Hanmi Financial Corporation (NASDAQ: HAFC) (“we,” “our” or
“Hanmi”), the holding company for Hanmi Bank (the “Bank”), reported
a fourth-quarter net loss of $35.9 million, or ($0.70) per share,
primarily driven by $77 million in credit loss provisions, compared
to a net loss of $3.8 million, or ($0.08) per share, in the
comparable period a year ago.
For the year ended December 31, 2009, Hanmi reported a net loss
of $122.3 million, or ($2.57) per share, mainly due to $196.4
million in credit loss provisions, compared to a net loss of $102.1
million, or ($2.23) per share, for the year ended December 31,
2008. In 2008, there was a non-cash impairment loss on goodwill of
$107.4 million, for which there was no comparable loss in 2009.
“Over the past year, we achieved a number of positive changes in
what continues to be a very difficult economic environment,” said
Jay S. Yoo, Hanmi’s President and Chief Executive Officer. “Most
notably, we have made significant progress in strengthening our
loan monitoring and loan review departments, maintaining
appropriate loan loss reserves in anticipation of asset
deterioration, managing our liquidity, and enhancing our net
interest margin.”
“Notwithstanding these improvements, our focus during the first
half of 2010 will be to fully comply with previously announced
regulatory requirements by further strengthening our capital
position, improving asset quality, and enhancing liquidity. Our
highest priority during the next few months will be to raise
sufficient capital, executing our strategic plan to comply with
regulatory requirements.
“To enhance liquidity, we will continue our efforts to reduce
our illiquid assets as well as further increase our core deposits
through product features and upgraded customer service. With the
expectation of substantial progress in achieving these goals along
with a successful capital raise,” concluded Mr. Yoo, “we will
strive to be back in position for organic growth.”
Results of Operations
Net interest income before provision for credit losses increased
by $1.9 million, or 7.3 percent, to $28.4 million in the fourth
quarter of 2009 as compared with $26.5 million in the prior quarter
as the $1.9 million decrease in interest and fees on loans was more
than offset by a $4.5 million decrease in total interest expense.
For the full year 2009, net interest income before provision for
credit losses decreased by $33.2 million, or 24.7 percent, to
$101.2 million, as compared with $134.4 million in the prior
year.
The average yield on the loan portfolio was 5.54 percent in the
fourth quarter of 2009, an increase of four basis points compared
to 5.50 percent in the third quarter. Thanks to our proper
management of high-cost time deposits that were offered through
early 2009 and matured in the fourth quarter, combined with an
overall decline of deposit rates in our community, the cost of
average interest-bearing deposits was 2.26 percent, a decrease of
44 basis points compared to 2.70 percent in the third quarter.
Consistent with this trend, net interest margin was 3.46 percent in
the fourth quarter of 2009, an increase of 46 basis points compared
to 3.00 percent in the third quarter.
The provision for credit losses in the fourth quarter of 2009
increased by $27.5 million to $77.0 million, compared to $49.5
million in the prior quarter, due mainly to the increase in our
historical loss ratios used in the allowance for loan losses
migration analysis which was the result of our increase in
charge-offs in recent quarters. The charge-offs of impaired loans
for the deficiency of collateral in this weakening commercial real
estate (“CRE”) market also contributed to the increase. For the
full year, the provision for credit losses was $196.4 million
compared to $75.7 million in 2008.
Total non-interest income in the fourth quarter of 2009 was $7.8
million as compared with $8.2 million in the third quarter of 2009
and $7.4 million in the fourth quarter of 2008. The decrease in
non-interest income from the third quarter is mainly attributable
to the overall decrease in service charges in the slowed economy.
Consistent with our balance sheet deleveraging strategy, we
continued to sell SBA loans and recognized a $354,000 gain in the
fourth quarter, as compared with $864,000 in the prior quarter. In
the fourth quarter, we also sold investment securities, mainly
municipal bonds, for risk management purposes, and recorded a net
gain of $665,000. For the full year 2009, total non-interest income
was $32.1 million, a decrease of $39,000, or 0.1 percent, from the
prior year.
Total non-interest expense in the fourth quarter of 2009 was
$22.7 million as compared with $23.7 million in the third quarter,
a decrease of $979,000, or 4.1 percent, from the prior quarter. A
major contributor to the sequential decrease in fourth-quarter
non-interest expense was a decrease of $2.5 million in other real
estate owned expenses, partially offset by an increase of $1.0
million in deposit insurance premiums and regulatory assessments.
For the full year 2009, total non-interest expense was $90.4
million compared to $194.3 million in 2008. The 2008 expense
included a $107.4 million impairment loss on goodwill.
With the aforementioned decreases in non-interest expense and
non-interest income and the increase in net interest income before
provision for credit losses, the fourth-quarter 2009 efficiency
ratio (non-interest expense divided by the sum of net interest
income before provision for credit losses and non-interest income)
was 62.6 percent, as compared with 68.2 percent in the third
quarter and 55.5 percent in the comparable period a year ago.
Balance Sheet and Asset Quality
Reflecting the Bank’s ongoing program to de-leverage the balance
sheet, at December 31, 2009, total assets decreased by $294.8
million, or 8.5 percent, to $3.16 billion as compared with $3.46
billion at September 30, 2009, and decreased by $713.1 million, or
18.4 percent, in comparison to $3.88 billion at December 31,
2008.
Gross loans, net of deferred loan fees, decreased by $158.4
million, or 5.3%, to $2.82 billion as of December 31, 2009,
compared with $2.98 billion at September 30, 2009, and decreased by
$543 million, or 16.2%, as compared with $3.36 billion at December
31, 2008. The bulk of the decrease relative to the prior
quarter-end is attributable to the stringent lending policy
implementing selective loan renewals in addition to sale of loans
and charge-offs.
Total deposits decreased by $242.5 million, or 8.1 percent, to
$2.75 billion at December 31, 2009 compared to $2.99 billion at
September 30, 2009, and decreased by $320.8 million, or 10.4
percent, compared to $3.07 billion at December 31, 2008. The
decrease in total deposits compared to the previous quarter-end
reflects a reduction in brokered deposits of $188.4 million and a
reduction in Freedom CDs of $114.3 million. FHLB advances also
decreased by $6.8 million.
Fourth-quarter charge-offs, net of recoveries, were $57.3
million compared to $29.9 million in the prior quarter and $18.6
million in the fourth quarter of 2008. Fourth-quarter charge-offs
include a partial charge-off in the amount of $4.6 million on a
construction loan to a senior housing project as a result of a
decrease in collateral value; investment property loan charge-offs
totaling $13.5 million; and other commercial term loan charge-offs
totaling $30.3 million, which includes partial charge-offs from
owner-occupied and single-tenant property loans. The remaining
charge-offs of approximately $9 million consist of consumer,
international, and SBA loans as well as commercial lines of credit.
For the full year 2009, charge-offs, net of recoveries, were $122.6
million compared to $46.0 million in 2008.
At December 31, 2009, the allowance for loan losses was $145.0
million, or 5.14 percent of total gross loans (66.19 percent of
total non-performing loans), compared to $71.0 million, or 2.11
percent of total gross loans (58.23 percent of total non-performing
loans), at December 31, 2008. At September 30, 2009, the allowance
for loan losses was $124.8 million, or 4.19 percent of total gross
loans (71.53 percent of total non-performing loans). The increase
in the allowance for loan losses was mainly due to an increase in
quantitative reserves to $90.1 million from $61.1 million at
September 30, 2009. The increase in the quantitative allowance was
partially offset by a decrease in impaired reserves to $23.1
million from $36.7 million at September 30, 2009 as a result of
increased charge-offs. Qualitative allowance slightly increased to
$31.6 million from $26.6 million at the end of the third
quarter.
Delinquent loans were $186.3 million (6.60 percent of total
gross loans) at December 31, 2009, compared to $151.0 million (5.07
percent of total gross loans) at September 30, 2009, and $128.5
million (3.82 percent of total gross loans) at December 31, 2008.
Contributing to the increase in delinquent loans were an increase
in delinquencies of owner-occupied business property loans as well
as an increase in delinquencies of SBA loans. Delinquencies from
these two loan categories increased by approximately $18.0 million
and $13.5 million, respectively, quarter-over-quarter.
Non-performing loans (“NPL”) at December 31, 2009 were $219.1
million (7.77 percent of total gross loans), compared with $174.4
million at September 30, 2009 (5.85 percent of total gross loans),
and $121.9 million (3.62 percent of total gross loans) at December
31, 2008. The majority of the quarter-over-quarter increase in
non-performing loans is attributable to an increase of
approximately $20.7 million in NPLs from income-producing
commercial property loans, and an increase of approximately $17.8
million in NPLs from owner-occupied business property loans.
Non-performing SBA loans also increased by approximately $7.5
million compared to the prior quarter. Non-performing loans at
December 31, 2009 consisted of 5.7 percent construction loans, 46.9
percent commercial and industrial (“C&I”) loans including
owner/user occupied business property loans, 26.9 percent CRE
loans, 16.3 percent SBA loans, 3.0 percent consumer loans, and the
remaining 1.2 percent consisting of commercial lines of credit and
international loans. Of the total NPL of $219.1 million, $74.0
million, or 33.8 percent, is current at December 31, 2009. Of the
total NPL of $174.4 million, $51.9 million, or 29.8%, was current
at September 30, 2009. Of the current NPL of $74.0 million, $35.7
million was moved to non-accrual status from accrual status due to
shortfalls in collateral with negative cash flow; and of the $35.7
million that moved to non-accrual status, $7.9 million was
restructured and identified as troubled debt restructured
loans.
As of December 31, 2009, total non-performing assets of $245.4
million included other real estate owned assets (“OREO”) of $26.3
million compared with total non-performing assets of $201.6 million
with OREO of $27.1 million at September 30, 2009, and total
non-performing assets of $122.7 million with OREO of $823,000 at
December 31, 2008.
The aggregate net OREO balance has shown a decreasing trend
since the second quarter of 2009. The net balance decreased from
$34.0 million at June 30, 2009 to $27.1 million at September 30,
2009. The balance further decreased to $26.3 million at December
31, 2009.
Capital Adequacy
The Bank’s capital ratios exceed levels defined as “adequately
capitalized” by our regulators. At December 31, 2009, the Bank’s
Tier 1 Leverage, Tier 1 Risk-Based Capital and Total Risk-Based
Capital Ratio were 6.69 percent, 7.77 percent, and 9.07 percent,
respectively, compared to 7.05 percent, 8.40 percent and 9.69
percent, respectively, at September 30, 2009. The Bank’s ratio of
tangible shareholders’ equity to total tangible assets for the
fourth quarter was 7.13 percent compared to 7.57 percent at
September 30, 2009.
About Hanmi Financial Corporation
Headquartered in Los Angeles, Hanmi Bank, a wholly-owned
subsidiary of Hanmi Financial Corporation, provides services to the
multi-ethnic communities of California, with 27 full-service
offices in Los Angeles, Orange, San Bernardino, San Francisco,
Santa Clara and San Diego counties, and a loan production office in
Washington State. Hanmi Bank specializes in commercial, SBA and
trade finance lending, and is a recognized community leader. Hanmi
Bank’s mission is to provide a full range of quality products and
premier services to its customers and to maximize shareholder
value. Additional information is available at www.hanmi.com.
Forward-Looking Statements
This 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.
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
regulatory orders we have entered into and 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
(“SBA”) loans; failure to attract or retain key employees; changes
in governmental regulation, including, but not limited to, any
increase in FDIC insurance premiums; ability to receive regulatory
approval for Hanmi Bank to declare dividends to Hanmi Financial;
adequacy of our allowance for loan losses, credit quality and the
effect of credit quality on our provision for credit 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 successfully integrate acquisitions we
may make; our ability to control expenses; and changes in
securities markets. In addition, we set forth certain risks in our
reports filed with the Securities and Exchange Commission,
including our Annual Report on Form 10-K for the fiscal year ended
December 31, 2008 and current and periodic reports filed with the
Securities and Exchange Commission thereafter, which could cause
actual results to differ from those projected. You should
understand that it is not possible to predict or identify all such
risks. Consequently, you should not consider such disclosures to be
a complete discussion of all potential risks or uncertainties. We
undertake no obligation to update such forward-looking statements
except as required by law.
HANMI FINANCIAL CORPORATION AND SUBSIDIARIES CONDENSED
CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Dollars in Thousands)
December 31,
September 30,
%
December 31, %
2009 2009
Change 2008 Change
ASSETS
Cash and Due from Banks $ 55,263 $ 57,727 (4.3 )% $ 83,933
(34.2 )% Interest-Bearing Deposits in Other Banks 98,847 155,607
(36.5 )% 2,014 4,808.0 % Federal Funds Sold
—
— —
130,000 (100.0 )%
Cash and Cash Equivalents
154,110
213,334 (27.8
)% 215,947
(28.6 )% Investment Securities
133,289 205,901 (35.3 )% 197,117 (32.4 )% Loans: Gross
Loans, Net of Deferred Loan Fees 2,819,060 2,977,504 (5.3 )%
3,362,111 (16.2 )% Allowance for Loan Losses
(144,996 ) (124,768
) 16.2 %
(70,986 ) 104.3
% Loans Receivable, Net
2,674,064 2,852,736
(6.3 )% 3,291,125
(18.7 )% Due from Customers
on Acceptances 994 1,859 (46.5 )% 4,295 (76.9 )% Premises and
Equipment, Net 18,657 19,302 (3.3 )% 20,279 (8.0 )% Accrued
Interest Receivable 9,492 11,389 (16.7 )% 12,347 (23.1 )% Other
Real Estate Owned, Net 26,306 27,140 (3.1 )% 823 3,096.4 % Deferred
Income Taxes, Net — 2,464 (100.0 )% 29,456 (100.0 )% Servicing
Assets 3,842 3,957 (2.9 )% 3,791 1.3 % Other Intangible Assets, Net
3,382 3,736 (9.5 )% 4,950 (31.7 )% Investment in Federal Home Loan
Bank Stock, at Cost 30,697 30,697 — 30,697 — Investment in Federal
Reserve Bank Stock, at Cost 7,878 10,053 (21.6 )% 10,228 (23.0 )%
Bank-Owned Life Insurance 26,408 26,171 0.9 % 25,476 3.7 % Income
Taxes Receivable 60,162 34,908 72.3 % 11,712 413.7 % Other Assets
13,425 13,843
(3.0 )% 17,573
(23.6 )% TOTAL ASSETS
$ 3,162,706
$ 3,457,490
(8.5 )% $
3,875,816 (18.4
)%
LIABILITIES AND STOCKHOLDERS’
EQUITY
Liabilities: Deposits: Noninterest-Bearing $ 556,306 $
561,548 (0.9 )% $ 536,944 3.6 % Interest-Bearing
2,193,021 2,430,312
(9.8 )% 2,533,136
(13.4 )% Total Deposits
2,749,327 2,991,860 (8.1 )% 3,070,080 (10.4 )% Accrued
Interest Payable 12,606 19,730 (36.1 )% 18,539 (32.0 )% Bank
Acceptances Outstanding 994 1,859 (46.5 )% 4,295 (76.9 )% Federal
Home Loan Bank Advances 153,978 160,828 (4.3 )% 422,196 (63.5 )%
Other Borrowings 1,747 1,496 16.8 % 787 122.0 % Junior Subordinated
Debentures 82,406 82,406 — 82,406 — Accrued Expenses and Other
Liabilities
11,904
12,191 (2.4 )%
13,598 (12.5 )%
Total Liabilities 3,012,962 3,270,370 (7.9 )% 3,611,901
(16.6 )% Stockholders’ Equity
149,744
187,120 (20.0
)% 263,915
(43.3 )% TOTAL LIABILITIES AND
STOCKHOLDERS’ EQUITY $
3,162,706 $
3,457,490 (8.5
)% $ 3,875,816
(18.4 )% HANMI
FINANCIAL CORPORATION AND SUBSIDIARIES CONSOLIDATED
STATEMENTS OF OPERATIONS (UNAUDITED)
(Dollars in Thousands, Except Per
Share Data)
Three Months Ended
Year Ended Dec. 31, Sept.
30, %
Dec. 31, %
Dec. 31,
Dec. 31, %
2009
2009 Change
2008 Change
2009 2008
Change INTEREST AND DIVIDEND INCOME: Interest and Fees
on Loans $ 40,810 $ 42,705 (4.4 )% $ 51,305 (20.5 )% $ 173,318 $
223,942 (22.6 )% Taxable Interest on Investment Securities
1,414
1,541 (8.2 )% 1,644 (14.0 )% 5,675 9,387 (39.5 )% Tax-Exempt
Interest on Investment Securities 432 607 (28.8 )% 646 (33.1 )%
2,303 2,717 (15.2 )% Interest on Term Federal Funds Sold 30 293
(89.8 )% 43 (30.2 )% 1,718 43 3,895.3 % Dividends on Federal
Reserve Bank Stock 136 150 (9.3 )% 164 (17.1 )% 592 692 (14.5 )%
Interest on Federal Funds Sold and Securities Purchased Under
Resale Agreements 65 67 (3.0 )% 29 124.1 % 326 166 96.4 % Interest
on Interest-Bearing Deposits in Other Banks 70 68 2.9 % 5 1,300.0 %
151 10 1,410.0 % Dividends on Federal Home Loan Bank Stock
— 64
(100.0 )% 273
(100.0 )% 64
1,226 (94.8 )%
Total Interest and Dividend Income
42,957
45,495 (5.6
)% 54,109
(20.6 )% 184,147
238,183 (22.7
)% INTEREST EXPENSE: Interest on Deposits
13,410 17,365 (22.8 )% 19,654 (31.8 )% 76,246 84,353 (9.6 )%
Interest on Federal Home Loan Bank Advances 412 865 (52.4 )% 2,621
(84.3 )% 3,399 14,027 (75.8 )% Interest on Junior Subordinated
Debentures 690 747 (7.6 )% 1,293 (46.6 )% 3,271 5,056 (35.3 )%
Interest on Other Borrowings
—
— — 2
(100.0 )% 2
346 (99.4
)% Total Interest Expense
14,512
18,977 (23.5
)% 23,570
(38.4 )% 82,918
103,782 (20.1
)% NET INTEREST INCOME BEFORE PROVISION FOR
CREDIT LOSSES 28,445 26,518 7.3 % 30,539 (6.9 )% 101,229 134,401
(24.7 )% — — — Provision for Credit Losses
77,000 49,500
55.6 % 25,450
202.6 % 196,387
75,676 159.5
% NET INTEREST INCOME (LOSS) AFTER PROVISION
FOR CREDIT LOSSES
(48,555 )
(22,982 ) 111.3
% 5,089
(1,054.1 )% (95,158
) 58,725
(262.0 )% NON-INTEREST INCOME:
Service Charges on Deposit Accounts 4,022 4,275 (5.9 )% 4,559 (11.8
)% 17,054 18,463 (7.6 )% Insurance Commissions 1,062 1,063 (0.1 )%
1,174 (9.5 )% 4,492 5,067 (11.3 )% Remittance Fees 530 511 3.7 %
651 (18.6 )% 2,109 2,194 (3.9 )% Trade Finance Fees 439 512 (14.3
)% 614 (28.5 )% 1,956 3,088 (36.7 )% Other Service Charges and Fees
371 489 (24.1 )% 513 (27.7 )% 1,810 2,365 (23.5 )% Net Gain on
Sales of Loans 354 864 (59.0 )% — — 1,220 765 59.5 % Bank-Owned
Life Insurance Income 237 234 1.3 % 237 — 932 952 (2.1 )% Gain on
Sales of Investment Securities 1,050 — — — — 2,327 618 276.5 % Loss
on Sales of Investment Securities (385 ) — — (58 ) 563.8 % (494 )
(541 ) (8.7 )% Other-Than-Temporary Impairment Loss on Investment
Securities — — — — — — (2,410 ) (100.0 )% Other Operating Income
(Loss)
159 265
(40.0 )% (286
) (155.6 )%
704 1,588
(55.7 )% Total Non-Interest Income
7,839 8,213
(4.6 )% 7,404
5.9 % 32,110
32,149 (0.1 )%
NON-INTEREST EXPENSE: Salaries and Employee Benefits 8,442
8,648 (2.4 )% 8,846 (4.6 )% 33,101 42,209 (21.6 )% Occupancy and
Equipment 2,733 2,834 (3.6 )% 2,798 (2.3 )% 11,239 11,158 0.7 %
Deposit Insurance Premiums and Regulatory Assessments 2,998 2,001
49.8 % 1,615 85.6 % 10,418 3,713 180.6 % Data Processing 1,606
1,608 (0.1 )% 1,069 50.2 % 6,297 5,799 8.6 % Other Real Estate
Owned Expense 873 3,372 (74.1 )% 249 250.6 % 5,890 390 1,410.3 %
Professional Fees 1,354 1,239 9.3 % 912 48.5 % 4,099 3,539 15.8 %
Advertising and Promotion 762 447 70.5 % 904 (15.7 )% 2,402 3,518
(31.7 )% Supplies and Communications 580 603 (3.8 )% 510 13.7 %
2,352 2,518 (6.6 )% Loan-Related Expense 357 192 85.9 % 221 61.5 %
1,947 790 146.5 % Amortization of Other Intangible Assets 354 379
(6.6 )% 454 (22.0 )% 1,568 1,958 (19.9 )% Other Operating Expenses
2,651 2,366 12.0 % 3,478 (23.8 )% 11,041 11,337 (2.6 )% Impairment
Loss on Goodwill
— —
— —
— —
107,393 (100.0 )%
Total Non-Interest Expense
22,710
23,689 (4.1 )%
21,056 7.9 %
90,354 194,322
(53.5 )% LOSS BEFORE PROVISION
(BENEFIT) FOR INCOME TAXES (63,426 ) (38,458 ) 64.9 % (8,563 )
640.7 % (153,402 ) (103,448 ) 48.3 % Provision (Benefit) for Income
Taxes
(27,545 )
21,207 (229.9 )%
(4,748 ) 480.1
% (31,125 )
(1,355 ) 2,197.0
% NET LOSS $
(35,881 )
$ (59,665
) (39.9 )%
$ (3,815
) 840.5 %
$ (122,277
) $
(102,093 )
19.8 % LOSS PER SHARE:
Basic $ (0.70 ) $ (1.26 ) (44.4 )% $ (0.08 ) 775.0 % $ (2.57 ) $
(2.23 ) 15.2 % Diluted $ (0.70 ) $ (1.26 ) (44.4 )% $ (0.08 ) 775.0
% $ (2.57 ) $ (2.23 ) 15.2 %
WEIGHTED-AVERAGE SHARES
OUTSTANDING: Basic 50,998,103 47,413,141 45,884,462 47,570,361
45,872,541 Diluted 50,998,103 47,413,141 45,884,462 47,570,361
45,872,541
SHARES OUTSTANDING AT PERIOD-END
51,182,390 51,201,390 45,905,549 51,182,390 45,905,549
HANMI FINANCIAL CORPORATION AND SUBSIDIARIES
SELECTED FINANCIAL DATA (UNAUDITED) (Dollars in Thousands)
Three Months Ended Year
Ended
December 31,
September 30,
%
December 31,
%
December 31, December 31, %
2009 2009
Change 2008 Change
2009 2008
Change AVERAGE BALANCES: Average Gross
Loans, Net of Deferred Loan Fees $ 2,924,722 $ 3,078,104 (5.0 )% $
3,366,601 (13.1 )% $ 3,157,133 $ 3,332,133 (5.3 )% Average
Investment Securities 182,635 209,021 (12.6 )% 205,305 (11.0 )%
188,325 271,802 (30.7 )% Average Interest-Earning Assets 3,291,042
3,552,698 (7.4 )% 3,637,232 (9.5 )% 3,611,009 3,653,720 (1.2 )%
Average Total Assets 3,356,383 3,672,253 (8.6 )% 3,789,435 (11.4 )%
3,717,179 3,866,856 (3.9 )% Average Deposits 2,914,794 3,100,419
(6.0 )% 2,879,674 1.2 % 3,109,322 2,913,171 6.7 % Average
Borrowings 244,704 297,455 (17.7 )% 602,838 (59.4 )% 341,514
591,930 (42.3 )% Average Interest-Bearing Liabilities 2,598,520
2,844,821 (8.7 )% 2,913,723 (10.8 )% 2,909,014 2,874,470 1.2 %
Average Stockholders’ Equity 164,767 232,136 (29.0 )% 271,544 (39.3
)% 225,708 323,462 (30.2 )% Average Tangible Equity 161,169 228,169
(29.4 )% 266,333 (39.5 )% 221,537 264,490 (16.2 )%
PERFORMANCE RATIOS (Annualized): Return on Average Assets
(4.24 )% (6.45 )% (0.40 )% (3.29 )% (2.64 )% Return on Average
Stockholders’ Equity (86.40 )% (101.97 )% (5.59 )% (54.17 )% (31.56
)% Return on Average Tangible Equity (88.33 )% (103.75 )% (5.70 )%
(55.19 )% (38.60 )% Efficiency Ratio 62.59 % 68.21 % 55.49 % 67.76
% 116.67 %
Net Interest Spread(1)
2.99 % 2.47 % 2.74 % 2.28 % 2.95 %
Net Interest Margin(1)
3.46 % 3.00 % 3.38 % 2.84 % 3.72 %
ALLOWANCE FOR
LOAN LOSSES: Balance at Beginning of Period $ 124,768 $ 105,268
18.5 % $ 63,948 95.1 % $ 70,986 $ 43,611 62.8 % Provision Charged
to Operating Expense 77,540 49,375 57.0 % 25,660 202.2 % 196,607
73,345 168.1 % Charge-Offs, Net of Recoveries
(57,312 ) (29,875
) 91.8 %
(18,622 ) 207.8
% (122,597 )
(45,970 ) 166.7
% Balance at End of Period
$
144,996 $ 124,768
16.2 % $
70,986 104.3 %
$ 144,996 $
70,986 104.3 %
Allowance for Loan Losses to Total Gross Loans 5.14 % 4.19 % 2.11 %
5.14 % 2.11 % Allowance for Loan Losses to Total Non-Performing
Loans 66.19 % 71.53 % 58.23 % 66.19 % 58.23 %
ALLOWANCE FOR OFF-BALANCE SHEET ITEMS: Balance at Beginning
of Period $ 4,416 $ 4,291 2.9 % $ 4,306 2.6 % $ 4,096 $ 1,765 132.1
% Provision Charged to Operating Expense
(540
) 125 (532.0
)% (210 )
153.3 % (220
) 2,331 (109.4
)% Balance at End of Period
$
3,876 $ 4,416
(12.2 )% $
4,096 (5.4 )%
$ 3,876 $
4,096 (5.4 )%
(1) Amounts calculated on a fully
taxable equivalent basis using the current statutory federal tax
rate.
December 31,
September 30,
%
December 31,
%
2009
2009
Change
2008
Change
NON-PERFORMING ASSETS: Non-Accrual Loans $ 219,000 $
174,363 25.6 % $ 120,823 81.3 % Loans 90 Days or More Past Due and
Still Accruing
67 64
4.7 % 1,075
(93.8 )% Total Non-Performing
Loans 219,067 174,427 25.6 % 121,898 79.7 % Other Real Estate
Owned, Net
26,306
27,140 (3.1 )%
823 3,096.4 % Total
Non-Performing Assets
$ 245,373
$ 201,567 21.7
% $ 122,721
99.9 % Total Non-Performing
Loans/Total Gross Loans 7.77 % 5.85 % 3.62 % Total Non-Performing
Assets/Total Assets 7.76 % 5.83 % 3.17 % Total Non-Performing
Assets/Allowance for Loan Losses 169.2 % 161.6 % 172.9 %
DELINQUENT LOANS $ 186,257
$ 151,047 23.3
% $ 128,469
45.0 % Delinquent Loans/Total
Gross Loans 6.60 % 5.07 % 3.82 %
LOAN PORTFOLIO: Real
Estate Loans $ 1,043,097 $ 1,086,735 (4.0 )% $ 1,180,114 (11.6 )%
Commercial and Industrial Loans 1,714,212 1,824,042 (6.0 )%
2,099,732 (18.4 )% Consumer Loans
63,303
68,537 (7.6 )%
83,525 (24.2
)% Total Gross Loans 2,820,612 2,979,314 (5.3 )%
3,363,371 (16.1 )% Deferred Loan Fees
(1,552
) (1,810 )
(14.3 )% (1,260
) 23.2 % Gross Loans, Net of
Deferred Loan Fees 2,819,060 2,977,504 (5.3 )% 3,362,111 (16.2 )%
Allowance for Loan Losses
(144,996
) (124,768 )
16.2 % (70,986
) 104.3 % Loans Receivable,
Net
$ 2,674,064 $
2,852,736 (6.3 )%
$ 3,291,125 (18.7
)% LOAN MIX: Real Estate Loans 37.0 %
36.5 % 35.1 % Commercial and Industrial Loans 60.8 % 61.2 % 62.4 %
Consumer Loans
2.2 %
2.3 % 2.5
% Total Gross Loans
100.0
% 100.0 %
100.0 % DEPOSIT PORTFOLIO:
Demand - Noninterest-Bearing $ 556,306 $ 561,548 (0.9 )% $ 536,944
3.6 % Savings 111,172 98,019 13.4 % 81,869 35.8 % Money Market
Checking and NOW Accounts 685,858 723,585 (5.2 )% 370,401 85.2 %
Time Deposits of $100,000 or More 815,190 845,318 (3.6 )% 849,800
(4.1 )% Other Time Deposits
580,801
763,390 (23.9
)% 1,231,066
(52.8 )% Total Deposits
$
2,749,327 $ 2,991,860
(8.1 )% $
3,070,080 (10.4 )%
DEPOSIT MIX: Demand - Noninterest-Bearing 20.2 % 18.8
% 17.5 % Savings 4.0 % 3.3 % 2.7 % Money Market Checking and NOW
Accounts 24.9 % 24.2 % 12.1 % Time Deposits of $100,000 or More
29.7 % 28.3 % 27.7 % Other Time Deposits
21.2
% 25.4 %
40.0 % Total Deposits
100.0 % 100.0
% 100.0 %
CAPITAL RATIOS (Bank Only): Total Risk-Based 9.07 % 9.69 %
10.71 % Tier 1 Risk-Based 7.77 % 8.40 % 9.44 % Tier 1 Leverage 6.69
% 7.05 % 8.85 %
HANMI FINANCIAL CORPORATION AND
SUBSIDIARIES AVERAGE BALANCES, AVERAGE YIELDS EARNED AND
AVERAGE RATES PAID (UNAUDITED) (Dollars in Thousands)
Three Months Ended Year
Ended December 31, 2009
September 30, 2009
December 31,
2008
December 31, 2009 December 31,
2008
AverageBalance
Interest
Income/Expense
Average
Yield/Rate
AverageBalance
Interest
Income/Expense
Average
Yield/Rate
AverageBalance
Interest
Income/Expense
Average
Yield/Rate
AverageBalance
Interest
Income/Expense
Average
Yield/Rate
AverageBalance
Interest
Income/Expense
Average
Yield/Rate
INTEREST-EARNING ASSETS Loans: Real Estate
Loans: Commercial Property $ 861,831 $ 11,872 5.47 % $ 887,028 $
12,051 5.39 % $ 902,367 $ 14,074 6.20 % $ 894,408 $ 49,901 5.58 % $
841,526 $ 56,968 6.77 % Construction 130,400 1,342 4.08 % 138,340
1,464 4.20 % 186,080 1,881 4.02 % 156,619 5,947 3.80 % 202,879
9,962 4.91 % Residential Property
80,257
997 4.93 %
83,387 1,050
5.00 % 91,366
1,174 5.11 %
85,228 4,329
5.08 % 90,395
4,758 5.26 % Total
Real Estate Loans 1,072,488 14,211 5.26 % 1,108,755 14,565 5.21 %
1,179,813 17,129 5.78 % 1,136,255 60,177 5.30 % 1,134,800 71,688
6.32 % Commercial and Industrial Loans 1,787,795 25,472 5.65 %
1,897,321 26,863 5.62 % 2,104,820 32,691 6.18 % 1,947,669 108,346
5.56 % 2,112,421 145,107 6.87 % Consumer Loans
66,074 965
5.79 % 73,670
1,084 5.84 %
83,411 1,353
6.45 % 74,700
4,310 5.77 %
86,787 6,142
7.08 % Total Gross Loans 2,926,357 40,648
5.51 % 3,079,746 42,512 5.48 % 3,368,044 51,173 6.04 % 3,158,624
172,833 5.47 % 3,334,008 222,937 6.69 % Prepayment Penalty Income —
162 — —
193
—
— 132 — — 485 — — 1,005 — Unearned Income on Loans, Net of Costs
(1,635 ) —
—
(1,642 ) —
— (1,443 )
— —
(1,491 ) —
— (1,875 )
— — Gross Loans, Net
2,924,722
40,810 5.54
% 3,078,104
42,705 5.50
% 3,366,601
51,305 6.06
% 3,157,133
173,318 5.49
% 3,332,133
223,942 6.72
% Investment Securities:
Municipal Bonds(1)
41,653 665 6.39 % 58,179 933 6.41 % 59,718 994 6.66 % 54,448 3,543
6.51 % 63,918 4,180 6.54 % U.S. Government Agency Securities 36,500
437 4.79 % 37,969 431 4.54 % 21,720 201 3.70 % 24,417 1,108 4.54 %
65,440 2,813 4.35 % Mortgage-Backed Securities 77,354 738 3.82 %
82,429 807 3.92 % 79,821 971 4.87 % 77,627 3,320 4.28 % 87,930
4,217 4.77 % Collateralized Mortgage Obligations 14,312 143 4.00 %
17,066 173 4.05 % 37,853 403 4.26 % 21,365 879 4.11 % 43,842 1,865
4.25 % Corporate Bonds 286 — 0.00 % 401 — 0.00 % 1,688 46 10.90 %
271 — 0.00 % 6,671 333 4.59 % Other Securities
12,530 97 3.10
% 12,977
130 4.01 %
4,505 23 2.04
% 10,197
369 3.62 %
4,001 159 4.73
%
Total Investment
Securities(1)
182,635
2,080 4.56
% 209,021
2,474 4.73
% 205,305
2,638 5.14
% 188,325
9,219 4.90
% 271,802
13,567 4.99
% Other Interest-Earning Assets:
Equity Securities 40,605 136 1.34 % 41,741 214 2.05 % 42,551 437
4.11 % 41,399 656 1.58 % 38,516 1,918 4.98 % Federal Funds Sold and
Securities Purchased Under Resale Agreements 51,713 65 0.50 %
56,568 67 0.47 % 14,410 29 0.80 % 84,363 326 0.39 % 8,934 166 1.86
% Term Federal Funds Sold 8,500 30 1.41 % 90,239 293 1.30 % 7,609
43 2.26 % 95,822 1,718 1.79 % 1,913 43 2.25 % Interest-Bearing
Deposits in Other Banks
82,867
70 0.34 %
77,025 68 0.35
% 756 5
2.65 % 43,967
151 0.34 %
422 10 2.37
% Total Other Interest-Earning Assets
183,685 301
0.66 %
265,573 642
0.97 %
65,326 514
3.15 %
265,551 2,851
1.07 %
49,785 2,137
4.29 %
TOTAL INTEREST-EARNING
ASSETS(1)
$ 3,291,042
$ 43,191
5.21 %
$ 3,552,698
$ 45,821
5.12 %
$ 3,637,232
$ 54,457
5.96 %
$ 3,611,009
$ 185,388
5.13 %
$ 3,653,720
$ 239,646
6.56 %
INTEREST-BEARING LIABILITIES Interest-Bearing
Deposits: Savings $ 104,068 $ 711 2.71 % $ 93,404 $ 585 2.48 %
$ 83,777 $ 506 2.40 % $ 91,089 $ 2,328 2.56 % $ 89,866 $ 2,093 2.33
% Money Market Checking and NOW Accounts 733,063 3,508 1.90 %
629,124 2,998 1.89 % 506,062 3,963 3.12 % 507,619 9,786 1.93 %
618,779 19,909 3.22 % Time Deposits of $100,000 or More 835,726
4,930 2.34 % 983,341 7,447 3.00 % 754,081 8,162 4.31 % 1,051,994
34,807 3.31 % 1,045,968 43,598 4.17 % Other Time Deposits
680,959 4,261
2.48 % 841,497
6,335 2.99 %
966,965 7,023
2.89 % 916,798
29,325 3.20 %
527,927 18,753
3.55 % Total Interest-Bearing
Deposits 2,353,816
13,410 2.26
% 2,547,366
17,365 2.70
% 2,310,885
19,654 3.38
% 2,567,500
76,246 2.97
% 2,282,540
84,353 3.70
% Borrowings: FHLB Advances
160,754 412 1.02 % 213,583 865 1.61 % 518,058 2,620 2.01 % 257,529
3,399 1.32 % 498,875 14,026 2.81 % Other Borrowings 1,544 — 0.00 %
1,466 — 0.00 % 2,374 3 0.50 % 1,579 2 0.13 % 10,649 347 3.26 %
Junior Subordinated Debentures
82,406
690 3.32 %
82,406 747
3.60 % 82,406
1,293 6.24 %
82,406 3,271
3.97 % 82,406
5,056 6.14 % Total
Borrowings 244,704
1,102 1.79
% 297,455
1,612 2.15
% 602,838
3,916 2.58
% 341,514
6,672 1.95
% 591,930
19,429 3.28
% TOTAL INTEREST-BEARING
LIABILITIES $ 2,598,520
$ 14,512
2.22 %
$ 2,844,821
$ 18,977
2.65 %
$ 2,913,723
$ 23,570
3.22 %
$ 2,909,014
$ 82,918
2.85 %
$ 2,874,470
$ 103,782
3.61 %
NET INTEREST INCOME(1)
$ 28,679
$ 26,844
$ 30,887
$ 102,470
$ 135,864
NET INTEREST SPREAD(1)
2.99 %
2.47 %
2.74 %
2.28 %
2.95 %
NET INTEREST MARGIN(1)
3.46 %
3.00 %
3.38 %
2.84 %
3.72 %
(1) Amounts calculated on a fully
taxable equivalent basis using the current statutory federal tax
rate.
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