Chief Risk Officer | 25 | 5 |
Joseph Pangrazio | SVP, Chief Accounting Officer | 26 | 2 |
BBCN Bancorp, Shinhan Bank America, Nara Bank
Opus Bank, First California Financial Group
BBCN Bancorp
Pacific Western Bank, FDIC
East West Bank
East West Bank, Nara Bank, Wilshire Bank, First American Bank
Columbia Bank, American Marine Bank, First Capital Bank of Texas
Pacific Western Bank, Unify Financial Federal Credit Union
Bank of the West, Arthur Anderson
6
The Hanmi Timeline
For over 40 years, we have been dedicated to helping our stakeholders bank on their dreams.
2007
- Completed $70 million secondary
2017
- Assets surpassed $5 billion |
2022
- Assets surpassed $7 billion |
- Celebrated 40th Anniversary |
1982
common stock offering
- Opened a Manhattan, NY branch |
- Nasdaq Closing Bell Ceremony |
- First Korean American Bank in the U.S.
2001
- Listed HAFC common stock
2004
- Acquired Pacific Union Bank ($1.2 billion in assets)
1988
- Began offering SBA loans
- Acquired First Global Bank
2014
- Acquired Central Bancorp, Inc. ($1.3 billion in assets)
2016
- Acquired Commercial Equipment Leasing Division ($228 million in assets)
2013
- C.G. Kum appointed as the new CEO
- Bonnie Lee appointed as the new COO
2019
- Bonnie Lee appointed as the new CEO
2020
- Launch of USKC(1)
- Revitalization of Mortgage Lending
2018
- Opened Chinatown branch in Houston, Texas
- U.S. subsidiaries of Korean Corporations
7
Why Hanmi?
- Strong average deposit growth reflecting a 10% CAGR since 2013
- Average noninterest-bearing deposit at $1.9 billion, represents 30% of average deposits at March 31, 2024 year-to-date, and reflects a 10% CAGR since 2013
- Business deposits represent 51% of total deposits at March 31, 2024
- Cash dividend of $0.25 per share, demonstrating management's confidence in the Company's performance
- Tangible common equity to tangible assets(1) was 9.23% at the end of the first quarter. Common equity tier 1 capital ratio was 12.05% and total capital ratio was 15.20%
- Bank remains well-capitalized and Company exceeds minimum capital requirements at March 31, 2024
Diversified Loan
Premier Deposit Portfolio and
Franchise Disciplined
Credit
Administration
Prudent Capital | Strong Culture |
and Corporate | |
Management | |
Sustainability | |
- Non-GAAPfinancial measure; refer to the non-GAAP reconciliation slide
- Based on the 2023 Hanmi ESG Report (published on April 2023)
- Strong average loan growth reflecting an 11% CAGR since 2013
- Significant progress reducing CRE concentration from 85% of the total portfolio, at December 31, 2013 to 63%, at March 31, 2024, through portfolio diversification that includes equipment finance, RRE, and multi- family
- Allowance for credit losses to loans was 1.11% at March 31, 2024 and nonperforming assets were 0.19% of total assets
- Hanmi Financial Corporation received highest ISS ESG designation in Governance in 2022(2)
- $7.5 million long-term commitment to a Community Reinvestment Act fund(2)
- 426 Hanmi Bank Dream Scholarships awarded to support at-risk youth program(2)
8
1Q24 Highlights
Net Income | Diluted EPS | ROAA | ROAE | NIM | Efficiency Ratio | TBVPS(1) | |||||
$15.2M | $0.50 | 0.81% | 7.90% | 2.78% | 62.42% | $22.86 | |||||
- Net income was $15.2 million, or $0.50 per diluted share, down 18.6% from $18.6 million, or $0.61 per diluted share, for the prior quarter
- Net interest income was $50.7 million, down 4.7% from the prior quarter
- Noninterest income was $7.7 million, up 15.8% from the prior quarter
- Noninterest expense was $36.4 million, up 3.5% from the prior quarter
- Efficiency ratio was 62.42%, compared with 58.86% for the prior quarter
- Loans receivable were $6.18 billion, consistent with the prior quarter
- Loan production was $234.0 million with a weighted average interest rate of 8.02%
- Deposits were $6.38 billion, up 1.5% from the prior quarter, with noninterest-bearing demand deposits representing 30.3% of total deposits
- Cost of interest-bearingdeposits was 4.16%, up 33 basis points from the prior quarter
- Credit loss expense was $0.2 million; allowance for credit losses to loans was 1.11% at March 31, 2024
- Tangible common equity to tangible assets(1) was 9.23%, Common equity tier 1 capital ratio was 12.05% and total capital ratio was 15.20%
- Non-GAAPfinancial measure; refer to the non-GAAP reconciliation slide
9
Loan Production
Loan production of $234 million for 1Q24 reflected balanced contribution from nearly all business lines, and an 8
basis point decrease in the weighted average interest rate on new production. | |
90000% | 0.0021 |
80000%
70000%
60000%
50000%
7.39% | 7.80% | 8.10% | 8.02% | |||||
7.19% | ||||||||
Weighted average | ||||||||
interest rate on | ||||||||
new production | • | Commercial real estate loan production | ||||||
was $60.1 million and Residential | ||||||||
($ in millions) | mortgage(1) loan production was $53.1 | |||||||
million. |
40000%
30000%
20000%
10000%
0%
$389.5 | ||||||||||
$303.6 | $336.3 | 12% | ||||||||
11% | 14% | |||||||||
11% | $259.3 | $234.0 | ||||||||
16% | ||||||||||
12% | 15% | |||||||||
32% | 12% | |||||||||
21% | 13% | |||||||||
39% | ||||||||||
23% | 20% | 23% | ||||||||
20% | 17% | |||||||||
9% | 46% | 22% | ||||||||
13% | 32% | |||||||||
25% | 26% | |||||||||
16% | 0 | |||||||||
1Q23 | 2Q23 | 3Q23 | 4Q23 | 1Q24 | ||||||
- Commercial and industrial loan production was $50.8 million and equipment finance production was $39.2 million for the first quarter.
- SBA(2,3) loan production was $30.8 million for the first quarter.
CRE | C&I | Equipment Finance | RRE(1) | SBA(2,3) |
- Residential mortgage includes $2.0 million, $0.0, $0.0, $0.0, and $0.3 million of consumer loans for 1Q23, 2Q23, 3Q23, 4Q23, and 1Q24, respectively
- $34.5 million, $30.9 million, $36.1 million, $48.4 million, and $30.8 million of SBA loan production includes $22.6 million, $19.4 million, $17.6 million, $20.2 million, and $12.2 million of loans secured by CRE and the remainder representing C&I as of 1Q23, 2Q23, 3Q23, 4Q23, and 1Q24, respectively
- Production includes purchases of guaranteed SBA loans of $9.7 million, and $10.2 million for 4Q23, and 1Q24, respectively.
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Disclaimer
Hanmi Financial Corporation published this content on 08 May 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 09 May 2024 00:02:07 UTC.