Hanmi Financial Corporation (NASDAQ: HAFC, or
“Hanmi”), the parent company of Hanmi Bank (the “Bank”),
today reported net income for the 2020 third quarter of $16.3
million, or $0.53 per diluted share, compared with $9.2 million, or
$0.30 per diluted share for the 2020 second quarter and $12.4
million, or $0.40 per diluted share for the 2019 third quarter.
Bonnie Lee, President and Chief Executive
Officer, said, “In light of the significant challenges and
uncertainty we faced in the first half of 2020 arising from the
COVID-19 pandemic, I am extremely pleased with the financial and
operational improvements we achieved in the third quarter. In
particular, efforts to protect our portfolio and help borrowers
impacted by the pandemic through modifications, deferrals and other
services have been extremely successful. We are very encouraged by
the positive trend with the modified loan portfolio, declining to
approximately 12% of the portfolio as of the end of the third
quarter, and down from 29% at the end of the prior quarter. We also
saw the benefit of lower deposit costs, moderated credit loss
expense, a return to SBA loan sales and careful management of
noninterest expense. Together, this greatly expanded our third
quarter net income to $16.3 million, or $0.53 per diluted
share.”
Ms. Lee further added, “While we will continue
to proactively monitor the macroeconomic environment and the
performance of our loan portfolio, we are concurrently taking steps
to provide our customers with additional products and services,
further diversify our sources of revenue and safely and soundly
drive growth and profitability at the Bank. During the quarter we
hired key executives to enhance our residential mortgage
origination capabilities, as well as accelerate the digitization of
our banking platform to provide a more convenient and seamless
customer experience. We are confident these efforts will deepen our
relationships with new and existing customers, allow us to scale
more efficiently and provide exciting growth opportunities for
Hanmi.”
Ms. Lee concluded, “As we look ahead to the
fourth quarter and beyond, we remain committed to supporting our
loyal customers, prioritizing the health and safety of our
employees and communities and ultimately emerging from the pandemic
well-positioned to drive profitable, sustainable growth and
maximize value for our shareholders.”
Quarterly Highlights (Dollars
in thousands, except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of or for the Three Months Ended |
|
Amount Change |
|
September 30, |
|
June 30, |
|
March 31, |
|
December 31, |
|
September 30, |
|
Q3-20 |
|
Q3-20 |
|
2020 |
|
2020 |
|
2020 |
|
2019 |
|
2019 |
|
vs. Q2-20 |
|
vs. Q3-19 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
$ |
16,344 |
|
|
$ |
9,175 |
|
|
$ |
2,350 |
|
|
$ |
3,084 |
|
|
$ |
12,376 |
|
|
$ |
7,169 |
|
|
$ |
3,968 |
|
Net income
per diluted common share |
$ |
0.53 |
|
|
$ |
0.30 |
|
|
$ |
0.08 |
|
|
$ |
0.10 |
|
|
$ |
0.40 |
|
|
$ |
0.23 |
|
|
$ |
0.13 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets |
$ |
6,106,782 |
|
|
$ |
6,218,163 |
|
|
$ |
5,617,690 |
|
|
$ |
5,538,184 |
|
|
$ |
5,527,982 |
|
|
$ |
(111,381 |
) |
|
$ |
578,800 |
|
Loans
receivable |
$ |
4,834,137 |
|
|
$ |
4,825,642 |
|
|
$ |
4,543,636 |
|
|
$ |
4,610,148 |
|
|
$ |
4,569,837 |
|
|
$ |
8,495 |
|
|
$ |
264,300 |
|
Deposits |
$ |
5,194,292 |
|
|
$ |
5,209,781 |
|
|
$ |
4,582,068 |
|
|
$ |
4,698,962 |
|
|
$ |
4,690,141 |
|
|
$ |
(15,489 |
) |
|
$ |
504,151 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on
average assets |
|
1.08 |
% |
|
|
0.63 |
% |
|
|
0.17 |
% |
|
|
0.22 |
% |
|
|
0.90 |
% |
|
|
0.45 |
|
|
|
0.18 |
|
Return on
average stockholders' equity |
|
11.74 |
% |
|
|
6.73 |
% |
|
|
1.69 |
% |
|
|
2.15 |
% |
|
|
8.67 |
% |
|
|
5.01 |
|
|
|
3.07 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest
margin (1) |
|
3.13 |
% |
|
|
3.15 |
% |
|
|
3.36 |
% |
|
|
3.32 |
% |
|
|
3.36 |
% |
|
|
-0.02 |
|
|
|
-0.23 |
|
Efficiency
ratio (2) |
|
56.73 |
% |
|
|
41.51 |
% |
|
|
61.89 |
% |
|
|
67.31 |
% |
|
|
64.04 |
% |
|
|
15.22 |
|
|
|
-7.31 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tangible
common equity to tangible assets (3) |
|
9.05 |
% |
|
|
8.63 |
% |
|
|
9.65 |
% |
|
|
9.98 |
% |
|
|
10.20 |
% |
|
|
0.42 |
|
|
|
-1.15 |
|
Tangible
common equity per common share (3) |
$ |
17.95 |
|
|
$ |
17.47 |
|
|
$ |
17.67 |
|
|
$ |
17.90 |
|
|
$ |
18.05 |
|
|
$ |
0.48 |
|
|
$ |
(0.10 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Amounts calculated on a
fully taxable equivalent basis using the federal tax rate in effect
for the periods presented. |
|
|
|
|
|
|
(2) Noninterest expense divided
by net interest income plus noninterest income. |
|
|
|
|
|
|
|
|
|
|
(3) Refer to "Non-GAAP
Financial Measures" for further details. |
|
|
|
|
|
|
|
|
|
|
|
Results of Operations Net
interest income was $45.6 million for the third quarter of 2020
compared with $44.4 million for the second quarter of 2020, an
increase of 2.6%. Interest and fees on loans increased 0.7%, or
$0.4 million, from the preceding quarter primarily due to higher
average balances, partially offset by a 7 basis point reduction in
average yields. Interest on securities decreased 38.8%, or $1.2
million, from the preceding quarter primarily due to the sale of
$479.9 million of securities during the previous quarter and the
subsequent reinvestment into lower-yielding securities. Third
quarter total interest expense decreased 18.2%, or $2.1 million
from the preceding quarter driven by a 24 basis point reduction in
the average rate paid on interest-bearing deposits. Third quarter
loan prepayment penalties were $1.3 million compared with $0.1
million for the second quarter.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of or For the Three Months Ended (in
thousands) |
|
Percentage Change |
|
Sep 30, |
|
Jun 30, |
|
Mar 31, |
|
Dec 31, |
|
Sep 30, |
|
Q3-20 |
|
Q3-20 |
Net
Interest Income |
2020 |
|
2020 |
|
2020 |
|
2019 |
|
2019 |
|
vs. Q2-20 |
|
vs. Q3-19 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest and fees on loans receivable(1) |
$ |
52,586 |
|
|
$ |
52,230 |
|
|
$ |
54,648 |
|
|
$ |
56,267 |
|
|
$ |
57,929 |
|
|
0.7 |
% |
|
-9.2 |
% |
Interest on
securities |
|
1,972 |
|
|
|
3,225 |
|
|
|
3,655 |
|
|
|
3,665 |
|
|
|
3,769 |
|
|
-38.8 |
% |
|
-47.7 |
% |
Dividends on
FHLB stock |
|
204 |
|
|
|
203 |
|
|
|
289 |
|
|
|
289 |
|
|
|
286 |
|
|
0.3 |
% |
|
-28.8 |
% |
Interest on
deposits in other banks |
|
84 |
|
|
|
78 |
|
|
|
333 |
|
|
|
478 |
|
|
|
193 |
|
|
7.3 |
% |
|
-56.6 |
% |
Total interest and dividend income |
$ |
54,846 |
|
|
$ |
55,736 |
|
|
$ |
58,925 |
|
|
$ |
60,699 |
|
|
$ |
62,177 |
|
|
-1.6 |
% |
|
-11.8 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest on
deposits |
|
7,032 |
|
|
|
8,889 |
|
|
|
12,742 |
|
|
|
14,699 |
|
|
|
15,995 |
|
|
-20.9 |
% |
|
-56.0 |
% |
Interest on
borrowings |
|
582 |
|
|
|
760 |
|
|
|
496 |
|
|
|
325 |
|
|
|
367 |
|
|
-23.4 |
% |
|
58.6 |
% |
Interest on
subordinated debentures |
|
1,627 |
|
|
|
1,645 |
|
|
|
1,712 |
|
|
|
1,739 |
|
|
|
1,757 |
|
|
-1.1 |
% |
|
-7.4 |
% |
Total interest expense |
|
9,241 |
|
|
|
11,294 |
|
|
|
14,950 |
|
|
|
16,763 |
|
|
|
18,119 |
|
|
-18.2 |
% |
|
-49.0 |
% |
Net interest
income |
$ |
45,605 |
|
|
$ |
44,442 |
|
|
$ |
43,975 |
|
|
$ |
43,936 |
|
|
$ |
44,058 |
|
|
2.6 |
% |
|
3.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Includes loans held for
sale. |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest margin was 3.13% for the third
quarter of 2020 compared with 3.15% for the second quarter of 2020,
principally reflecting an 18 basis point decline in the yield on
earning assets offset by a 24 basis point decline in the cost of
interest-bearing deposits. The average earning asset yield was
3.77% for the third quarter of 2020 compared with 3.95% for the
second quarter of 2020. The 18 basis point decline was primarily
due to the reduction in securities yields reflecting the prior
quarter sale of securities and reinvestment into lower-yielding
securities, and, to a lesser extent lower average yields on loans
receivable. The cost of interest-bearing liabilities was 1.05% for
the third quarter of 2020 compared with 1.23% for the second
quarter of 2020. The 24 basis point decline in the cost of
interest-bearing deposits drove the lower cost of interest-bearing
liabilities.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended (in
thousands) |
|
Percentage Change |
|
Sep 30, |
|
Jun 30, |
|
Mar 31, |
|
Dec 31, |
|
Sep 30, |
|
Q3-20 |
|
Q3-20 |
Average Earning Assets and Interest-bearing
Liabilities |
2020 |
|
2020 |
|
2020 |
|
2019 |
|
2019 |
|
vs. Q2-20 |
|
vs. Q3-19 |
Loans receivable (1) |
$ |
4,734,511 |
|
|
$ |
4,680,048 |
|
|
$ |
4,518,395 |
|
|
$ |
4,487,998 |
|
|
$ |
4,519,770 |
|
|
1.2 |
% |
|
4.8 |
% |
Securities |
|
696,285 |
|
|
|
589,932 |
|
|
|
623,711 |
|
|
|
624,861 |
|
|
|
630,450 |
|
|
18.0 |
% |
|
10.4 |
% |
FHLB
stock |
|
16,385 |
|
|
|
16,385 |
|
|
|
16,385 |
|
|
|
16,385 |
|
|
|
16,385 |
|
|
0.0 |
% |
|
0.0 |
% |
Interest-bearing deposits in other banks |
|
340,486 |
|
|
|
386,956 |
|
|
|
104,513 |
|
|
|
114,462 |
|
|
|
35,140 |
|
|
-12.0 |
% |
|
868.9 |
% |
Average interest-earning assets |
$ |
5,787,667 |
|
|
$ |
5,673,321 |
|
|
$ |
5,263,004 |
|
|
$ |
5,243,706 |
|
|
$ |
5,201,745 |
|
|
2.0 |
% |
|
11.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Demand:
interest-bearing |
$ |
99,161 |
|
|
$ |
92,676 |
|
|
$ |
82,934 |
|
|
$ |
82,604 |
|
|
$ |
82,665 |
|
|
7.0 |
% |
|
20.0 |
% |
Money market
and savings |
|
1,771,615 |
|
|
|
1,677,081 |
|
|
|
1,687,013 |
|
|
|
1,640,162 |
|
|
|
1,555,639 |
|
|
5.6 |
% |
|
13.9 |
% |
Time
deposits |
|
1,357,167 |
|
|
|
1,458,351 |
|
|
|
1,522,745 |
|
|
|
1,605,276 |
|
|
|
1,692,419 |
|
|
-6.9 |
% |
|
-19.8 |
% |
Average interest-bearing deposits |
|
3,227,943 |
|
|
|
3,228,108 |
|
|
|
3,292,692 |
|
|
|
3,328,042 |
|
|
|
3,330,723 |
|
|
-0.0 |
% |
|
-3.1 |
% |
Borrowings |
|
163,364 |
|
|
|
342,437 |
|
|
|
130,659 |
|
|
|
75,500 |
|
|
|
74,239 |
|
|
-52.3 |
% |
|
120.1 |
% |
Subordinated
debentures |
|
118,733 |
|
|
|
118,583 |
|
|
|
118,444 |
|
|
|
118,297 |
|
|
|
118,145 |
|
|
0.1 |
% |
|
0.5 |
% |
Average interest-bearing liabilities |
$ |
3,510,040 |
|
|
$ |
3,689,128 |
|
|
$ |
3,541,795 |
|
|
$ |
3,521,839 |
|
|
$ |
3,523,107 |
|
|
-4.9 |
% |
|
-0.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Includes loans held for
sale. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended |
|
Amount Change |
|
Sep 30, |
|
Jun 30, |
|
Mar 31, |
|
Dec 31, |
|
Sep 30, |
|
Q3-20 |
|
Q3-20 |
Average Yields and Rates |
2020 |
|
2020 |
|
2020 |
|
2019 |
|
2019 |
|
vs. Q2-20 |
|
vs. Q3-19 |
Loans
receivable(1) |
|
4.42 |
% |
|
|
4.49 |
% |
|
|
4.86 |
% |
|
|
4.97 |
% |
|
|
5.08 |
% |
|
-0.07 |
|
|
-0.66 |
|
Securities
(2) |
|
1.13 |
% |
|
|
2.19 |
% |
|
|
2.34 |
% |
|
|
2.35 |
% |
|
|
2.39 |
% |
|
-1.06 |
|
|
-1.26 |
|
FHLB
stock |
|
4.95 |
% |
|
|
5.00 |
% |
|
|
7.10 |
% |
|
|
7.00 |
% |
|
|
6.93 |
% |
|
-0.05 |
|
|
-1.98 |
|
Interest-bearing deposits in other banks |
|
0.10 |
% |
|
|
0.08 |
% |
|
|
1.28 |
% |
|
|
1.66 |
% |
|
|
2.18 |
% |
|
0.02 |
|
|
-2.08 |
|
Interest-earning assets |
|
3.77 |
% |
|
|
3.95 |
% |
|
|
4.50 |
% |
|
|
4.59 |
% |
|
|
4.74 |
% |
|
-0.18 |
|
|
-0.97 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing deposits |
|
0.87 |
% |
|
|
1.11 |
% |
|
|
1.56 |
% |
|
|
1.75 |
% |
|
|
1.91 |
% |
|
-0.24 |
|
|
-1.04 |
|
Borrowings |
|
1.42 |
% |
|
|
0.89 |
% |
|
|
1.53 |
% |
|
|
1.71 |
% |
|
|
1.96 |
% |
|
0.53 |
|
|
-0.54 |
|
Subordinated
debentures |
|
5.48 |
% |
|
|
5.55 |
% |
|
|
5.78 |
% |
|
|
5.88 |
% |
|
|
5.92 |
% |
|
-0.07 |
|
|
-0.44 |
|
Interest-bearing liabilities |
|
1.05 |
% |
|
|
1.23 |
% |
|
|
1.70 |
% |
|
|
1.89 |
% |
|
|
2.04 |
% |
|
-0.18 |
|
|
-0.99 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest
margin (taxable equivalent basis) |
|
3.13 |
% |
|
|
3.15 |
% |
|
|
3.36 |
% |
|
|
3.32 |
% |
|
|
3.36 |
% |
|
-0.02 |
|
|
-0.23 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
deposits |
|
0.55 |
% |
|
|
0.74 |
% |
|
|
1.11 |
% |
|
|
1.25 |
% |
|
|
1.37 |
% |
|
-0.19 |
|
|
-0.82 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Includes loans held for
sale. |
|
|
|
|
|
|
|
|
|
|
|
|
|
(2) Amounts calculated on a
fully taxable equivalent basis using the federal tax rate in effect
for the periods presented. |
|
|
|
|
|
|
For the third quarter of 2020, credit loss
expense was $0.04 million, comprised of a $0.70 million provision
for loan losses and a $0.66 million negative provision for
off-balance sheet items. The provision for credit losses for the
second quarter of 2020 was $21.1 million and the provision for loan
losses was $1.6 million for the third quarter of 2019. The
provision for off-balance sheet items was $3.5 million and $0.2
million for the second quarter of 2020 and third quarter of 2019,
respectively.
Third quarter noninterest income decreased to
$7.1 million from $20.9 million for the second quarter, primarily
due to the $15.7 million in gains on sales of securities realized
in the second quarter as a result of repositioning the securities
portfolio to capture the high-level of unrealized gains arising
from the very low rate environment. This decrease was partially
offset by a $2.3 million increase in gain on sale of SBA loans on
$29.3 million of loans sold for the third quarter of 2020. Hanmi
did not sell any SBA loans during the second quarter due to
disruptions in the secondary market resulting from the COVID-19
crisis.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended (in
thousands) |
|
Percentage Change |
|
Sep 30, |
|
Jun 30, |
|
Mar 31, |
|
Dec 31, |
|
Sep 30, |
|
Q3-20 |
|
Q3-20 |
Noninterest Income |
2020 |
|
2020 |
|
2020 |
|
2019 |
|
2019 |
|
vs. Q2-20 |
|
vs. Q3-19 |
Service charges on deposit accounts |
$ |
2,002 |
|
|
$ |
2,032 |
|
|
$ |
2,400 |
|
|
$ |
2,589 |
|
|
$ |
2,518 |
|
|
-1.5 |
% |
|
-20.5 |
% |
Trade
finance and other service charges and fees |
|
972 |
|
|
|
961 |
|
|
|
986 |
|
|
|
1,267 |
|
|
|
1,191 |
|
|
1.1 |
% |
|
-18.4 |
% |
Servicing
income |
|
704 |
|
|
|
855 |
|
|
|
561 |
|
|
|
227 |
|
|
|
614 |
|
|
-17.7 |
% |
|
14.7 |
% |
Bank-owned
life insurance income |
|
289 |
|
|
|
276 |
|
|
|
277 |
|
|
|
281 |
|
|
|
279 |
|
|
4.6 |
% |
|
3.4 |
% |
All other
operating income |
|
806 |
|
|
|
1,095 |
|
|
|
845 |
|
|
|
846 |
|
|
|
491 |
|
|
-26.4 |
% |
|
64.1 |
% |
Service charges, fees & other |
|
4,773 |
|
|
|
5,219 |
|
|
|
5,069 |
|
|
|
5,210 |
|
|
|
5,093 |
|
|
-8.6 |
% |
|
-6.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain on sale
of SBA loans |
|
2,324 |
|
|
|
- |
|
|
|
1,154 |
|
|
|
1,499 |
|
|
|
1,767 |
|
|
0.0 |
% |
|
31.5 |
% |
Net gain on
sales of securities |
|
- |
|
|
|
15,712 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
-100.0 |
% |
|
0.0 |
% |
Gain on sale
of bank premises |
|
43 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
0.0 |
% |
|
0.0 |
% |
Total noninterest income |
$ |
7,140 |
|
|
$ |
20,931 |
|
|
$ |
6,223 |
|
|
$ |
6,709 |
|
|
$ |
6,860 |
|
|
-65.9 |
% |
|
4.1 |
% |
During the third quarter of 2020, noninterest
expense increased 10.3% to $29.9 million from $27.1 million for the
second quarter primarily due to $3.1 million in deferred loan costs
from PPP loans in the second quarter which drove a reduction in
2020 second quarter salaries and benefits expense. Primarily as a
result of the decrease in revenues (noninterest income and net
interest income), as well as higher noninterest expense, the
efficiency ratio increased to 56.73% in the third quarter from
41.51% in the prior quarter. Excluding securities gains and
deferred PPP loan origination costs the efficiency ratio for the
third quarter was 56.73% compared with 60.82% for the prior
quarter.
|
For the Three Months Ended (in
thousands) |
|
Percentage Change |
|
Sep 30, |
|
Jun 30, |
|
Mar 31, |
|
Dec 31, |
|
Sep 30, |
|
Q3-20 |
|
Q3-20 |
|
2020 |
|
2020 |
|
2020 |
|
2019 |
|
2019 |
|
vs. Q2-20 |
|
vs. Q3-19 |
Noninterest Expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
Salaries and employee benefits |
$ |
17,194 |
|
|
$ |
14,701 |
|
|
$ |
17,749 |
|
|
$ |
17,752 |
|
|
$ |
17,530 |
|
|
17.0 |
% |
|
-1.9 |
% |
Occupancy
and equipment |
|
4,650 |
|
|
|
4,508 |
|
|
|
4,475 |
|
|
|
4,547 |
|
|
|
4,528 |
|
|
3.1 |
% |
|
2.7 |
% |
Data
processing |
|
2,761 |
|
|
|
2,804 |
|
|
|
2,669 |
|
|
|
2,122 |
|
|
|
2,410 |
|
|
-1.5 |
% |
|
14.6 |
% |
Professional
fees |
|
1,794 |
|
|
|
1,545 |
|
|
|
1,915 |
|
|
|
2,601 |
|
|
|
2,826 |
|
|
16.1 |
% |
|
-36.5 |
% |
Supplies and
communication |
|
698 |
|
|
|
858 |
|
|
|
781 |
|
|
|
717 |
|
|
|
726 |
|
|
-18.7 |
% |
|
-3.9 |
% |
Advertising
and promotion |
|
594 |
|
|
|
456 |
|
|
|
734 |
|
|
|
1,165 |
|
|
|
927 |
|
|
30.2 |
% |
|
-36.0 |
% |
All other
operating expenses |
|
2,349 |
|
|
|
2,457 |
|
|
|
2,743 |
|
|
|
3,411 |
|
|
|
3,500 |
|
|
-4.4 |
% |
|
-32.9 |
% |
subtotal |
|
30,040 |
|
|
|
27,329 |
|
|
|
31,066 |
|
|
|
32,315 |
|
|
|
32,447 |
|
|
9.9 |
% |
|
-7.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other real
estate owned expense (income) |
|
(116 |
) |
|
|
(191 |
) |
|
|
2 |
|
|
|
40 |
|
|
|
160 |
|
|
39.4 |
% |
|
-172.4 |
% |
Impairment
loss on bank premises |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
1,734 |
|
|
|
- |
|
|
0.0 |
% |
|
0.0 |
% |
Total noninterest expense |
$ |
29,924 |
|
|
$ |
27,138 |
|
|
$ |
31,068 |
|
|
$ |
34,089 |
|
|
$ |
32,607 |
|
|
10.3 |
% |
|
-8.2 |
% |
Hanmi recorded a provision for income taxes of
$6.4 million for the third quarter of 2020, representing an
effective tax rate of 28.3% compared with $4.5 million,
representing an effective tax rate of 32.7%, for the second quarter
of 2020. For the first nine months of 2020, the effective tax rate
was 30.0%.
Financial PositionTotal assets
were $6.11 billion at September 30, 2020, a 1.8% decrease from
$6.22 billion at June 30, 2020.
Loans receivable, before the allowance for
credit losses, were $4.83 billion at September 30, 2020 and June
30, 2020. Loans held for sale, representing the guaranteed portion
of SBA 7(a) loans were $12.8 million at the end of the third
quarter, compared with $17.9 million at the end of the second
quarter.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of (in thousands) |
|
Percentage Change |
|
Sep 30, |
|
Jun 30, |
|
Mar 31, |
|
Dec 31, |
|
Sep 30, |
|
Q3-20 |
|
Q3-20 |
|
2020 |
|
2020 |
|
2020 |
|
2019 |
|
2019 |
|
vs. Q2-20 |
|
vs. Q3-19 |
Loan
Portfolio |
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial real estate loans |
$ |
3,264,447 |
|
|
$ |
3,266,242 |
|
|
$ |
3,187,189 |
|
|
$ |
3,226,478 |
|
|
$ |
3,209,752 |
|
|
-0.1 |
% |
|
1.7 |
% |
Residential/consumer loans |
|
370,883 |
|
|
|
366,190 |
|
|
|
391,206 |
|
|
|
415,698 |
|
|
|
451,099 |
|
|
1.3 |
% |
|
-17.8 |
% |
Commercial
and industrial loans |
|
765,484 |
|
|
|
730,399 |
|
|
|
472,714 |
|
|
|
484,093 |
|
|
|
441,209 |
|
|
4.8 |
% |
|
73.5 |
% |
Leases |
|
433,323 |
|
|
|
462,811 |
|
|
|
492,527 |
|
|
|
483,879 |
|
|
|
467,777 |
|
|
-6.4 |
% |
|
-7.4 |
% |
Loans receivable |
|
4,834,137 |
|
|
|
4,825,642 |
|
|
|
4,543,636 |
|
|
|
4,610,148 |
|
|
|
4,569,837 |
|
|
0.2 |
% |
|
5.8 |
% |
Loans held
for sale |
|
12,834 |
|
|
|
17,942 |
|
|
|
- |
|
|
|
6,020 |
|
|
|
6,598 |
|
|
-28.5 |
% |
|
94.5 |
% |
Total |
$ |
4,846,971 |
|
|
$ |
4,843,584 |
|
|
$ |
4,543,636 |
|
|
$ |
4,616,168 |
|
|
$ |
4,576,435 |
|
|
0.1 |
% |
|
5.9 |
% |
For the third quarter of 2020, commercial real
estate loans as a percentage of loans receivable decreased to 67.5%
compared with 70.2% for the same period last year. Commercial and
industrial loans, which included $302.9 million of SBA guaranteed
PPP loans, reached 15.8% of the portfolio at the end of the
2020-third quarter, up from 9.7% a year ago.
Hanmi generated strong loan production volume
through the third quarter. New loan production totaled $256.6
million at an average rate of 4.57%, while the average rate of
loans paid off during the same period was 5.13%.
|
For the Three Months Ended (in thousands) |
|
Sep 30, |
|
Jun 30, |
|
Mar 31, |
|
Dec 31, |
|
Sep 30, |
|
2020 |
|
2020 |
|
2020 |
|
2019 |
|
2019 |
New
Loan Production |
|
|
|
|
|
|
|
|
|
Commercial real estate loans |
$ |
99,618 |
|
|
$ |
129,432 |
|
|
$ |
109,433 |
|
|
$ |
185,070 |
|
|
$ |
78,039 |
|
Commercial
and industrial loans |
|
78,594 |
|
|
|
61,114 |
|
|
|
18,237 |
|
|
|
95,349 |
|
|
|
51,093 |
|
SBA
loans |
|
31,335 |
|
|
|
328,274 |
|
|
|
23,422 |
|
|
|
33,649 |
|
|
|
34,114 |
|
Leases
receivable |
|
21,271 |
|
|
|
15,279 |
|
|
|
56,849 |
|
|
|
65,525 |
|
|
|
52,333 |
|
Residential/consumer loans |
|
25,766 |
|
|
|
10 |
|
|
|
714 |
|
|
|
1,768 |
|
|
|
1,882 |
|
subtotal |
|
256,584 |
|
|
|
534,109 |
|
|
|
208,655 |
|
|
|
381,361 |
|
|
|
217,461 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Payoffs |
|
(139,797 |
) |
|
|
(67,537 |
) |
|
|
(122,686 |
) |
|
|
(205,012 |
) |
|
|
(103,638 |
) |
Amortization |
|
(66,907 |
) |
|
|
(90,678 |
) |
|
|
(95,414 |
) |
|
|
(77,580 |
) |
|
|
(70,407 |
) |
Loan
sales |
|
(36,068 |
) |
|
|
- |
|
|
|
(18,352 |
) |
|
|
(26,087 |
) |
|
|
(24,286 |
) |
Net line
utilization |
|
(2,199 |
) |
|
|
(92,230 |
) |
|
|
(11,242 |
) |
|
|
(31,333 |
) |
|
|
(4,012 |
) |
Charge-offs
& OREO |
|
(3,118 |
) |
|
|
(1,658 |
) |
|
|
(27,473 |
) |
|
|
(1,038 |
) |
|
|
(1,084 |
) |
|
|
|
|
|
|
|
|
|
|
Loans
receivable-beginning balance |
|
4,825,642 |
|
|
|
4,543,636 |
|
|
|
4,610,148 |
|
|
|
4,569,837 |
|
|
|
4,555,803 |
|
Loans
receivable-ending balance |
$ |
4,834,137 |
|
|
$ |
4,825,642 |
|
|
$ |
4,543,636 |
|
|
$ |
4,610,148 |
|
|
$ |
4,569,837 |
|
Deposits totaled $5.19 billion at the end of the
third quarter, compared with $5.21 billion at the end of the
preceding quarter. Growth in noninterest-bearing demand deposits
and interest-bearing demand deposits was more than offset by
reductions in time deposits. At September 30, 2020 the
loan-to-deposit ratio was 93.1% compared with 92.6% at the end of
the previous quarter.
|
As of (in thousands) |
|
Percentage Change |
|
Sep 30, |
|
Jun 30, |
|
Mar 31, |
|
Dec 31, |
|
Sep 30, |
|
Q3-20 |
|
Q3-20 |
|
2020 |
|
2020 |
|
2020 |
|
2019 |
|
2019 |
|
vs. Q2-20 |
|
vs. Q3-19 |
Deposit Portfolio |
|
|
|
|
|
|
|
|
|
|
|
|
|
Demand: noninterest-bearing |
$ |
1,961,006 |
|
|
$ |
1,865,213 |
|
|
$ |
1,366,270 |
|
|
$ |
1,391,624 |
|
|
$ |
1,388,121 |
|
|
|
5.1 |
% |
|
|
41.3 |
% |
Demand:
interest-bearing |
|
100,155 |
|
|
|
96,941 |
|
|
|
87,313 |
|
|
|
84,323 |
|
|
|
84,155 |
|
|
|
3.3 |
% |
|
|
19.0 |
% |
Money market
and savings |
|
1,794,627 |
|
|
|
1,812,612 |
|
|
|
1,648,022 |
|
|
|
1,667,096 |
|
|
|
1,590,037 |
|
|
|
-1.0 |
% |
|
|
12.9 |
% |
Time
deposits |
|
1,338,504 |
|
|
|
1,435,015 |
|
|
|
1,480,463 |
|
|
|
1,555,919 |
|
|
|
1,627,828 |
|
|
|
-6.7 |
% |
|
|
-17.8 |
% |
Total deposits |
$ |
5,194,292 |
|
|
$ |
5,209,781 |
|
|
$ |
4,582,068 |
|
|
$ |
4,698,962 |
|
|
$ |
4,690,141 |
|
|
|
-0.3 |
% |
|
|
10.7 |
% |
At September 30, 2020, the Bank had $150.0
million in borrowings from the FHLB with $1.4 billion of remaining
unused availability. As of the end of the third quarter of 2020,
the Bank had unused secured and unsecured facilities of $1.8
billion and $115.0 million, respectively.
At September 30, 2020, the Company had $16.1
million of cash on deposit with the Bank. Hanmi continues to
believe it has ample liquidity to operate in the evolving,
uncertain macroeconomic environment resulting from the pandemic,
and is continuously evaluating potential liquidity
requirements.
At September 30, 2020, stockholders’ equity was
$563.2 million, compared with $547.4 million at June 30, 2020.
Tangible common stockholders’ equity was $551.5 million, or 9.05%
of tangible assets, at September 30, 2020 compared with $535.7
million, or 8.63% of tangible assets at the end of the second
quarter. The ratio of tangible common equity to tangible assets
excluding the $302.9 million of PPP loans was 9.52% at the end of
the 2020-third quarter. Tangible book value per share increased to
$17.95 at September 30, 2020 from $17.47 at the end of the prior
quarter.
Hanmi continues to be well capitalized for
regulatory purposes, with a preliminary Tier 1 risk-based capital
ratio of 12.11% and a Total risk-based capital ratio of 15.45% at
September 30, 2020, versus 11.55% and 14.85%, respectively, at the
end of the second quarter.
|
As of |
|
Amount Change |
|
Sep 30, |
|
Jun 30, |
|
Mar 31, |
|
Dec 31, |
|
Sep 30, |
|
Q3-20 |
|
Q3-20 |
|
2020 |
|
2020 |
|
2020 |
|
2019 |
|
2019 |
|
vs. Q2-20 |
|
vs. Q3-19 |
Regulatory Capital ratios (1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Hanmi Financial |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total risk-based capital |
|
15.45 |
% |
|
|
14.85 |
% |
|
|
14.77 |
% |
|
|
15.11 |
% |
|
|
15.07 |
% |
|
|
0.60 |
|
|
|
0.38 |
|
Tier 1 risk-based capital |
|
12.11 |
% |
|
|
11.55 |
% |
|
|
11.52 |
% |
|
|
11.78 |
% |
|
|
11.91 |
% |
|
|
0.56 |
|
|
|
0.2 |
|
Common equity tier 1 capital |
|
11.68 |
% |
|
|
11.12 |
% |
|
|
11.09 |
% |
|
|
11.36 |
% |
|
|
11.49 |
% |
|
|
0.56 |
|
|
|
0.19 |
|
Tier 1 leverage capital ratio |
|
9.56 |
% |
|
|
9.69 |
% |
|
|
9.91 |
% |
|
|
10.15 |
% |
|
|
10.43 |
% |
|
|
-0.13 |
|
|
|
-0.87 |
|
Hanmi Bank |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total risk-based capital |
|
15.06 |
% |
|
|
14.41 |
% |
|
|
14.29 |
% |
|
|
14.64 |
% |
|
|
14.65 |
% |
|
|
0.65 |
|
|
|
0.41 |
|
Tier 1 risk-based capital |
|
13.81 |
% |
|
|
13.15 |
% |
|
|
13.12 |
% |
|
|
13.39 |
% |
|
|
13.55 |
% |
|
|
0.66 |
|
|
|
0.26 |
|
Common equity tier 1 capital |
|
13.81 |
% |
|
|
13.15 |
% |
|
|
13.12 |
% |
|
|
13.39 |
% |
|
|
13.55 |
% |
|
|
0.66 |
|
|
|
0.26 |
|
Tier 1 leverage capital ratio |
|
10.91 |
% |
|
|
11.04 |
% |
|
|
11.35 |
% |
|
|
11.56 |
% |
|
|
11.86 |
% |
|
|
-0.13 |
|
|
|
-0.95 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Preliminary ratios for
September 30, 2020 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Asset Quality Loans and leases
30 to 89 days past due and still accruing were 0.20% of loans and
leases at the end of the third quarter of 2020, compared with 0.21%
at the end of the second quarter.
Special mention loans were $57.1 million at the
end of the third quarter compared with $21.1 million at June 30,
2020. The September 30, 2020 balance of special mention loans
included $31.6 million of loans adversely affected by the
pandemic.
Classified loans were $106.2 million at
September 30, 2020 compared with $93.9 million at the end of the
second quarter. The quarter-over-quarter change reflects additions
or downgrades of $33.4 million and reductions or upgrades of $21.1
million. At September 30, 2020 classified loans included $21.7
million of loans adversely affected by the COVID-19 pandemic.
Nonperforming loans were $64.3 million at the
end of the third quarter of 2020, or 1.33% (1.25% after giving
effect to a $3.6 million loan payoff in October) of loans compared
with $58.3 million at the end of the second quarter, or 1.21% of
the portfolio.
Nonperforming assets were $65.4 million at the
end of the third quarter of 2020, or 1.07% (1.00% after giving
effect to a $3.6 million loan payoff in October) of total assets,
compared with $58.4 million, or 0.94% of assets, at the end of the
prior quarter.
Modified loans and leases declined 59% to $578.6
million at September 30, 2020 from $1.4 billion at June 30, 2020.
Approximately 70%, or $402.7 million, of modified loans require
interest-only payments. In addition, of the modified loan
portfolio, 5.2% were special mention, 4.1% were classified and none
were on nonaccrual status at September 30, 2020.
Gross charge-offs for the third quarter of 2020
were $2.2 million compared with $1.6 million for the preceding
quarter. Recoveries of previously charged-off loans for the third
quarter of 2020 were $1.7 million compared with $0.3 million for
the preceding quarter. As a result, there were net charge-offs of
$0.4 million for the third quarter of 2020, compared with net
charge-offs of $1.3 million for the preceding quarter. For the
third quarter of 2020, net charge-offs represented an annualized
0.03% of average loans compared with 0.11% of average loans for the
second quarter.
The allowance for credit losses was $86.6
million as of September 30, 2020 generating an allowance for credit
losses to loans of 1.79% (1.91% excluding the PPP loans) compared
with 1.79% (1.91% excluding the PPP loans) at the end of the prior
quarter. Although largely unchanged from the second quarter, the
allowance reflects the change in macroeconomic assumptions
including a lower projected average unemployment rate for the
subsequent four quarters and a higher projected annual GDP growth
rate. Hanmi recognizes the inherent uncertainties in the estimate
of the allowance for credit losses and the effects the COVID-19
pandemic may have on our borrowers. Hanmi expects the estimate of
the allowance for credit losses will change in future periods
because of changes in economic conditions, economic forecasts, and
other factors.
|
As of or for the Three Months Ended (in
thousands) |
|
Amount Change |
|
Sep 30, |
|
Jun 30, |
|
Mar 31, |
|
Dec 31, |
|
Sep 30, |
|
Q3-20 |
|
Q3-20 |
|
2020 |
|
2020 |
|
2020 |
|
2019 |
|
2019 |
|
vs. Q2-20 |
|
vs. Q3-19 |
Asset Quality Data and Ratios |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Delinquent loans: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans, 30 to 89 days past due and still accruing |
$ |
9,428 |
|
|
$ |
9,984 |
|
|
$ |
10,001 |
|
|
$ |
10,251 |
|
|
$ |
8,085 |
|
|
$ |
(556 |
) |
|
$ |
1,343 |
|
Delinquent
loans to total loans |
|
0.20 |
% |
|
|
0.21 |
% |
|
|
0.22 |
% |
|
|
0.22 |
% |
|
|
0.18 |
% |
|
|
-0.01 |
|
|
|
0.02 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Criticized loans: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Special
mention |
$ |
57,105 |
|
|
$ |
21,134 |
|
|
$ |
20,945 |
|
|
$ |
26,632 |
|
|
$ |
27,400 |
|
|
$ |
35,971 |
|
|
$ |
29,705 |
|
Classified |
|
106,211 |
|
|
|
93,922 |
|
|
|
88,225 |
|
|
|
94,025 |
|
|
|
80,734 |
|
|
|
12,289 |
|
|
|
25,477 |
|
Total criticized loans |
$ |
163,316 |
|
|
$ |
115,056 |
|
|
$ |
109,170 |
|
|
$ |
120,657 |
|
|
$ |
108,134 |
|
|
$ |
48,260 |
|
|
$ |
55,182 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonperforming assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonaccrual
loans |
$ |
64,333 |
|
|
$ |
58,264 |
|
|
$ |
46,383 |
|
|
$ |
63,761 |
|
|
$ |
64,194 |
|
|
$ |
6,069 |
|
|
$ |
139 |
|
Loans 90
days or more past due and still accruing |
|
- |
|
|
|
- |
|
|
|
5,843 |
|
|
|
- |
|
|
|
544 |
|
|
|
- |
|
|
|
(544 |
) |
Nonperforming loans |
|
64,333 |
|
|
|
58,264 |
|
|
|
52,226 |
|
|
|
63,761 |
|
|
|
64,738 |
|
|
|
6,069 |
|
|
|
(405 |
) |
Other real
estate owned, net |
|
1,052 |
|
|
|
148 |
|
|
|
63 |
|
|
|
63 |
|
|
|
330 |
|
|
|
904 |
|
|
|
722 |
|
Nonperforming assets |
$ |
65,385 |
|
|
$ |
58,412 |
|
|
$ |
52,289 |
|
|
$ |
63,824 |
|
|
$ |
65,068 |
|
|
$ |
6,973 |
|
|
$ |
317 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonperforming loans to total loans |
|
1.33 |
% |
|
|
1.21 |
% |
|
|
1.15 |
% |
|
|
1.38 |
% |
|
|
1.43 |
% |
|
|
|
|
Nonperforming assets to assets |
|
1.07 |
% |
|
|
0.94 |
% |
|
|
0.93 |
% |
|
|
1.15 |
% |
|
|
1.18 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for credit losses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at
beginning of period |
$ |
86,330 |
|
|
$ |
66,500 |
|
|
$ |
61,408 |
|
|
$ |
50,712 |
|
|
$ |
49,386 |
|
|
|
|
|
Impact of
CECL adoption |
|
- |
|
|
|
- |
|
|
|
17,433 |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
Provision
for loan losses |
|
696 |
|
|
|
21,131 |
|
|
|
14,916 |
|
|
|
10,751 |
|
|
|
1,602 |
|
|
|
|
|
Net loan
(charge-offs) recoveries |
|
(406 |
) |
|
|
(1,301 |
) |
|
|
(27,257 |
) |
|
|
(55 |
) |
|
|
(276 |
) |
|
|
|
|
Balance at end of period |
$ |
86,620 |
|
|
$ |
86,330 |
|
|
$ |
66,500 |
|
|
$ |
61,408 |
|
$ |
- |
$ |
50,712 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loan
charge-offs to average loans (1) |
|
0.03 |
% |
|
|
0.11 |
% |
|
|
2.41 |
% |
|
|
0.00 |
% |
|
|
0.02 |
% |
|
|
|
|
Allowance
for credit losses to loans |
|
1.79 |
% |
|
|
1.79 |
% |
|
|
1.46 |
% |
|
|
1.33 |
% |
|
|
1.11 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for credit losses related to off-balance sheet
items: |
|
|
|
|
|
|
|
|
|
|
|
|
Balance at
beginning of period |
$ |
6,347 |
|
|
$ |
2,885 |
|
|
$ |
2,397 |
|
|
$ |
1,542 |
|
|
$ |
1,333 |
|
|
|
|
|
Impact of
CECL adoption |
|
- |
|
|
|
- |
|
|
|
(335 |
) |
|
|
- |
|
|
|
- |
|
|
|
|
|
Provision
for loss on off-balance sheet items |
|
(658 |
) |
|
|
3,462 |
|
|
|
823 |
|
|
|
855 |
|
|
|
209 |
|
|
|
|
|
Balance at end of period |
$ |
5,689 |
|
|
$ |
6,347 |
|
|
$ |
2,885 |
|
|
$ |
2,397 |
|
|
$ |
1,542 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commitments
to extend credit |
$ |
444,782 |
|
|
$ |
486,852 |
|
|
$ |
375,233 |
|
|
$ |
371,287 |
|
|
$ |
346,182 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Annualized |
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate DevelopmentsOn July
29, 2020 Hanmi’s Board of Directors declared a cash dividend on its
common stock for the 2020 third quarter of $0.08 per share. The
dividend was paid on August 31, 2020 to stockholders of record as
of the close of business on August 10, 2020.
Conference
Call Management
will host a conference call today, October 27, 2020 at 2:00 p.m. PT
(5:00 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 2:00 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, California,
Hanmi Financial Corporation owns Hanmi Bank, which serves
multi-ethnic communities through its network of 35 full-service
branches and 9 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. 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. 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 our forward-looking statements to be reasonable, we
cannot guarantee future results, levels of activity, performance or
achievements.
Forward-looking 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
statements. These factors include the following:
- a 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;
- our ability to remediate any
material weakness in our internal controls over financial
reporting;
- 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;
- a failure in or breach of our
operational or security systems or infrastructure, including
cyberattacks;
- the failure to maintain current
technologies;
- our inability to successfully
implement future information technology enhancements;
- difficult business and economic
conditions that can adversely affect our industry and business,
including competition and lack of soundness of other financial
institutions, fraudulent activity and negative publicity;
- risks associated with Small
Business Administration loans;
- failure to attract or retain key
employees;
- our ability to access
cost-effective funding;
- fluctuations in real estate
values;
- changes in accounting policies and
practices;
- the imposition of tariffs or other
domestic or international governmental policies impacting the value
of the products of our borrowers;
- changes in governmental regulation,
including, but not limited to, any increase in FDIC insurance
premiums;
- the ability of Hanmi Bank to make
distributions to Hanmi Financial Corporation, which is restricted
by certain factors, including Hanmi Bank’s retained earnings, net
income, prior distributions made, and certain other financial
tests;
- our ability to identify a suitable
strategic partner or to consummate a strategic transaction;
- the adequacy of our allowance for
credit losses;
- our credit quality and the effect
of credit quality on our provision for loan losses and allowance
for credit 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;
- changes in securities markets;
and
- risks as it relates to cyber
security against our information technology and those of our
third-party providers and vendors.
Further, given its ongoing and dynamic nature,
it is difficult to predict the full impact of the COVID-19
outbreak on our business. The extent of such impact will depend on
future developments, which are highly uncertain, including when the
coronavirus can be controlled and abated and whether the gradual
reopening of businesses will result in a meaningful increase in
economic activity. As the result of the COVID-19 pandemic and the
related adverse local and national economic consequences, we could
be subject to any of the following risks, any of which could have a
material, adverse effect on our business, financial condition,
liquidity, and results of operations:
- demand for our products and
services may decline;
- if the economy is unable to
substantially reopen, and high levels of unemployment continue for
an extended period of time, loan delinquencies, problem assets, and
foreclosures may increase;
- collateral for
loans, especially real estate, may decline in value, which
could cause loan losses to increase;
- our allowance for credit losses may
have to be increased if borrowers experience financial
difficulties;
- a worsening of business and
economic conditions or in the financial markets could result in an
impairment of certain intangible assets, such as goodwill or our
servicing assets;
- the net worth and liquidity of loan
guarantors may decline, impairing their ability to honor
commitments to us;
- as the result of the decline in the
Federal Reserve Board’s target federal funds rate to near 0%, the
yield on our assets may decline to a greater extent than the
decline in our cost of interest-bearing liabilities;
- a material decrease in net income
or a net loss over several quarters could result in a decrease in
the rate of our quarterly cash dividend;
- litigation, regulatory enforcement
risk and reputation risk regarding our participation in the
Paycheck Protection Program and the risk that the Small Business
Administration may not fund some or all PPP loan guaranties;
- our cyber security risks are
increased as the result of an increase in the number of employees
working remotely;
- FDIC premiums may increase if the
agency experiences additional resolution costs; and
- the unanticipated loss or
unavailability of key employees due to the outbreak, which could
harm our ability to operate our business or execute our business
strategy, especially as we may not be successful in finding and
integrating suitable successors.
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, 2019, 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 Relations / Addo Investor
Relations310-829-5400
Hanmi Financial Corporation and
SubsidiariesConsolidated Balance Sheets
(Unaudited)(In thousands)
|
September 30, |
|
June 30, |
|
Percentage |
|
September 30, |
|
Percentage |
|
2020 |
|
2020 |
|
Change |
|
2019 |
|
Change |
Assets |
|
|
|
|
|
|
|
|
|
Cash and due from banks |
$ |
359,755 |
|
|
$ |
546,048 |
|
|
-34.1 |
% |
|
$ |
150,678 |
|
|
138.8 |
% |
Securities available for sale, at fair value |
|
723,601 |
|
|
|
655,971 |
|
|
10.3 |
% |
|
|
621,815 |
|
|
16.4 |
% |
Loans held for sale, at the lower of cost or fair value |
|
12,834 |
|
|
|
17,942 |
|
|
-28.5 |
% |
|
|
6,598 |
|
|
94.5 |
% |
Loans receivable, net of allowance for credit losses |
|
4,747,517 |
|
|
|
4,739,312 |
|
|
0.2 |
% |
|
|
4,519,125 |
|
|
5.1 |
% |
Accrued interest receivable |
|
21,417 |
|
|
|
21,372 |
|
|
0.2 |
% |
|
|
11,723 |
|
|
82.7 |
% |
Premises and equipment, net |
|
27,956 |
|
|
|
26,412 |
|
|
5.8 |
% |
|
|
27,271 |
|
|
2.5 |
% |
Customers' liability on acceptances |
|
208 |
|
|
|
- |
|
|
- |
|
|
|
33 |
|
|
529.5 |
% |
Servicing assets |
|
6,348 |
|
|
|
6,187 |
|
|
2.6 |
% |
|
|
7,436 |
|
|
-14.6 |
% |
Goodwill and other intangible assets, net |
|
11,677 |
|
|
|
11,742 |
|
|
-0.6 |
% |
|
|
11,950 |
|
|
-2.3 |
% |
Federal Home Loan Bank ("FHLB") stock, at cost |
|
16,385 |
|
|
|
16,385 |
|
|
0.0 |
% |
|
|
16,385 |
|
|
0.0 |
% |
Bank-owned life insurance |
|
53,623 |
|
|
|
53,334 |
|
|
0.5 |
% |
|
|
52,500 |
|
|
2.1 |
% |
Prepaid expenses and other assets |
|
125,461 |
|
|
|
123,458 |
|
|
1.6 |
% |
|
|
102,468 |
|
|
22.4 |
% |
Total assets |
$ |
6,106,782 |
|
|
$ |
6,218,163 |
|
|
-1.8 |
% |
|
$ |
5,527,982 |
|
|
10.5 |
% |
|
|
|
|
|
|
|
|
|
|
Liabilities and Stockholders' Equity |
|
|
|
|
|
|
|
|
|
Liabilities: |
|
|
|
|
|
|
|
|
|
Deposits: |
|
|
|
|
|
|
|
|
|
Noninterest-bearing |
$ |
1,961,006 |
|
|
$ |
1,865,213 |
|
|
5.1 |
% |
|
$ |
1,388,121 |
|
|
41.3 |
% |
Interest-bearing |
|
3,233,286 |
|
|
|
3,344,568 |
|
|
-3.3 |
% |
|
|
3,302,020 |
|
|
-2.1 |
% |
Total deposits |
|
5,194,292 |
|
|
|
5,209,781 |
|
|
-0.3 |
% |
|
|
4,690,141 |
|
|
10.7 |
% |
Accrued interest payable |
|
5,427 |
|
|
|
8,655 |
|
|
-37.3 |
% |
|
|
10,076 |
|
|
-46.1 |
% |
Bank's liability on acceptances |
|
208 |
|
|
|
- |
|
|
- |
|
|
|
33 |
|
|
529.5 |
% |
Borrowings |
|
150,000 |
|
|
|
251,808 |
|
|
-40.4 |
% |
|
|
75,000 |
|
|
100.0 |
% |
Subordinated debentures |
|
118,821 |
|
|
|
118,670 |
|
|
0.1 |
% |
|
|
118,232 |
|
|
0.5 |
% |
Accrued expenses and other liabilities |
|
74,831 |
|
|
|
81,813 |
|
|
-8.5 |
% |
|
|
59,973 |
|
|
24.8 |
% |
Total liabilities |
|
5,543,579 |
|
|
|
5,670,727 |
|
|
-2.2 |
% |
|
|
4,953,455 |
|
|
11.9 |
% |
|
|
|
|
|
|
|
|
|
|
Stockholders' equity: |
|
|
|
|
|
|
|
|
|
Common stock |
|
33 |
|
|
|
33 |
|
|
0.0 |
% |
|
|
33 |
|
|
0.0 |
% |
Additional paid-in capital |
|
577,727 |
|
|
|
577,211 |
|
|
0.1 |
% |
|
|
574,957 |
|
|
0.5 |
% |
Accumulated other comprehensive income |
|
1,721 |
|
|
|
335 |
|
|
413.8 |
% |
|
|
3,708 |
|
|
-53.6 |
% |
Retained earnings |
|
102,751 |
|
|
|
88,859 |
|
|
15.6 |
% |
|
|
104,927 |
|
|
-2.1 |
% |
Less treasury stock |
|
(119,029 |
) |
|
|
(119,002 |
) |
|
0.0 |
% |
|
|
(109,098 |
) |
|
-9.1 |
% |
Total stockholders' equity |
|
563,203 |
|
|
|
547,436 |
|
|
2.9 |
% |
|
|
574,527 |
|
|
-2.0 |
% |
Total liabilities and stockholders' equity |
$ |
6,106,782 |
|
|
$ |
6,218,163 |
|
|
-1.8 |
% |
|
$ |
5,527,982 |
|
|
10.5 |
% |
Hanmi Financial Corporation and Subsidiaries
Consolidated Statements of Income (Unaudited)(In
thousands, except share and per share data)
|
Three Months Ended |
|
September 30, |
|
June 30, |
|
Percentage |
|
September 30, |
|
Percentage |
|
2020 |
|
2020 |
|
Change |
|
2019 |
|
Change |
Interest and dividend income: |
|
|
|
|
|
|
|
|
|
Interest and fees on loans receivable |
$ |
52,586 |
|
$ |
52,230 |
|
0.7 |
% |
|
$ |
57,929 |
|
-9.2 |
% |
Interest on securities |
|
1,972 |
|
|
3,225 |
|
-38.8 |
% |
|
|
3,769 |
|
-47.7 |
% |
Dividends on FHLB stock |
|
204 |
|
|
203 |
|
0.3 |
% |
|
|
286 |
|
-28.8 |
% |
Interest on deposits in other banks |
|
84 |
|
|
78 |
|
7.3 |
% |
|
|
193 |
|
-56.6 |
% |
Total interest and dividend income |
|
54,846 |
|
|
55,736 |
|
-1.6 |
% |
|
|
62,177 |
|
-11.8 |
% |
Interest expense: |
|
|
|
|
|
|
|
|
|
Interest on deposits |
|
7,032 |
|
|
8,889 |
|
-20.9 |
% |
|
|
15,995 |
|
-56.0 |
% |
Interest on borrowings |
|
582 |
|
|
760 |
|
-23.4 |
% |
|
|
367 |
|
58.6 |
% |
Interest on subordinated debentures |
|
1,627 |
|
|
1,645 |
|
-1.1 |
% |
|
|
1,757 |
|
-7.4 |
% |
Total interest expense |
|
9,241 |
|
|
11,294 |
|
-18.2 |
% |
|
|
18,119 |
|
-49.0 |
% |
Net interest
income before credit loss expense |
|
45,605 |
|
|
44,442 |
|
2.6 |
% |
|
|
44,058 |
|
3.5 |
% |
Credit loss expense |
|
38 |
|
|
24,594 |
|
-99.8 |
% |
|
|
1,602 |
|
-97.6 |
% |
Net interest
income after credit loss expense |
|
45,567 |
|
|
19,848 |
|
129.6 |
% |
|
|
42,456 |
|
7.3 |
% |
Noninterest income: |
|
|
|
|
|
|
|
|
|
Service charges on deposit accounts |
|
2,002 |
|
|
2,032 |
|
-1.5 |
% |
|
|
2,518 |
|
-20.5 |
% |
Trade finance and other service charges and fees |
|
972 |
|
|
961 |
|
1.1 |
% |
|
|
1,191 |
|
-18.4 |
% |
Gain on sale of Small Business Administration ("SBA") loans |
|
2,324 |
|
|
- |
|
- |
|
|
|
1,767 |
|
31.5 |
% |
Net gain on sales of securities |
|
- |
|
|
15,712 |
|
-100.0 |
% |
|
|
- |
|
- |
|
Other operating income |
|
1,842 |
|
|
2,226 |
|
-17.2 |
% |
|
|
1,384 |
|
33.1 |
% |
Total noninterest income |
|
7,140 |
|
|
20,931 |
|
-65.9 |
% |
|
|
6,860 |
|
4.1 |
% |
Noninterest expense: |
|
|
|
|
|
|
|
|
|
Salaries and employee benefits |
|
17,194 |
|
|
14,701 |
|
17.0 |
% |
|
|
17,530 |
|
-1.9 |
% |
Occupancy and equipment |
|
4,650 |
|
|
4,508 |
|
3.1 |
% |
|
|
4,528 |
|
2.7 |
% |
Data processing |
|
2,761 |
|
|
2,804 |
|
-1.5 |
% |
|
|
2,410 |
|
14.6 |
% |
Professional fees |
|
1,794 |
|
|
1,545 |
|
16.1 |
% |
|
|
2,826 |
|
-36.5 |
% |
Supplies and communications |
|
698 |
|
|
858 |
|
-18.7 |
% |
|
|
726 |
|
-3.9 |
% |
Advertising and promotion |
|
594 |
|
|
456 |
|
30.2 |
% |
|
|
927 |
|
-36.0 |
% |
Other operating expenses |
|
2,233 |
|
|
2,266 |
|
-1.5 |
% |
|
|
3,660 |
|
-39.0 |
% |
Total noninterest expense |
|
29,924 |
|
|
27,138 |
|
10.3 |
% |
|
|
32,607 |
|
-8.2 |
% |
Income
before tax |
|
22,783 |
|
|
13,641 |
|
67.0 |
% |
|
|
16,709 |
|
36.4 |
% |
Income tax expense |
|
6,439 |
|
|
4,466 |
|
44.2 |
% |
|
|
4,333 |
|
48.6 |
% |
Net
income |
$ |
16,344 |
|
$ |
9,175 |
|
78.1 |
% |
|
$ |
12,376 |
|
32.1 |
% |
|
|
|
|
|
|
|
|
|
|
|
Basic
earnings per share: |
$ |
0.53 |
|
$ |
0.30 |
|
|
|
$ |
0.40 |
|
|
Diluted
earnings per share: |
$ |
0.53 |
|
$ |
0.30 |
|
|
|
$ |
0.40 |
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average shares outstanding: |
|
|
|
|
|
|
|
|
|
Basic |
|
30,464,263 |
|
|
30,426,967 |
|
|
|
|
30,830,445 |
|
|
Diluted |
|
30,464,263 |
|
|
30,426,967 |
|
|
|
|
30,859,119 |
|
|
Common
shares outstanding |
|
30,719,591 |
|
|
30,657,629 |
|
|
|
|
31,173,881 |
|
|
Hanmi Financial Corporation and Subsidiaries
Consolidated Statements of Income (Unaudited)(In
thousands, except share and per share data)
|
Nine Months Ended |
|
September 30, |
|
September 30, |
|
Percentage |
|
2020 |
|
2019 |
|
Change |
Interest and dividend income: |
|
|
|
|
|
Interest and fees on loans receivable |
$ |
159,464 |
|
$ |
173,135 |
|
-7.9 |
% |
Interest on securities |
|
8,852 |
|
|
10,996 |
|
-19.5 |
% |
Dividends on FHLB stock |
|
696 |
|
|
858 |
|
-18.8 |
% |
Interest on deposits in other banks |
|
495 |
|
|
1,085 |
|
-54.4 |
% |
Total interest and dividend income |
|
169,507 |
|
|
186,074 |
|
-8.9 |
% |
Interest expense: |
|
|
|
|
|
Interest on deposits |
|
28,663 |
|
|
48,406 |
|
-40.8 |
% |
Interest on borrowings |
|
1,838 |
|
|
439 |
|
318.8 |
% |
Interest on subordinated debentures |
|
4,984 |
|
|
5,293 |
|
-5.8 |
% |
Total interest expense |
|
35,485 |
|
|
54,138 |
|
-34.5 |
% |
Net interest
income before credit loss expense |
|
134,022 |
|
|
131,936 |
|
1.6 |
% |
Credit loss expense |
|
40,371 |
|
|
19,418 |
|
107.9 |
% |
Net interest
income after credit loss expense |
|
93,651 |
|
|
112,518 |
|
-16.8 |
% |
Noninterest income: |
|
|
|
|
|
Service charges on deposit accounts |
|
6,434 |
|
|
7,362 |
|
-12.6 |
% |
Trade finance and other service charges and fees |
|
2,920 |
|
|
3,519 |
|
-17.0 |
% |
Gain on sale of Small Business Administration ("SBA") loans |
|
3,478 |
|
|
3,752 |
|
-7.3 |
% |
Net gain on sales of securities |
|
15,712 |
|
|
1,295 |
|
1113.3 |
% |
Other operating income |
|
5,751 |
|
|
4,915 |
|
17.0 |
% |
Total noninterest income |
|
34,295 |
|
|
20,843 |
|
64.5 |
% |
Noninterest expense: |
|
|
|
|
|
Salaries and employee benefits |
|
49,645 |
|
|
50,149 |
|
-1.0 |
% |
Occupancy and equipment |
|
13,633 |
|
|
12,517 |
|
8.9 |
% |
Data processing |
|
8,233 |
|
|
6,633 |
|
24.1 |
% |
Professional fees |
|
5,255 |
|
|
6,459 |
|
-18.6 |
% |
Supplies and communications |
|
2,337 |
|
|
2,220 |
|
5.3 |
% |
Advertising and promotion |
|
1,783 |
|
|
2,632 |
|
-32.2 |
% |
Other operating expenses |
|
7,245 |
|
|
11,207 |
|
-35.4 |
% |
Total noninterest expense |
|
88,131 |
|
|
91,817 |
|
-4.0 |
% |
Income
before tax |
|
39,815 |
|
|
41,544 |
|
-4.2 |
% |
Income tax expense |
|
11,945 |
|
|
11,840 |
|
0.9 |
% |
Net
income |
$ |
27,870 |
|
$ |
29,704 |
|
-6.2 |
% |
|
|
|
|
|
|
|
Basic
earnings per share: |
$ |
0.91 |
|
$ |
0.96 |
|
|
Diluted
earnings per share: |
$ |
0.91 |
|
$ |
0.96 |
|
|
|
|
|
|
|
|
Weighted-average shares outstanding: |
|
|
|
|
|
Basic |
|
30,276,462 |
|
|
30,736,456 |
|
|
Diluted |
|
30,276,462 |
|
|
30,769,160 |
|
|
Common
shares outstanding |
|
30,719,591 |
|
|
31,173,881 |
|
|
Hanmi Financial Corporation and Subsidiaries
Average Balance, Average Yield Earned, and Average Rate
Paid (Unaudited)(In thousands, except ratios)
|
Three Months Ended |
|
September 30, 2020 |
|
June 30, 2020 |
|
September 30, 2019 |
|
|
|
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: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans receivable (1) |
$ |
4,734,511 |
|
|
$ |
52,586 |
4.42 |
% |
|
$ |
4,680,048 |
|
|
$ |
52,230 |
4.49 |
% |
|
$ |
4,519,770 |
|
|
$ |
57,929 |
5.08 |
% |
Securities (2) |
|
696,285 |
|
|
|
1,972 |
1.13 |
% |
|
|
589,932 |
|
|
|
3,225 |
2.19 |
% |
|
|
630,450 |
|
|
|
3,769 |
2.39 |
% |
FHLB stock |
|
16,385 |
|
|
|
204 |
4.95 |
% |
|
|
16,385 |
|
|
|
203 |
5.00 |
% |
|
|
16,385 |
|
|
|
286 |
6.93 |
% |
Interest-bearing deposits in other banks |
|
340,486 |
|
|
|
84 |
0.10 |
% |
|
|
386,956 |
|
|
|
78 |
0.08 |
% |
|
|
35,140 |
|
|
|
193 |
2.18 |
% |
Total interest-earning assets |
|
5,787,667 |
|
|
|
54,846 |
3.77 |
% |
|
|
5,673,321 |
|
|
|
55,736 |
3.95 |
% |
|
|
5,201,745 |
|
|
|
62,177 |
4.74 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest-earning assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and due from banks |
|
64,814 |
|
|
|
|
|
|
69,667 |
|
|
|
|
|
|
99,492 |
|
|
|
|
Allowance for credit losses |
|
(86,615 |
) |
|
|
|
|
|
(66,926 |
) |
|
|
|
|
|
(49,762 |
) |
|
|
|
Other assets |
|
245,589 |
|
|
|
|
|
|
219,383 |
|
|
|
|
|
|
210,142 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets |
$ |
6,011,455 |
|
|
|
|
|
$ |
5,895,445 |
|
|
|
|
|
$ |
5,461,617 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Stockholders' Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposits: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Demand: interest-bearing |
$ |
99,161 |
|
|
$ |
17 |
0.07 |
% |
|
$ |
92,676 |
|
|
$ |
18 |
0.08 |
% |
|
$ |
82,665 |
|
|
$ |
31 |
0.15 |
% |
Money market and savings |
|
1,771,615 |
|
|
|
2,192 |
0.49 |
% |
|
|
1,677,081 |
|
|
|
2,309 |
0.55 |
% |
|
|
1,555,639 |
|
|
|
6,180 |
1.58 |
% |
Time deposits |
|
1,357,167 |
|
|
|
4,823 |
1.41 |
% |
|
|
1,458,351 |
|
|
|
6,562 |
1.81 |
% |
|
|
1,692,419 |
|
|
|
9,784 |
2.29 |
% |
Total interest-bearing deposits |
|
3,227,943 |
|
|
|
7,032 |
0.87 |
% |
|
|
3,228,108 |
|
|
|
8,889 |
1.11 |
% |
|
|
3,330,723 |
|
|
|
15,995 |
1.91 |
% |
Borrowings |
|
163,364 |
|
|
|
582 |
1.42 |
% |
|
|
342,437 |
|
|
|
760 |
0.89 |
% |
|
|
74,239 |
|
|
|
367 |
1.96 |
% |
Subordinated debentures |
|
118,733 |
|
|
|
1,627 |
5.48 |
% |
|
|
118,583 |
|
|
|
1,645 |
5.55 |
% |
|
|
118,145 |
|
|
|
1,757 |
5.92 |
% |
Total interest-bearing liabilities |
|
3,510,040 |
|
|
|
9,241 |
1.05 |
% |
|
|
3,689,128 |
|
|
|
11,294 |
1.23 |
% |
|
|
3,523,107 |
|
|
|
18,119 |
2.04 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest-bearing liabilities and equity: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Demand deposits: noninterest-bearing |
|
1,859,832 |
|
|
|
|
|
|
1,589,668 |
|
|
|
|
|
|
1,300,704 |
|
|
|
|
Other liabilities |
|
87,811 |
|
|
|
|
|
|
68,311 |
|
|
|
|
|
|
71,631 |
|
|
|
|
Stockholders' equity |
|
553,772 |
|
|
|
|
|
|
548,338 |
|
|
|
|
|
|
566,175 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and stockholders' equity |
$ |
6,011,455 |
|
|
|
|
|
$ |
5,895,445 |
|
|
|
|
|
$ |
5,461,617 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
interest income (tax equivalent basis) |
|
|
$ |
45,605 |
|
|
|
|
$ |
44,442 |
|
|
|
|
$ |
44,058 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost
of deposits |
|
|
|
0.55 |
% |
|
|
|
|
0.74 |
% |
|
|
|
|
1.37 |
% |
Net
interest spread (taxable equivalent basis) |
|
|
|
2.72 |
% |
|
|
|
|
2.72 |
% |
|
|
|
|
2.70 |
% |
Net
interest margin (taxable equivalent basis) |
|
|
|
3.13 |
% |
|
|
|
|
3.15 |
% |
|
|
|
|
3.36 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Includes average loans held
for sale |
|
|
|
|
|
|
|
|
|
|
|
|
|
(2) Amounts calculated on a
fully taxable equivalent basis using the federal tax rate in effect
for the periods presented. |
|
|
|
|
|
Hanmi Financial Corporation and Subsidiaries
Average Balance, Average Yield Earned, and Average Rate
Paid (Unaudited)(In thousands, except ratios)
|
Nine Months Ended |
|
September 30, 2020 |
|
September 30, 2019 |
|
|
|
Interest |
Average |
|
|
|
Interest |
Average |
|
Average |
|
Income / |
Yield / |
|
Average |
|
Income / |
Yield / |
|
Balance |
|
Expense |
Rate |
|
Balance |
|
Expense |
Rate |
Assets |
|
|
|
|
|
|
|
|
|
Interest-earning assets: |
|
|
|
|
|
|
|
|
|
Loans receivable (1) |
$ |
4,644,647 |
|
|
$ |
159,464 |
4.59 |
% |
|
$ |
4,514,707 |
|
|
$ |
173,135 |
5.13 |
% |
Securities (2) |
|
636,860 |
|
|
|
8,852 |
1.85 |
% |
|
|
616,503 |
|
|
|
11,141 |
2.41 |
% |
FHLB stock |
|
16,385 |
|
|
|
696 |
5.68 |
% |
|
|
16,385 |
|
|
|
858 |
7.00 |
% |
Interest-bearing deposits in other banks |
|
277,698 |
|
|
|
495 |
0.24 |
% |
|
|
60,240 |
|
|
|
1,085 |
2.41 |
% |
Total interest-earning assets |
|
5,575,590 |
|
|
|
169,507 |
4.06 |
% |
|
|
5,207,835 |
|
|
|
186,219 |
4.78 |
% |
|
|
|
|
|
|
|
|
|
|
Noninterest-earning assets: |
|
|
|
|
|
|
|
|
|
Cash and due from banks |
|
77,263 |
|
|
|
|
|
|
103,098 |
|
|
|
|
Allowance for credit losses |
|
(71,587 |
) |
|
|
|
|
|
(38,885 |
) |
|
|
|
Other assets |
|
223,675 |
|
|
|
|
|
|
193,944 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets |
$ |
5,804,941 |
|
|
|
|
|
$ |
5,465,992 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Stockholders' Equity |
|
|
|
|
|
|
|
|
|
Interest-bearing liabilities: |
|
|
|
|
|
|
|
|
|
Deposits: |
|
|
|
|
|
|
|
|
|
Demand: interest-bearing |
$ |
91,618 |
|
|
$ |
56 |
0.08 |
% |
|
$ |
83,953 |
|
|
$ |
93 |
0.15 |
% |
Money market and savings |
|
1,712,121 |
|
|
|
9,281 |
0.72 |
% |
|
|
1,541,548 |
|
|
|
17,940 |
1.56 |
% |
Time deposits |
|
1,445,763 |
|
|
|
19,327 |
1.79 |
% |
|
|
1,802,303 |
|
|
|
30,373 |
2.25 |
% |
Total interest-bearing deposits |
|
3,249,502 |
|
|
|
28,664 |
1.18 |
% |
|
|
3,427,804 |
|
|
|
48,406 |
1.89 |
% |
Borrowings |
|
211,976 |
|
|
|
1,839 |
1.16 |
% |
|
|
28,536 |
|
|
|
439 |
2.06 |
% |
Subordinated debentures |
|
118,587 |
|
|
|
4,984 |
5.60 |
% |
|
|
118,006 |
|
|
|
5,293 |
5.97 |
% |
Total interest-bearing liabilities |
|
3,580,065 |
|
|
|
35,487 |
1.32 |
% |
|
|
3,574,346 |
|
|
|
54,138 |
2.03 |
% |
|
|
|
|
|
|
|
|
|
|
Noninterest-bearing liabilities and equity: |
|
|
|
|
|
|
|
|
|
Demand deposits: noninterest-bearing |
|
1,595,368 |
|
|
|
|
|
|
1,270,029 |
|
|
|
|
Other liabilities |
|
75,487 |
|
|
|
|
|
|
56,607 |
|
|
|
|
Stockholders' equity |
|
554,021 |
|
|
|
|
|
|
565,010 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and stockholders' equity |
$ |
5,804,941 |
|
|
|
|
|
$ |
5,465,992 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
interest income (tax equivalent basis) |
|
|
$ |
134,020 |
|
|
|
|
$ |
132,081 |
|
|
|
|
|
|
|
|
|
|
|
Cost
of deposits |
|
|
|
0.79 |
% |
|
|
|
|
1.38 |
% |
Net
interest spread (taxable equivalent basis) |
|
|
|
2.74 |
% |
|
|
|
|
2.75 |
% |
Net
interest margin (taxable equivalent basis) |
|
|
|
3.21 |
% |
|
|
|
|
3.39 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Includes average loans held
for sale |
|
|
|
|
|
|
|
|
(2) Amounts calculated on a
fully taxable equivalent basis using the federal tax rate in effect
for the periods presented. |
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 common 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, per share data and
ratios)
|
September 30, |
|
June 30, |
|
March 31, |
|
December 31, |
|
September 30, |
Hanmi Financial Corporation |
2020 |
|
2020 |
|
2020 |
|
2019 |
|
2019 |
Assets |
$ |
6,106,782 |
|
|
$ |
6,218,163 |
|
|
$ |
5,617,690 |
|
|
$ |
5,538,184 |
|
|
$ |
5,527,982 |
|
Less goodwill and other intangible assets |
|
(11,677 |
) |
|
|
(11,742 |
) |
|
|
(11,808 |
) |
|
|
(11,873 |
) |
|
|
(11,950 |
) |
Tangible
assets |
$ |
6,095,105 |
|
|
$ |
6,206,421 |
|
|
$ |
5,605,882 |
|
|
$ |
5,526,311 |
|
|
$ |
5,516,032 |
|
|
|
|
|
|
|
|
|
|
|
Stockholders' equity (1) |
$ |
563,203 |
|
|
$ |
547,436 |
|
|
$ |
552,958 |
|
|
$ |
563,267 |
|
|
$ |
574,527 |
|
Less goodwill and other intangible assets |
|
(11,677 |
) |
|
|
(11,742 |
) |
|
|
(11,808 |
) |
|
|
(11,873 |
) |
|
|
(11,950 |
) |
Tangible
stockholders' equity (1) |
$ |
551,526 |
|
|
$ |
535,694 |
|
|
$ |
541,150 |
|
|
$ |
551,394 |
|
|
$ |
562,577 |
|
|
|
|
|
|
|
|
|
|
|
Stockholders' equity to assets |
|
9.22 |
% |
|
|
8.80 |
% |
|
|
9.84 |
% |
|
|
10.17 |
% |
|
|
10.39 |
% |
Tangible
common equity to tangible assets (1) |
|
9.05 |
% |
|
|
8.63 |
% |
|
|
9.65 |
% |
|
|
9.98 |
% |
|
|
10.20 |
% |
|
|
|
|
|
|
|
|
|
|
Common
shares outstanding |
|
30,719,591 |
|
|
|
30,657,629 |
|
|
|
30,622,741 |
|
|
|
30,799,624 |
|
|
|
31,173,881 |
|
Tangible
common equity per common share |
$ |
17.95 |
|
|
$ |
17.47 |
|
|
$ |
17.67 |
|
|
$ |
17.90 |
|
|
$ |
18.05 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) There were no preferred
shares outstanding at the periods indicated. |
|
|
|
|
|
|
|
|
Paycheck Protection Program
In response to the COVID-19 pandemic, the
Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”)
was adopted, which included authorization for the U.S. Small
Business Administration (the “SBA”) to introduce a new program,
entitled the “Paycheck Protection Program,” which provides loans
for eligible businesses through the SBA’s 7(a) loan guaranty
program. These loans are fully guaranteed and available for loan
forgiveness of up to the full principal amount so long as certain
employee and compensation levels of the business are maintained and
the proceeds of the loan are used as required under the program.
The Paycheck Protection Program (“PPP”) and loan forgiveness are
intended to provide economic relief to small businesses nationwide
adversely impacted under the COVID-19 pandemic.
Hanmi participated in this program and the
financial information for the 2020 third quarter reflects this
participation. This table below shows financial information
excluding the effect of the origination of the PPP loans, including
the corresponding interest income earned on such loans, which
constitutes a non-GAAP measure. Management believes the
presentation of certain financial measures excluding the effect of
PPP loans provides useful supplemental information that is
essential to a proper understanding of the financial condition and
results of operations 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 financial
measures that may be used by other companies.
PPP Non-GAAP Financial Data (Unaudited)(In
thousands, except ratios)
|
As of
September 30, 2020 |
|
As of June
30, 2020 |
|
|
|
|
Tangible assets |
|
6,095,105 |
|
|
$ |
6,206,421 |
|
Less PPP loans |
|
(302,929 |
) |
|
|
(301,836 |
) |
Tangible
assets adjusted for PPP loans |
$ |
5,792,176 |
|
|
$ |
5,904,585 |
|
|
|
|
|
Tangible
stockholders' equity |
|
551,526 |
|
|
$ |
535,694 |
|
|
|
|
|
Tangible
common equity to tangible assets (1) |
|
9.05 |
% |
|
|
8.63 |
% |
Tangible
common equity to tangible assets adjusted for PPP loans (1) |
|
9.52 |
% |
|
|
9.07 |
% |
|
|
|
|
(1) There
were no preferred shares outstanding at September 30, 2020 |
|
|
|
|
|
|
|
Allowance
for credit losses |
|
86,620 |
|
|
$ |
86,330 |
|
|
|
|
|
Loans
receivable |
|
4,834,137 |
|
|
$ |
4,825,642 |
|
Less PPP loans |
|
(302,929 |
) |
|
|
(301,836 |
) |
Loans
receivable adjusted for PPP loans |
$ |
4,531,208 |
|
|
$ |
4,523,806 |
|
|
|
|
|
Allowance
for credit losses to loans receivable |
|
1.79 |
% |
|
|
1.79 |
% |
Allowance
for credit losses to loans receivable adjusted for PPP loans |
|
1.91 |
% |
|
|
1.91 |
% |
|
|
|
|
|
For the
Three Months Ended September 30, 2020 |
|
For the
Three Months Ended June 30, 2020 |
Net interest
income |
$ |
45,605 |
|
|
$ |
44,442 |
|
Less PPP loan interest income |
|
(1,713 |
) |
|
|
(1,129 |
) |
Net interest
income adjusted for PPP loans |
$ |
43,892 |
|
|
$ |
43,313 |
|
|
|
|
|
Average
interest-earning assets |
|
5,787,667 |
|
|
$ |
5,673,321 |
|
Less average PPP loans |
|
(302,365 |
) |
|
|
(251,758 |
) |
Average
interest-earning assets adjusted for PPP loans |
$ |
5,485,302 |
|
|
$ |
5,421,563 |
|
|
|
|
|
Net interest
margin (1) |
|
3.13 |
% |
|
|
3.15 |
% |
Net interest
margin adjusted for PPP loans (1) |
|
3.18 |
% |
|
|
3.21 |
% |
|
|
|
|
(1) net interest income (as applicable) divided by average
interest-earning assets (as applicable), annualized |
|
|
|
|
|
|
Noninterest
expense |
|
29,924 |
|
|
$ |
27,138 |
|
Less PPP deferred origination costs |
|
- |
|
|
|
3,064 |
|
Noninterest
expense adjusted for PPP loans |
$ |
29,924 |
|
|
$ |
30,202 |
|
|
|
|
|
Net interest
income plus noninterest income |
$ |
52,745 |
|
|
$ |
65,373 |
|
Less net gain on sales of securities |
|
- |
|
|
|
(15,712 |
) |
Net interest
income plus noninterest income adjusted for net securities
gains |
$ |
52,745 |
|
|
$ |
49,661 |
|
|
|
|
|
Efficiency
ratio (1) |
|
56.73 |
% |
|
|
41.51 |
% |
Efficiency
ratio adjusted for PPP loans and securities gains (1) |
|
56.73 |
% |
|
|
60.82 |
% |
|
|
|
|
(1) noninterest expense (as applicable) divided by the sum of net
interest income and noninterest income (as applicable) |
|
|
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