Hanmi Acquires Commercial Equipment Leasing Unit
October 27 2016 - 10:36PM
Hanmi Financial Corporation (NASDAQ:HAFC) (“Hanmi”), the holding
company for Hanmi Bank (the “Bank”), today announced the Bank has
acquired the Commercial Specialty Finance (“CSF”) unit of Irvine,
California-based Banc of California (NYSE:BANC). Operating as
a division of Banc of California, CSF is among the top-50 U.S. bank
leasing franchises, with 2015 origination volume exceeding $170
million. The transaction, which closed on October 27, 2016, expands
Hanmi’s C&I originating platform to include commercial leasing
to small and mid-sized businesses nationwide.
As part of the transaction, the Bank acquired
the CSF portfolio consisting of $209 million of equipment leases
diversified across the U.S. with concentrations in California,
Georgia and Texas and represented by more than a dozen
industries. An additional $25 million of equipment leases
should be transferred to Hanmi in three to four weeks. The
Bank will retain substantially all existing CSF employees led by a
seasoned management team with deep industry relationships and
experience. As part of the Bank, the CSF team will continue
to operate from their current headquarters located in Irvine,
California as Hanmi’s Commercial Equipment Leasing Division.
The acquisition is expected to be immediately accretive to Hanmi’s
earnings per share.
“It gives me great pleasure to welcome the CSF
team to the Hanmi family,” stated Mr. C. G. Kum, President and
Chief Executive Officer of Hanmi. “This transaction
immediately establishes Hanmi as one of the leading providers of
small ticket leasing products to businesses on a nationwide
basis. CSF’s relationships and strong credit history provide
a platform from which we can scale the business in an efficient and
profitable manner. In addition, the acquisition of CSF nicely
complements our ongoing strategic focus on business banking to
diversify the Hanmi loan portfolio.”
CSF originates leases through a national network
of vendor and third-party originators. As Hanmi’s Commercial
Equipment Leasing Division, it will also market commercial
equipment leases internally to Hanmi’s business clients.
About Hanmi Financial Corporation Headquartered
in Los Angeles, California, Hanmi Financial Corporation owns Hanmi
Bank, which serves multi-ethnic communities through its network of
41 full-service branches and 6 loan production offices in
California, Texas, Illinois, Virginia, New Jersey, New York,
Colorado, Washington and Georgia. Hanmi Bank specializes in real
estate, commercial, SBA and trade finance lending to small and
middle market businesses. Additional information is available at
www.hanmi.com.
Forward-Looking Statements This press release
contains forward-looking statements, which are included in
accordance with the “safe harbor” provisions of the Private
Securities Litigation Reform Act of 1995. In some cases, you can
identify forward-looking statements by terminology such as “may,”
“will,” “should,” “could,” “expects,” “plans,” “intends,”
“anticipates,” “believes,” “estimates,” “predicts,” “potential,” or
“continue,” or the negative of such terms and other comparable
terminology. Although we believe that the expectations reflected in
the forward-looking statements are reasonable, we cannot guarantee
future results, levels of activity, performance or achievements.
All statements other than statements of historical fact are
“forward–looking statements” for purposes of federal and state
securities laws, including, but not limited to, statements about
the anticipated benefits of the acquisition of the CSF unit of Banc
of California, the completion of the transfer of additional
equipment leases, anticipated future operating and financial
performance, financial position and liquidity, business strategies,
regulatory and competitive outlook, investment and expenditure
plans, capital and financing needs and availability, plans and
objectives of management for future operations, developments
regarding our capital plans, strategic alternatives for a possible
business combination, merger or sale transaction, and other similar
forecasts and statements of expectation and statements of
assumption underlying any of the foregoing. These statements
involve known and unknown risks, uncertainties and other factors
that may cause our actual results, levels of activity, performance
or achievements to differ from those expressed or implied by the
forward-looking statement. These factors include the following:
failure to maintain adequate levels of capital and liquidity to
support our operations; the effect of potential future supervisory
action against us or Hanmi Bank; general economic and business
conditions internationally, nationally and in those areas in which
we operate; volatility and deterioration in the credit and equity
markets; changes in consumer spending, borrowing and savings
habits; availability of capital from private and government
sources; demographic changes; competition for loans and deposits
and failure to attract or retain loans and deposits; fluctuations
in interest rates and a decline in the level of our interest rate
spread; risks of natural disasters related to our real estate
portfolio; risks associated with Small Business Administration
loans; failure to attract or retain key employees; changes in
governmental regulation, including, but not limited to, any
increase in FDIC insurance premiums; ability of Hanmi Bank to make
distributions to Hanmi Financial, which is restricted by certain
factors, including Hanmi Bank’s retained earnings, net income,
prior distributions made, and certain other financial tests;
ability to identify a suitable strategic partner or to consummate a
strategic transaction; adequacy of our allowance for loan losses;
credit quality and the effect of credit quality on our provision
for loan losses and allowance for loan losses; changes in the
financial performance and/or condition of our borrowers and the
ability of our borrowers to perform under the terms of their loans
and other terms of credit agreements; our ability to control
expenses; and changes in securities markets. In addition, we set
forth certain risks in our reports filed with the U.S. Securities
and Exchange Commission, including, Item 1A of our Annual Report on
Form 10-K for the year ended December 31, 2015, our Quarterly
Reports on Form 10-Q, and Current Reports on Form 8-K that we will
file hereafter, which could cause actual results to differ from
those projected. We undertake no obligation to update such
forward-looking statements except as required by law.
Investor Contacts:Romolo (Ron) SantarosaSenior
Executive Vice President & Chief Financial
Officer213-427-5636
Lasse GlassenInvestor RelationsAddo Investor
Relations310-829-5400
Transaction Summary
- Hanmi Financial Corporation (NASDAQ:HAFC) (“Hanmi”), the
holding company for Hanmi Bank (the “Bank”), today announced the
Bank has acquired the Commercial Specialty Finance (“CSF”) unit of
Irvine, California-based Banc of California (NYSE:BANC) at a gross
purchase price premium of 2.25% of the outstanding balances
acquired
- As of September 30, 2016, CSF had gross lease receivables of
$258 million, or net lease receivables of $234 million with an
average yield of approximately 6%. Hanmi will retain
substantially all existing employees to continue to operate and
manage the portfolio
- The portfolio, with an average lease size of approximately $73
thousand, is predominately concentrated in the West, Southwest, and
Southeast with Hanmi’s home state of California accounting for the
largest portion at 30% and Texas next at 9%. Moreover, the
portfolio includes a variety of industries, with transportation and
healthcare representing the largest segments
- Since its inception in 2012, the portfolio has benefited from a
strong credit culture with limited delinquencies and
charge-offs. As of mid-year 2016, historical four and a half
year cumulative net charge-offs represented 59 basis points of the
aggregate amount financed
- CSF diversifies Hanmi’s loan portfolio and, with the addition
of its experienced team, expands the Bank’s lending capabilities
and augments its revenue sources
- Financially, Hanmi projects the transaction to result in EPS
accretion of approximately $0.20 per diluted share in 2017, a
modest tangible book value earn-back period of approximately one
and a half years, and continued robust pro forma capital ratios
that will support further growth opportunities
- Hanmi anticipates recording a 1.20% credit and interest rate
mark on the acquired portfolio
- Post transaction, commercial real estate loans as a percentage
of Hanmi’s total loan portfolio will decline from 80% to 75%.
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