Hanmi Financial Corporation (Nasdaq:HAFC) (or "Hanmi"), the holding
company for Hanmi Bank (the "Bank"), today reported first quarter
2015 results. For the quarter, net income increased 86.5% to $11.1
million, or $0.35 per diluted share, compared to $5.9 million, or
$0.19 per diluted share, in the fourth quarter 2014 and was up 0.6%
from $11.0 million, or $0.34 per diluted share, in the year-ago
period. In the first quarter 2015, pretax income from continuing
operations grew 125.9% to $18.6 million from $8.2 million in the
fourth quarter 2014 but was down 1.2% from $18.8 million in the
year-ago period.
Mr. C. G. Kum, President and Chief Executive Officer, said, "We
are off to a good start in 2015. First quarter net income of $11.1
million increased 86.5% from the prior quarter driven by a $5.4
million reduction in noninterest expense. We expect ongoing expense
reduction initiatives currently underway will continue to improve
our financial performance as we transform Hanmi into a nationwide
community bank. To this end, we are making good progress
integrating the acquisition of Central Bancorp, Inc. ("CBI") and
building out our asset generating platform in the former CBI
markets. In doing so, we have created a platform that will enable
the Hanmi franchise to generate sustainable growth well into the
future."
Quarterly
Results |
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(In thousands, except per share data) |
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As
of or for the Three Months Ended |
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March 31, |
December 31, |
March 31, |
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2015 |
2014 |
2014 |
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Net income |
$ 11,054 |
$ 5,928 |
$ 10,991 |
Net income per diluted common share |
$ 0.35 |
$ 0.19 |
$ 0.34 |
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Assets |
$ 4,083,887 |
$ 4,232,443 |
$ 3,095,758 |
Loans receivable, net |
$ 2,767,080 |
$ 2,735,832 |
$ 2,221,520 |
Deposits |
$ 3,552,717 |
$ 3,556,746 |
$ 2,506,580 |
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Return on average assets (1) |
1.07% |
0.56% |
1.49% |
Pre-tax, pre-provision earnings on average
assets (1) |
1.61% |
0.88% |
2.11% |
Return on average stockholders' equity
(1) |
9.75% |
5.21% |
10.98% |
Net interest margin |
3.92% |
3.80% |
3.90% |
Net interest margin (excluding purchase
accounting) |
3.30% |
3.24% |
3.90% |
Efficiency ratio |
65.63% |
80.03% |
53.43% |
Efficiency ratio (excluding merger and
integration costs) |
62.30% |
73.39% |
53.18% |
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Tangible common equity to tangible
assets |
11.40% |
10.67% |
13.33% |
Tangible common equity per common share |
$ 14.58 |
$ 14.14 |
$ 12.97 |
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(1) Amount calculated
based on net income from continuing operations. |
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Financial Highlights (at or for the quarter ended March
31, 2015)
- Net interest margin (NIM) improved to 3.92%, an increase of 12
basis points from the prior quarter.
- Reduced noninterest expense by $5.4 million during the quarter,
with the efficiency ratio improving to 65.63% from 80.03% in the
prior quarter; the efficiency ratio excluding merger and
integration costs in the first quarter was 62.30%.
- Gross loans totaled $2.82 billion, up $31.3 million from the
prior quarter; the increase is net of loan payoffs which included
$24.6 million of performing loans with two borrowers that Hanmi
requested to leave the Bank due to heightened risk profiles.
- Noninterest-bearing deposits increased 4.1% to $1.06 billion
representing 30.0% of total deposits.
- A cash dividend of $0.11 per share was paid on April 14, 2015,
an increase of 57.1% from the prior quarter.
Results of Operations
First quarter net interest income before provision for credit
losses improved 0.8% to $37.7 million from $37.4 million in the
preceding quarter and improved 39.0% from $27.1 million in the
first quarter last year. Interest and dividend income increased
0.5% from the preceding quarter and increased 37.2% from the first
quarter a year ago, while interest expense decreased 3.0% from the
preceding quarter and increased 21.8% from the year ago
quarter.
Net interest margin for the first quarter 2015 was 3.92%
compared to 3.80% in the fourth quarter of 2014 and 3.90% in the
year-ago period. The expansion of NIM in the first quarter of 2015
was due to an improved mix of interest earning assets favoring
higher yielding loans and the impact of acquisition accounting.
The following table details the asset yields, liability costs,
spread and margin.
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Three
Months Ended |
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March 31, |
December 31, |
March 31, |
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2015 |
2014 |
2014 |
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Interest-earning assets |
4.33% |
4.21% |
4.36% |
Interest-bearing liabilities |
0.61% |
0.61% |
0.75% |
Net interest spread |
3.72% |
3.60% |
3.61% |
Net interest margin |
3.92% |
3.80% |
3.90% |
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The impact of the CBI acquisition accounting adjustments on core
loan yield, core deposit cost and NIM are summarized in the
following tables.
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Three
Months Ended |
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March 31, |
December
31, |
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2015 |
2014 |
Core loan yield |
4.74% |
4.78% |
Accretion of discount on purchased
loans |
0.61% |
0.54% |
As reported |
5.35% |
5.32% |
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Core deposit cost |
0.62% |
0.63% |
Accretion of time deposits premium |
0.19% |
0.20% |
As reported |
0.43% |
0.43% |
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Three Months
Ended |
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March 31,
2015 |
December 31,
2014 |
|
Amount |
NIM
Impact |
Amount |
NIM
Impact |
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(In thousands) |
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NIM excluding purchase
accounting |
$ 31,762 |
3.30% |
$ 31,891 |
3.24% |
Accretion of discount on Non-PCI
loans |
3,511 |
0.36% |
2,802 |
0.28% |
Accretion of discount on PCI loans |
843 |
0.09% |
963 |
0.10% |
Accretion of time deposits premium |
1,606 |
0.17% |
1,747 |
0.18% |
Amortization of subordinated debentures
discount |
(38) |
-- |
(36) |
-- |
Net impact |
5,922 |
0.62% |
5,476 |
0.56% |
As reported |
$ 37,684 |
3.92% |
$ 37,367 |
3.80% |
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For the first quarter, net interest income, after provision for
credit losses, increased 9.2% to $39.7 million compared to $36.3
million in the fourth quarter 2014 and was up 30.5% from $30.4
million in the first quarter last year. In the first quarter of
2015, Hanmi recorded a negative provision for loan losses of $2.0
million which was net of $414,000 of impairment reserves on PCI
loans. In the preceding quarter, Hanmi recognized $1.0 million of
provision for loan losses, which was comprised entirely of
impairment reserves on PCI loans. In the year ago quarter, Hanmi
recognized a negative provision for loan losses of $3.3
million.
Noninterest income increased 18.4% to $10.6 million for the
first quarter 2015 compared to $9.0 million in the fourth quarter
2014 and increased 71.1% from $6.2 million in the preceding year.
Service charges on deposit accounts were $3.2 million in the first
quarter of 2015, compared to $3.4 million in the fourth quarter of
2014 and $2.5 million in the first quarter last year. Gains on
sales of SBA loans were $1.7 million in the first quarter 2015,
compared to $1.2 million in the fourth quarter 2014 and $547,000 in
the year-ago period. Net gain on sales of investment securities
were $2.2 million in the first quarter of 2015 compared to $159,000
in the fourth quarter of 2014 and $1.4 million in the first quarter
last year. Disposition gains on PCI loans were $881,000 in the
first quarter 2015, compared to $1.4 million in the prior quarter
and no disposition gains in the period a year-ago.
Noninterest expense declined 14.5% to $31.7 million from $37.1
million in the preceding quarter but increased 78.1% from $17.8
million in the first quarter last year. Salary and employee
benefits costs declined 2.4% to $16.4 million compared to $16.8
million in the fourth quarter 2014 but increased 59.7% from $10.3
million in the first quarter of 2014. Merger and integration costs
declined to $1.6 million in the first quarter of 2015 from $3.1
million in the preceding quarter but were up from $85,000 in the
first quarter last year. Professional fees decreased to $2.3
million in the first quarter of 2015 from $4.8 million in the
preceding quarter but were up from $748,000 in the first quarter
last year.
"While we made good progress reducing noninterest expense in the
first quarter, we expect further improvements as the year
progresses. We recently closed three unprofitable legacy CBI
branches and streamlined our operations with staffing reductions
that will result in further expense savings beginning in the second
quarter. As the year progresses, we will continue to reduce costs
and improve profitability," said Mr. Kum.
Hanmi recorded a provision for income taxes of $7.5 million in
the first quarter of 2015, representing an effective tax rate of
40.5%, compared to $2.3 million, representing an effective tax rate
of 28.0%, in the preceding quarter and $7.8 million, representing
an effective rate of 41.7% in the first quarter 2014. The effective
tax rate of 28.0% in the fourth quarter of 2014 was due to the
resolution of certain tax matters.
Balance Sheet
Total assets were $4.08 billion at March 31, 2015, a 3.5%
decrease from $4.23 billion at December 31, 2014 and a 31.9%
increase from $3.10 billion a year ago. The year-over-year
increase in total assets was primarily due to the acquisition of
CBI. The investment portfolio was $858.1 million at March 31,
2015, compared to $1.06 billion as of December 31, 2014 and $521.0
million at March 31, 2014.
"During the quarter we sold $174.7 million of the securities
portfolio and paid-off the $150.0 million of FHLB advances. This is
in line with our previously stated strategy to convert the
securities portfolio acquired from CBI into higher yielding loans
and to lower funding costs," noted Mr. Kum.
Loans receivable, net of allowance for loan losses, were $2.77
billion at March 31, 2015, up 1.1% from $2.74 billion at December
31, 2014 and increased 24.6% from $2.22 billion at March 31,
2014. Loans held for sale at March 31, 2015 totaled $8.7
million, up from $5.5 million at the end of 2014 and $390,000 at
March 31, 2014.
2015 first quarter new loan production (excluding loan purchases
of $44.0 million) totaled $134.9 million. The composition of
the first quarter production was $89.4 million of commercial real
estate loans, $11.8 million of C&I loans, $32.8 million of SBA
loans and $894,000 of consumer loans.
Deposits were $3.55 billion during the first quarter, compared
to $3.56 billion for the preceding quarter and $2.51 billion for
the first quarter of 2014. The cost of deposits was 0.43% in
both the first quarter of 2015 and the fourth quarter of 2014,
compared to 0.52% a year ago.
"We were successful in our ability to improve our deposit mix.
During the first quarter, we achieved a 4.1% increase in
noninterest-bearing deposits compared to the prior quarter. As
a result, noninterest-bearing deposits comprise 30.0% of our total
deposits as of the end of the first quarter, up from 28.8% of total
deposits in the prior quarter. At the same time, we also saw a
1.8% decline in interest-bearing deposits due to the maturity of
rate-sensitive CDs," Mr. Kum noted.
The period-end deposit mix is detailed in the table below.
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March 31, |
December 31, |
March 31, |
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2015 |
2014 |
2014 |
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Demand-noninterest-bearing |
30.0% |
28.8% |
33.0% |
Savings |
3.3% |
3.4% |
4.7% |
Money market checking and NOW accounts |
22.7% |
22.4% |
23.9% |
Time deposits of $100,000 or more |
25.1% |
25.6% |
19.0% |
Other time deposits |
18.9% |
19.8% |
19.4% |
Total deposits |
100.0% |
100.0% |
100.0% |
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At March 31, 2015, stockholders' equity was $467.5 million,
compared to $453.4 million and $413.5 million at December 31, 2014
and March 31, 2014, respectively. Tangible common
stockholders' equity was $465.5 million, or 11.40% of tangible
assets, compared to $451.3 million, or 10.67%, and $412.4 million,
or 13.33%, of tangible assets, at December 31, 2014 and March 31,
2014, respectively. Tangible book value per share was $14.58,
compared to $14.14 and $12.97 at December 31, 2014 and March 31,
2014, respectively. On April 14, 2015, Hanmi paid a cash
dividend of $0.11 per share, an increase of 57.1% from the prior
quarter, representing an aggregate dividend of $3.5 million.
On January 1, 2015, new regulatory capital rules went into
effect. Although the new capital rules reduced our regulatory
capital ratios, Hanmi and the Bank remained well capitalized at
March 31, 2015.
Asset Quality
Nonperforming loans ("NPLs"), excluding PCI loans, were $29.3
million in the first quarter of 2015, or 1.04% of gross loans,
compared to $25.3 million in the fourth quarter of 2014, or 0.91%
of gross loans and $25.0 million, or 1.10% of total loans in the
first quarter last year. Troubled debt restructurings ("TDRs")
totaled $26.0 million at March 31, 2015, compared to $26.3 million
at December 31, 2014 and $24.9 million at March 31, 2014. Of
these TDRs, $14.6 million were included in NPLs at March 31, 2015,
compared to $11.2 million in the same quarter last year.
Other-real-estate-owned ("OREO") totaled $12.1 million at the
end of the first quarter of 2015, down from $15.8 million at the
end of the prior quarter. Hanmi continues to make excellent
progress in reducing OREO, which was primarily acquired as part of
the CBI acquisition. Classified loans were $56.1 million, or
1.99% of gross loans, at March 31, 2015, compared to $47.4 million,
or 1.70% of gross loans, at December 31, 2014 and $52.8 million, or
2.32%, a year ago. The increase in the first quarter is due
primarily to two loans that matured in the first quarter that Hanmi
expects to have fully paid off in 2015. Nonperforming assets
("NPAs") totaled $41.4 million at the end of the first quarter of
2015, or 1.01% of assets, compared to 0.97% of assets in the prior
quarter and 0.81% of assets in the same quarter last year.
In the first quarter of 2015, recoveries of previously
charged-off loans totaled $2.0 million compared to $1.7 million in
the preceding quarter and $4.3 million in the first quarter of
2014. Gross charge-offs in the first quarter of 2015 totaled
$86,000, compared to $1.4 million in the preceding quarter and $1.6
million a year ago. As a result, there were net recoveries of
$2.0 million in the first quarter of 2015, compared to net
recoveries of $282,000 in the preceding quarter and net recoveries
of $2.6 million a year ago.
The allowance for loan losses totaled $53.0 million as of March
31, 2015, generating an allowance of loan losses to gross loans
ratio of 1.88% as compared to 1.89% as of December 31, 2014 and
2.49% as of March 31, 2014.
Conference Call
Management will host a conference call today, April 23, 2015, at
1:00 p.m. PT (4:00 p.m. ET) to discuss these
results. This call will also be broadcast live via the
internet. Investment professionals and all current and
prospective stockholders are invited to access the live call by
dialing 1-877-407-9039 before 1:00 p.m. PT, using access code
HANMI. To listen to the call online, either live or archived,
visit the Investor Relations page of Hanmi's website at
www.hanmi.com.
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 across California, Texas, Illinois,
Virginia and New Jersey with 46 full-service branches as well as
loan production offices in California, Colorado, Texas, Virginia,
and 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 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
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 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 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, 2014, 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.
Hanmi Financial Corporation and
Subsidiaries |
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Consolidated Balance Sheets
(Unaudited) |
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(In thousands) |
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March 31, |
December 31, |
Percentage |
March 31, |
Percentage |
|
2015 |
2014 |
Change |
2014 |
Change |
Assets |
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Cash and cash equivalents |
$ 182,054 |
$ 158,320 |
15.0% |
$ 204,384 |
-10.9% |
Securities available for sale, at fair
value |
858,064 |
1,060,717 |
-19.1% |
520,990 |
64.7% |
Loans held for sale, at the lower of cost
or fair value |
8,677 |
5,451 |
59.2% |
390 |
2124.9% |
Loans receivable, net of allowance for
loan losses |
2,767,080 |
2,735,832 |
1.1% |
2,221,520 |
24.6% |
Accrued interest receivable |
9,238 |
9,749 |
-5.2% |
7,107 |
30.0% |
Premises and equipment, net |
30,934 |
30,912 |
0.1% |
13,947 |
121.8% |
Other real estate owned ("OREO"),
net |
12,114 |
15,790 |
-23.3% |
-- |
-- |
Customers' liability on acceptances |
2,598 |
1,847 |
40.7% |
1,985 |
30.9% |
Servicing assets |
13,321 |
13,773 |
-3.3% |
6,559 |
103.1% |
Other intangible assets, net |
1,985 |
2,080 |
-4.6% |
1,130 |
75.7% |
Investment in Federal Home Loan Bank
("FHLB") stock, at cost |
17,581 |
17,580 |
0.0% |
14,060 |
25.0% |
Investment in Federal Reserve Bank
("FRB") stock, at cost |
12,273 |
12,273 |
0.0% |
11,196 |
9.6% |
Income tax asset |
86,478 |
84,371 |
2.5% |
53,500 |
61.6% |
Bank-owned life insurance |
47,795 |
48,866 |
-2.2% |
29,922 |
59.7% |
Prepaid expenses |
3,918 |
2,672 |
46.6% |
2,262 |
73.2% |
Other assets |
29,777 |
32,210 |
-7.6% |
6,806 |
337.5% |
Total assets |
$ 4,083,887 |
$ 4,232,443 |
-3.5% |
$ 3,095,758 |
31.9% |
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Liabilities and Stockholders'
Equity |
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Liabilities: |
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Deposits: |
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Noninterest-bearing |
$ 1,064,736 |
$ 1,022,972 |
4.1% |
$ 827,153 |
28.7% |
Interest-bearing |
2,487,981 |
2,533,774 |
-1.8% |
1,679,427 |
48.1% |
Total
deposits |
3,552,717 |
3,556,746 |
-0.1% |
2,506,580 |
41.7% |
Accrued interest payable |
3,497 |
3,450 |
1.4% |
3,319 |
5.4% |
Bank's liability on acceptances |
2,598 |
1,847 |
40.7% |
1,985 |
30.9% |
FHLB advances |
-- |
150,000 |
-100.0% |
132,445 |
-100.0% |
Servicing liabilities |
5,529 |
5,971 |
-7.4% |
30 |
-- |
FDIC loss sharing liability |
543 |
2,074 |
-73.8% |
-- |
-- |
Rescinded stock obligation |
150 |
933 |
-83.9% |
-- |
-- |
Subordinated debentures |
18,582 |
18,544 |
0.2% |
-- |
-- |
Accrued expenses and other
liabilities |
32,801 |
39,491 |
-16.9% |
37,888 |
-13.4% |
Total liabilities |
3,616,417 |
3,779,056 |
-4.3% |
2,682,247 |
34.8% |
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Stockholders' equity: |
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|
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Common stock |
257 |
257 |
0.0% |
257 |
0.0% |
Additional paid-in capital |
555,710 |
554,904 |
0.1% |
553,067 |
0.5% |
Accumulated other comprehensive income
(loss) |
6,199 |
463 |
1238.9% |
(5,509) |
-212.5% |
Accumulated deficit |
(24,838) |
(32,379) |
-23.3% |
(64,446) |
-61.5% |
Less treasury stock |
(69,858) |
(69,858) |
0.0% |
(69,858) |
0.0% |
Total stockholders'
equity |
467,470 |
453,387 |
3.1% |
413,511 |
13.0% |
Total liabilities and stockholders'
equity |
$ 4,083,887 |
$ 4,232,443 |
-3.5% |
$ 3,095,758 |
31.9% |
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Hanmi Financial
Corporation and Subsidiaries |
Consolidated Statements
of Income (Unaudited) |
(In thousands, except share and
per share data) |
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Three
Months Ended |
|
March 31, |
December 31, |
Percentage |
March 31, |
Percentage |
|
2015 |
2014 |
Change |
2014 |
Change |
Interest and Dividend
Income: |
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|
|
|
Interest and fees on loans |
$ 37,250 |
$ 36,457 |
2.2% |
$ 27,329 |
36.3% |
Taxable interest on investment
securities |
3,854 |
4,453 |
-13.5% |
2,537 |
51.9% |
Tax-exempt interest on investment
securities |
20 |
20 |
0.0% |
76 |
-73.7% |
Interest on interest-bearing deposits in
other banks |
48 |
40 |
20.0% |
21 |
128.6% |
Dividends on FRB stock |
184 |
185 |
-0.5% |
168 |
9.5% |
Dividends on FHLB stock |
298 |
307 |
-2.9% |
236 |
26.3% |
Total interest and dividend income |
41,654 |
41,462 |
0.5% |
30,367 |
37.2% |
Interest Expense: |
|
|
|
|
|
Interest on deposits |
3,780 |
3,909 |
-3.3% |
3,221 |
17.4% |
Interest on FHLB advances |
56 |
35 |
60.0% |
48 |
16.7% |
Interest on subordinated debentures |
145 |
162 |
-10.5% |
-- |
-- |
Total interest expense |
3,981 |
4,106 |
-3.0% |
3,269 |
21.8% |
Net interest income before provision for
credit losses |
37,673 |
37,356 |
0.8% |
27,098 |
39.0% |
(Negative provision) provision for credit
losses |
(1,985) |
1,026 |
-293.5% |
(3,300) |
-39.8% |
Net interest income after provision for
credit losses |
39,658 |
36,330 |
9.2% |
30,398 |
30.5% |
Noninterest Income: |
|
|
|
|
|
Service charges on deposit accounts |
3,211 |
3,449 |
-6.9% |
2,474 |
29.8% |
Trade finance and other service charges
and fees |
1,267 |
1,329 |
-4.7% |
1,021 |
24.1% |
Bank-owned life insurance income |
253 |
198 |
27.8% |
223 |
13.5% |
Gain on sale of SBA loans |
1,684 |
1,227 |
37.2% |
547 |
207.9% |
Net gain on sales of investment
securities |
2,184 |
159 |
1273.6% |
1,421 |
53.7% |
Disposition gains on PCI loans |
881 |
1,432 |
-38.5% |
-- |
-- |
Other operating income |
1,154 |
1,190 |
-3.0% |
528 |
118.6% |
Total noninterest
income |
10,634 |
8,984 |
18.4% |
6,214 |
71.1% |
Noninterest Expense: |
|
|
|
|
|
Salaries and employee benefits |
16,384 |
16,791 |
-2.4% |
10,259 |
59.7% |
Occupancy and equipment |
4,303 |
4,331 |
-0.6% |
2,396 |
79.6% |
Merger and integration costs |
1,611 |
3,074 |
-47.6% |
85 |
1795.3% |
Deposit insurance premiums and regulatory
assessments |
893 |
682 |
30.9% |
437 |
104.3% |
Data processing |
2,132 |
2,333 |
-8.6% |
1,158 |
84.1% |
OREO expense |
417 |
686 |
-39.2% |
6 |
6850.0% |
Professional fees |
2,341 |
4,778 |
-51.0% |
748 |
213.0% |
Directors and officers liability
insurance |
176 |
121 |
45.5% |
191 |
-7.9% |
Supplies and communications |
830 |
887 |
-6.4% |
501 |
65.7% |
Advertising and promotion |
523 |
1,293 |
-59.6% |
581 |
-10.0% |
Loan-related expense |
669 |
318 |
110.4% |
83 |
706.0% |
Amortization of other intangible
assets |
95 |
100 |
-5.0% |
-- |
-- |
Other operating expenses |
1,330 |
1,691 |
-21.3% |
1,354 |
-1.8% |
Total noninterest
expense |
31,704 |
37,085 |
-14.5% |
17,799 |
78.1% |
Income from continuing operations before
provision for income taxes |
18,588 |
8,229 |
125.9% |
18,813 |
-1.2% |
Provision for income taxes |
7,534 |
2,301 |
227.4% |
7,844 |
-4.0% |
Income from continuing operations,
net of taxes |
$ 11,054 |
$ 5,928 |
86.5% |
$ 10,969 |
0.8% |
Discontinued operations |
|
|
|
|
|
Income from operations of discontinued
subsidiaries |
$ -- |
$ -- |
-- |
$ 37 |
-100.0% |
Income tax expense |
-- |
-- |
-- |
15 |
-100.0% |
Income from discontinued
operations |
-- |
-- |
-- |
22 |
-100.0% |
Net income |
$ 11,054 |
$ 5,928 |
86.5% |
$ 10,991 |
0.6% |
|
|
|
|
|
|
Basic earnings per share: |
|
|
|
|
|
Income from continuing operations, net of
taxes |
$ 0.35 |
$ 0.19 |
|
$ 0.35 |
|
Income from discontinued operations, net
of taxes |
-- |
-- |
|
-- |
|
Basic earnings per
share |
$ 0.35 |
$ 0.19 |
|
$ 0.35 |
|
Diluted earnings per share: |
|
|
|
|
|
Income from continuing operations, net of
taxes |
$ 0.35 |
$ 0.19 |
|
$ 0.34 |
|
Income from discontinued operations, net
of taxes |
-- |
-- |
|
-- |
|
Diluted earnings per
share |
$ 0.35 |
$ 0.19 |
|
$ 0.34 |
|
|
|
|
|
|
|
Weighted-average shares outstanding: |
|
|
|
|
|
Basic |
31,747,299 |
31,734,129 |
|
31,659,705 |
|
Diluted |
32,026,723 |
32,021,391 |
|
31,934,163 |
|
Common shares outstanding |
31,933,634 |
31,910,203 |
|
31,795,108 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Hanmi Financial
Corporation and Subsidiaries |
Selected Financial
Data (Unaudited) |
(In thousands) |
|
|
|
|
|
As of or
for the Three Months Ended |
|
March 31, |
December 31, |
March 31, |
|
2015 |
2014 |
2014 |
Average balances: |
|
|
|
Average gross loans, net of deferred loan
costs (1) |
$ 2,821,616 |
$ 2,719,692 |
$ 2,257,162 |
Average investment securities |
1,001,707 |
1,112,606 |
535,356 |
Average interest-earning assets |
3,901,818 |
3,905,646 |
2,825,669 |
Average assets |
4,181,405 |
4,187,559 |
2,977,939 |
Average deposits |
3,526,667 |
3,578,114 |
2,500,300 |
Average borrowings |
146,773 |
110,418 |
56,886 |
Average interest-bearing liabilities |
2,642,501 |
2,666,651 |
1,757,159 |
Average stockholders' equity |
459,661 |
450,986 |
405,120 |
Average tangible equity |
457,615 |
449,276 |
403,963 |
|
|
|
|
Performance ratios: |
|
|
|
Return on average assets (2) (3) |
1.07% |
0.56% |
1.49% |
Pre-tax, pre-provision earnings on
average assets (2) (3) |
1.61% |
0.88% |
2.11% |
Return on average stockholders' equity
(2) (3) |
9.75% |
5.21% |
10.98% |
Return on average tangible equity (2)
(3) |
9.80% |
5.23% |
11.01% |
Efficiency ratio |
65.63% |
80.03% |
53.43% |
Efficiency ratio (excluding merger and
integration costs) |
62.30% |
73.39% |
53.18% |
Net interest spread (2) (4) |
3.72% |
3.60% |
3.61% |
Net interest spread (excluding purchase
accounting) (2) (4) |
3.03% |
2.97% |
3.61% |
Net interest margin (2) (4) |
3.92% |
3.80% |
3.90% |
Net interest margin (excluding purchase
accounting) (2) (4) |
3.30% |
3.24% |
3.90% |
Average stockholders' equity to average
assets |
10.99% |
10.77% |
13.60% |
|
|
|
|
Allowance for loan
losses: |
|
|
|
Balance at beginning of period |
$ 52,666 |
$ 51,179 |
$ 57,555 |
(Negative provision) provision charged to
operating expense |
(1,673) |
1,204 |
(3,609) |
Net recoveries |
1,958 |
283 |
2,647 |
Balance at end of
period |
$ 52,951 |
$ 52,666 |
$ 56,593 |
|
|
|
|
Asset quality ratios: |
|
|
|
Nonperforming assets to assets (5) |
1.01% |
0.97% |
0.81% |
Nonperforming loans to gross loans
(5) |
1.04% |
0.91% |
1.10% |
Nonperforming loans to allowance for loan
losses (5) |
55.25% |
48.00% |
44.24% |
Net loan recoveries to average gross
loans (2) |
-0.28% |
-0.04% |
-0.47% |
Allowance for loan losses to gross
loans |
1.88% |
1.89% |
2.49% |
Allowance for loan losses to
nonperforming loans |
180.98% |
208.31% |
226.06% |
|
|
|
|
Allowance for off-balance sheet
items: |
|
|
|
Balance at beginning of period |
$ 1,366 |
$ 1,544 |
$ 1,248 |
(Negative provision) provision charged to
operating expense |
(312) |
(178) |
309 |
Balance at end of
period |
$ 1,054 |
$ 1,366 |
$ 1,557 |
|
|
|
|
Nonperforming assets
(5): |
|
|
|
Nonaccrual loans |
$ 29,258 |
$ 25,282 |
$ 25,034 |
Loans 90 days or more past due and still
accruing |
-- |
-- |
-- |
Nonperforming loans |
29,258 |
25,282 |
25,034 |
Other real estate owned, net |
12,114 |
15,790 |
-- |
Nonperforming assets |
41,372 |
41,072 |
25,034 |
Nonperforming loans in loans held for
sale |
-- |
-- |
-- |
Nonperforming assets |
$ 41,372 |
$ 41,072 |
$ 25,034 |
|
|
|
|
Delinquent loans, 30 to 89
days past due and still accruing |
$ 14,175 |
$ 9,515 |
$ 5,290 |
|
|
|
|
Delinquent loans to gross
loans |
0.50% |
0.34% |
0.23% |
|
|
|
|
|
|
|
|
Hanmi Financial
Corporation and Subsidiaries |
Selected Financial
Data, Continued (Unaudited) |
(In thousands) |
|
|
|
|
|
March 31, |
December 31, |
March 31, |
|
2015 |
2014 |
2014 |
Loan portfolio: |
|
|
|
Real estate loans |
$ 2,383,443 |
$ 2,373,212 |
$ 1,917,609 |
Residential loans |
156,513 |
135,303 |
110,305 |
Commercial and industrial loans |
250,613 |
249,189 |
219,102 |
Consumer loans |
25,988 |
27,557 |
29,356 |
Gross loans |
2,816,557 |
2,785,261 |
2,276,372 |
Deferred loan costs |
3,474 |
3,237 |
1,741 |
Gross loans, net of deferred loan
costs |
2,820,031 |
2,788,498 |
2,278,113 |
Allowance for loan losses |
(52,951) |
(52,666) |
(56,593) |
Loans receivable, net |
2,767,080 |
2,735,832 |
2,221,520 |
Loans held for sale, at the lower of cost
or fair value |
8,677 |
5,451 |
390 |
Total loans receivable,
net |
$ 2,775,757 |
$ 2,741,283 |
$ 2,221,910 |
|
|
|
|
Loan mix: |
|
|
|
Real estate loans |
84.6% |
85.2% |
84.3% |
Residential loans |
5.6% |
4.9% |
4.8% |
Commercial and industrial loans |
8.9% |
8.9% |
9.6% |
Consumer loans |
0.9% |
1.0% |
1.3% |
Total loans |
100.0% |
100.0% |
100.0% |
|
|
|
|
Deposit portfolio: |
|
|
|
Demand-noninterest-bearing |
$ 1,064,736 |
$ 1,022,972 |
$ 827,153 |
Savings |
118,328 |
120,659 |
118,017 |
Money market checking and NOW
accounts |
807,965 |
796,490 |
597,884 |
Time deposits of $100,000 or more |
890,362 |
910,340 |
476,654 |
Other time deposits |
671,326 |
706,285 |
486,872 |
Total deposits |
$ 3,552,717 |
$ 3,556,746 |
$ 2,506,580 |
|
|
|
|
Deposit mix: |
|
|
|
Demand-noninterest-bearing |
30.0% |
28.8% |
33.0% |
Savings |
3.3% |
3.4% |
4.7% |
Money market checking and NOW
accounts |
22.7% |
22.4% |
23.9% |
Time deposits of $100,000 or more |
25.1% |
25.6% |
19.0% |
Other time deposits |
18.9% |
19.8% |
19.4% |
Total deposits |
100.0% |
100.0% |
100.0% |
|
|
|
|
Capital ratios: |
|
|
|
Hanmi
Financial |
|
|
|
Total risk-based
capital |
15.60% |
15.89% |
17.96% |
Tier 1 risk-based
capital |
14.30% |
14.63% |
16.70% |
Common equity tier 1
captial |
13.80% |
-- |
-- |
Tier 1 leverage
capital ratio |
10.50% |
10.91% |
13.77% |
Hanmi Bank |
|
|
|
Total risk-based
capital |
14.90% |
15.18% |
17.23% |
Tier 1 risk-based
capital |
13.70% |
13.93% |
15.96% |
Common equity tier 1
captial |
13.70% |
-- |
-- |
Tier 1 leverage
capital ratio |
10.00% |
10.39% |
13.18% |
|
|
|
|
(1) Includes loans held for
sale |
(2) Annualized |
(3) Amount calculated based on
net income from continuing operations. |
(4) Amounts calculated on a fully
taxable equivalent basis using the current statutory federal tax
rate. |
(5) Excludes PCI loans |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hanmi Financial
Corporation and Subsidiaries |
Average Balance, Average
Yield Earned, and Average Rate Paid (Unaudited) |
(In thousands) |
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended |
|
March 31,
2015 |
December 31,
2014 |
March 31,
2014 |
|
|
Interest |
Average |
|
Interest |
Average |
|
Interest |
Average |
|
Average |
Income / |
Yield / |
Average |
Income / |
Yield / |
Average |
Income / |
Yield / |
|
Balance |
Expense |
Rate |
Balance |
Expense |
Rate |
Balance |
Expense |
Rate |
Assets |
|
|
|
|
|
|
|
|
|
Interest-earning assets: |
|
|
|
|
|
|
|
|
|
Gross loans, net of
deferred loan costs |
$ 2,821,616 |
$ 37,250 |
5.35% |
$ 2,719,692 |
$ 36,457 |
5.32% |
$ 2,257,162 |
$ 27,329 |
4.91% |
Municipal
securities-taxable |
16,906 |
163 |
3.86% |
16,646 |
164 |
3.94% |
31,220 |
328 |
4.20% |
Municipal securities-tax
exempt |
4,339 |
31 |
2.84% |
4,423 |
31 |
2.78% |
13,202 |
117 |
3.54% |
Obligations of other U.S.
government agencies |
85,703 |
404 |
1.89% |
139,872 |
599 |
1.71% |
83,565 |
405 |
1.94% |
Other debt securities |
864,492 |
3,287 |
1.52% |
921,403 |
3,690 |
1.60% |
382,113 |
1,804 |
1.89% |
Equity securities |
30,267 |
482 |
6.37% |
30,262 |
492 |
6.50% |
25,256 |
404 |
6.40% |
Federal funds sold |
-- |
-- |
0.00% |
-- |
-- |
0.00% |
11 |
-- |
0.00% |
Interest-bearing deposits
in other banks |
78,495 |
48 |
0.25% |
73,348 |
40 |
0.22% |
33,140 |
21 |
0.26% |
Total
interest-earning assets |
3,901,818 |
41,665 |
4.33% |
3,905,646 |
41,473 |
4.21% |
2,825,669 |
30,408 |
4.36% |
|
|
|
|
|
|
|
|
|
|
Noninterest-earning assets: |
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents |
86,313 |
|
|
87,410 |
|
|
77,397 |
|
|
Allowance for loan
losses |
(53,319) |
|
|
(52,155) |
|
|
(58,655) |
|
|
Other assets |
246,593 |
|
|
246,658 |
|
|
133,528 |
|
|
Total
noninterest-earning assets |
279,587 |
|
|
281,913 |
|
|
152,270 |
|
|
|
|
|
|
|
|
|
|
|
|
Total assets |
$ 4,181,405 |
|
|
$ 4,187,559 |
|
|
$ 2,977,939 |
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Stockholders'
Equity |
|
|
|
|
|
|
|
|
|
Interest-bearing liabilities: |
|
|
|
|
|
|
|
|
|
Deposits: |
|
|
|
|
|
|
|
|
|
Savings |
$ 120,254 |
$ 114 |
0.38% |
$ 120,332 |
$ 153 |
0.50% |
$ 116,471 |
$ 403 |
1.40% |
Money market
checking and NOW accounts |
782,432 |
885 |
0.46% |
800,490 |
884 |
0.44% |
591,593 |
767 |
0.53% |
Time deposits
of $100,000 or more |
900,144 |
1,608 |
0.72% |
919,195 |
1,632 |
0.70% |
500,095 |
887 |
0.72% |
Other time
deposits |
692,898 |
1,173 |
0.69% |
716,216 |
1,240 |
0.69% |
492,114 |
1,164 |
0.96% |
FHLB advances |
127,778 |
56 |
0.18% |
78,478 |
35 |
0.18% |
56,886 |
48 |
0.34% |
Rescinded stock
obligation |
438 |
-- |
0.00% |
13,426 |
-- |
0.00% |
-- |
-- |
0.00% |
Subordinated
debentures |
18,557 |
145 |
3.17% |
18,514 |
162 |
3.47% |
-- |
-- |
0.00% |
Total
interest-bearing liabilities |
2,642,501 |
3,981 |
0.61% |
2,666,651 |
4,106 |
0.61% |
1,757,159 |
3,269 |
0.75% |
|
|
|
|
|
|
|
|
|
|
Noninterest-bearing liabilities: |
|
|
|
|
|
|
|
|
|
Demand deposits |
1,030,939 |
|
|
1,021,881 |
|
|
800,027 |
|
|
Other liabilities |
48,304 |
|
|
48,041 |
|
|
15,633 |
|
|
Total
noninterest-bearing liabilities |
1,079,243 |
|
|
1,069,922 |
|
|
815,660 |
|
|
|
|
|
|
|
|
|
|
|
|
Total
liabilities |
3,721,744 |
|
|
3,736,573 |
|
|
2,572,819 |
|
|
Stockholders' equity |
459,661 |
|
|
450,986 |
|
|
405,120 |
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and stockholders'
equity |
$ 4,181,405 |
|
|
$ 4,187,559 |
|
|
$ 2,977,939 |
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income |
|
$ 37,684 |
|
|
$ 37,367 |
|
|
$ 27,139 |
|
|
|
|
|
|
|
|
|
|
|
Cost of deposits |
|
|
0.43% |
|
|
0.43% |
|
|
0.52% |
Net interest spread |
|
|
3.72% |
|
|
3.60% |
|
|
3.61% |
Net interest margin |
|
|
3.92% |
|
|
3.80% |
|
|
3.90% |
|
|
|
|
|
|
|
|
|
|
Non-GAAP Financial Measures
Tangible Common Equity to Tangible Assets Ratio
Tangible common equity to tangible assets ratio is supplemental
financial information determined by a method other than in
accordance with U.S. generally accepted accounting principles
("GAAP"). This non-GAAP measure is used by management in the
analysis of Hanmi's capital strength. Tangible equity is calculated
by subtracting goodwill and other intangible assets from
stockholders' equity. Banking and financial institution regulators
also exclude goodwill and other intangible assets from
stockholders' equity when assessing the capital adequacy of a
financial institution. Management believes the presentation of this
financial measure excluding the impact of these items provides
useful supplemental information that is essential to a proper
understanding of the capital strength of Hanmi. This disclosure
should not be viewed as a substitution for results determined in
accordance with GAAP, nor is it necessarily comparable to non-GAAP
performance measures that may be presented by other companies.
The following table reconciles this non-GAAP performance measure
to the GAAP performance measure for the periods indicated:
|
|
|
|
Tangible Common Equity to
Tangible Assets Ratio (Unaudited) |
(In thousands, except share and
per share data) |
|
|
|
|
|
|
|
|
|
March 31, |
December 31, |
March 31, |
Hanmi Financial
Corporation |
2015 |
2014 |
2014 |
Assets |
$ 4,083,887 |
$ 4,232,443 |
$ 3,095,758 |
Less other intangible assets |
(1,985) |
(2,080) |
(1,130) |
Tangible assets |
$ 4,081,902 |
$ 4,230,363 |
$ 3,094,628 |
|
|
|
|
Stockholders' equity |
$ 467,470 |
$ 453,387 |
$ 413,511 |
Less other intangible assets |
(1,985) |
(2,080) |
(1,130) |
Tangible stockholders' equity |
$ 465,485 |
$ 451,307 |
$ 412,381 |
|
|
|
|
Stockholders' equity to assets |
11.45% |
10.71% |
13.36% |
Tangible common equity to tangible
assets |
11.40% |
10.67% |
13.33% |
|
|
|
|
Common shares outstanding |
31,933,634 |
31,910,203 |
31,795,108 |
Tangible common equity per common share |
$ 14.58 |
$ 14.14 |
$ 12.97 |
CONTACT: Michael McCall
EVP & Chief Financial Officer
213-427-5701
Christina Lee
FVP & Senior Strategy Officer
213-427-5631
Lasse Glassen
Investor Relations (Addo Communications)
310-829-5400
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