Hanmi Financial Corporation · NASDAQ:HAFC
Hanmi Financial — IPO Roadshow (March 2017)
37 slides from Hanmi Financial's IPO roadshow presentation, Mar 14, 2017
Slide 1: Subordinated Notes Offering March 2017
Subordinated Notes Offering March 2017 217 217 217 156 199 206 14 88 196 40 54 88 74 102 172 64 64 64 144 186 255 Free Writing Prospectus Dated March 14, 2017 Filed Pursuant to Rule 433 Registration No. 333-216668
Slide 2: Safe Harbor Statements
Safe Harbor Statements This presentation has been prepared by Hanmi Financial Corporation (“Hanmi Financial” or the “Company”) solely for informational purposes based on information regarding its operations, as well as information from public sources. This presentation has been prepared to assist in
Slide 3: Safe Harbor Statements
Safe Harbor Statements 217 217 217 156 199 206 14 88 196 40 54 88 74 102 172 64 64 64 144 186 255 Registration Statement Hanmi Financial has filed a registration statement (File No. 333-216668) (including a prospectus) and a prospectus supplement which is preliminary and subject to completion, with
Slide 4: Terms of Proposed Offering
Terms of Proposed Offering Issuer: Hanmi Financial Corporation (NASDAQ: HAFC) Security: Fixed-to-Floating Rate Subordinated Notes Due 2027 Credit Rating: BBB by Kroll Bond Rating Agency Aggregate Principal Amount: $100 million Term: 10 Years Optional Redemption: Optional redemption 5 years after iss
Slide 5: Hanmi Financial Corporation Profile
Chicago, IL First Korean American Bank Founded 1982; Nasdaq listed 2001 Expanding to wider Asian American & other demographic communities Attractive customer demographics Leading brand affinity & loyal customer base (44% of customers with bank for 10+ years) New leadership team beginning in 2013 sta
Slide 6: Significant Milestones Since 1982
Significant Milestones Since 1982 Hanmi Financial Corporation stock listed on NASDAQ 1982 Completed $70 million secondarycommon stock offering First Public Offering of Hanmi Stock through Sutro & Co. 2010 2014 C. G. Kum assumed role as CEO 2012 Completed acquisition of Central Bancorp Hanmi Bank – f
Slide 7: Strategically Focused Branch Platform With Potential for Further Growth
Strategically Focused Branch Platform With Potential for Further Growth in Existing Markets Branches (41) LPOs (6) 217 217 217 156 199 206 14 88 196 40 54 88 74 102 172 64 64 64 144 186 255
Slide 8: Market Demographics and Market Share
Market Demographics and Market Share 217 217 217 156 199 206 14 88 196 40 54 88 74 102 172 64 64 64 144 186 255 Korean-American Banks include Hope Bancorp, Inc., Hanmi Financial Corporation, Woori America Bank, Pacific City Financial Corporation, Shinhan Bank America, Commonwealth Business Bank, Met
Slide 9: Key Highlights
Key Highlights Net income was $56.5 million or $1.75 per diluted share, up 5.0% or $0.07 per share from last year reflecting an 8.2% growth in net interest income and a 6.2% decline in noninterest expense Loans receivable of $3.84 billion, up 20.8% from a year ago driven by 2016 loan production of $
Slide 10: Strong Earnings Performance
($ In millions) Strong Earnings Performance ($ In millions) (2) Includes a $47.4 million net tax benefit from the DTA valuation allowance reversal. (1) 217 217 217 156 199 206 14 88 196 40 54 88 74 102 172 64 64 64 144 186 255 (1) Excludes nonrecurring income. See Appendix for reconciliation of Non-
Slide 11: Strong Historical Profitability
ROAA Strong Historical Profitability * SNL US Bank Index includes all major exchange banks in SNL’s coverage universe. Information as of March 7, 2017. Note: The year ending December 31, 2012 includes a $47.4 million net tax benefit from the DTA valuation allowance reversal. ROAE 217 217 217 156 199
Slide 12: Strong Historical Profitability (Cont'd.)
Net Interest Margin Strong Historical Profitability (Cont’d.) Efficiency ratio for HAFC excludes merger and integration costs. SNL US Bank Index includes all major exchange banks in SNL’s coverage universe. Information as of March 7, 2017. See Appendix for reconciliation of Non-GAAP Measures. Effici
Slide 13: Total Loan Portfolio Composition
Total Loan Portfolio Composition 217 217 217 156 199 206 14 88 196 40 54 88 74 102 172 64 64 64 144 186 255 Historical Non-Owner Occupied CRE information has been adjusted to include Hotel/Motel loans previously identified as Owner-Occupied CRE. Please see the appendix for detail on owner-occupied C
Slide 14: Non-Owner Occupied CRE Loan Concentration
Non-Owner Occupied CRE Loan Concentration¹ 217 217 217 156 199 206 14 88 196 74 102 172 64 64 64 144 186 255 CRE Loans as a % of Risk-Based Capital² Construction Loans as a % of Risk-Based Capital Non-Owner Occupied CRE from 2008 – 2014 have been adjusted to include Hotel/Motel loans previously iden
Slide 15: Credit Culture Fundamentals
Credit Culture Fundamentals – Conservative Policies and Monitoring for Enhanced Diligence 217 217 217 156 199 206 14 88 196 40 54 88 74 102 172 64 64 64 144 186 255 Conservative credit culture with well-defined policies and procedures Dual and committee authority structure for loan approval Stress t
Slide 16: Strong Asset Quality
Net Charge-offs/ Avg. Loans Strong Asset Quality Nonperforming loans consist of nonaccrual loans and leases and loans and leases past due 90 days or more and still accruing; excludes PCI loans. Excludes PCI loans. NPLs¹ / Loans² 217 217 217 156 199 206 14 88 196 40 54 88 74 102 172 64 64 64 144 186
Slide 17: Strong Asset Quality (Cont'd.)
Allowance for Loan Losses/ Loans HFI Strong Asset Quality (Cont’d.) Allowance for Loan Losses¹ / NPLs² 217 217 217 156 199 206 14 88 196 40 54 88 74 102 172 64 64 64 144 186 255 New Leadership New Leadership Excludes allowance for loan losses on PCI loans. Nonperforming loans consist of nonaccrual l
Slide 18: Texas Ratio
Texas Ratio 217 217 217 156 199 206 14 88 196 40 54 88 74 102 172 64 64 64 144 186 255 New Leadership Note: Texas Ratio is defined as the sum of nonperforming loans (consisting of nonaccrual loans and leases and loans and leases past due 90 days or more and still accruing, but excluding PCI loans),
Slide 19: Increasing Core Deposits
($ In millions) Increasing Core Deposits 217 217 217 156 199 206 14 88 196 40 54 88 74 102 172 64 64 64 144 186 255 Core deposits defined as total deposits less jumbo deposits > $100,000.
Slide 20: Summary of Funding
Summary of Funding 217 217 217 156 199 206 14 88 196 40 54 88 74 102 172 64 64 64 144 186 255 Excludes brokered deposits, California CDs and local agency deposits. Trust Preferred has a fair value of $19.0 million on HAFC’s balance sheet.
Slide 21: Summary of Securities Portfolio
Summary of Securities Portfolio 217 217 217 156 199 206 14 88 196 40 54 88 74 102 172 64 64 64 144 186 255 100% Available-For-Sale No other than temporary impaired charges recognized Average duration of 4.4 years Yield on securities portfolio of 2.15%² All securities are investment grade or better $
Slide 22: Rate Sensitive Loan Portfolio
$533M @5.19% $961 million @4.53% $533 million @5.19% Remains well-positioned for a rising interest rate environment $533M @5.19% Rate Sensitive Loan Portfolio 217 217 217 156 199 206 14 88 196 40 54 88 74 102 172 64 64 64 144 186 255 ($ in millions) Amount WAR Variable $1,020.768 4.5699999999999998E
Slide 23: The Company Strong Regulatory Capital Ratios
The Company Strong Regulatory Capital Ratios 217 217 217 156 199 206 14 88 196 40 54 88 74 102 172 64 64 64 144 186 255 See Appendix for reconciliation of Non-GAAP Measures.
Slide 24: The Bank Strong Regulatory Capital Ratios
The Bank Strong Regulatory Capital Ratios (Cont’d.) 217 217 217 156 199 206 14 88 196 40 54 88 74 102 172 64 64 64 144 186 255 See Appendix for reconciliation of Non-GAAP Measures.
Slide 25: Pro Forma Capital Ratios
Pro Forma Capital Ratios 217 217 217 156 199 206 14 88 196 40 54 88 74 102 172 64 64 64 144 186 255 The Company The Bank Note: Assumes 92.5% of $100 million in gross proceeds from the offering is downstreamed to the Bank. Assumes 100% risk-weighting of assets.
Slide 26: Historical Interest Coverage
Historical Interest Coverage 217 217 217 156 199 206 14 88 196 40 54 88 74 102 172 64 64 64 144 186 255 Note: Amount downstreamed to the Bank represents proceeds from the offering excluding estimated offering expenses and the retention of one year of interest payments in cash. Coupon of 5.50% coupon
Slide 27: Sources of Holding Company Liquidity
Sources of Holding Company Liquidity Hanmi Financial Corporation’s main source of liquidity is dividends from its subsidiary, Hanmi Bank Dividend capacity from the Bank is $22.7 million in retained earnings without prior regulatory approval, as of December 31, 2016 $3.9 million of cash and equivalen
Slide 28: Summary of Hanmi Financial Corporation
Summary of Hanmi Financial Corporation 217 217 217 156 199 206 14 88 196 40 54 88 74 102 172 64 64 64 144 186 255 Leading Korean American Bank with long history of serving the Korean American market New leadership team beginning in 2013 staffed by professionals with significant banking experience in
Slide 29: Appendix
Appendix 217 217 217 156 199 206 14 88 196 40 54 88 74 102 172 64 64 64 144 186 255
Slide 30: Board of Directors
Board of Directors Joseph K. Rho ¢.G. Kum John J. Ahn Christie K. Chu Harry H. Chung. Seon-Hong "Paul" Kim Joon Hyung Lee David L. Rosenblum Thomas J. Williams Michael Yang Chairman of the Board President & CEO of Hanmi Bank President of B. Riley & Co., LLC Owner of CKC Accountancy Corp. CFO of Brea
Slide 31: Experienced Management Team
Experienced Management Team C.G. Kum President & CEO (40 Years of Experience) ̴ 4 Years at Hanmi C.G. Kum has served as President and Chief Executive Officer of Hanmi Financial Corporation and Hanmi Bank since June 2013. Previously he served as President and Chief Executive Officer of First Californ
Slide 32: HAFC Historical Financial Profile
HAFC Historical Financial Profile Nonperforming loans consist of nonaccrual loans and leases and loans and leases past due 90 days or more and still accruing. Excludes PCI loans. Excludes PCI loans. Source: SNL Financial and Company documents. 217 217 217 156 199 206 14 88 196 40 54 88 74 102 172 64
Slide 33: Well-positioned Under Varying Economic Environments
Well-positioned Under Varying Economic Environments 217 217 217 156 199 206 14 88 196 40 54 88 74 102 172 64 64 64 144 186 255 One-year projections
Slide 34: Non-GAAP Reconciliation
Non-GAAP Reconciliation 217 217 217 156 199 206 14 88 196 40 54 88 74 102 172 64 64 64 144 186 255 Note: Bank level financial information from Hanmi Bank Call Reports. Company Tangible Common Equity As of December 31, ($000) 2008 2009 2010 2011 2012 2013 2014 2015 2016 Stockholders' Equity (GAAP) $2
Slide 35: Non-GAAP Reconciliation (Cont'd.)
Non-GAAP Reconciliation (Cont’d.) 217 217 217 156 199 206 14 88 196 40 54 88 74 102 172 64 64 64 144 186 255 Net Interest Margin Reconciliation For the Year Ending December 31, ($000) 2008 2009 2010 2011 2012 2013 2014 2015 2016 Net Interest Income (GAAP) $134,401 $101,229 $105,874 $99,323 $98,537 $
Slide 36: Non-GAAP Reconciliation (Cont'd.)
Non-GAAP Reconciliation (Cont’d.) 217 217 217 156 199 206 14 88 196 40 54 88 74 102 172 64 64 64 144 186 255 Noninterest Income Excluding Nonrecurring Items For the Year Ending December 31, ($000s) 2012 2013 2014 2015 2016 Noninterest Income (GAAP) $21,413 $27,900 $42,296 $47,602 $33,075 Less: Dispo
Slide 37: Commercial Real Estate Reconciliation
Commercial Real Estate Reconciliation 217 217 217 156 199 206 14 88 196 40 54 88 74 102 172 64 64 64 144 186 255 2008 – 2014 have been adjusted to exclude Hotel/Motel loans previously identified as Owner-Occupied CRE. Commercial Real Estate as outlined in the regulatory agencies guidance on commerci