Hanmi Financial Corporation · NASDAQ:HAFC
Hanmi Financial — Non-Deal Roadshow (June 2022)
37 slides from Hanmi Financial's roadshow presentation, Jun 8, 2022
Slide 1: Janney Non-Deal Roadshow June 2022
Janney Non - Deal Roadshow June 2022 Los Angeles New York/ New Jersey Virginia Chicago Dallas Houston San Francisco San Diego
Slide 2: Forward-Looking Statements
Hanmi Financial Corporation (the “Company”) cautions investors that any statements contained herein that are not historical facts are forward - looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995 , including, but not limited t
Slide 3: Hanmi Franchise at a Glance
Hanmi Franchise at a Glance Loans $5.3B Deposits $5.8B TCE/TA (2) Ratio 9.07% Second Largest Korean - American Bank in the U.S. • Founded in 1982 in Los Angeles, as the first Korean - American bank • 35 full - service branches and 8 loan production offices across 9 states • Focused on MSAs with high
Slide 4: Management Team
Name Position Banking Experience (Years) Hanmi Experience (Years) Previous Experience Bonnie Lee President & CEO 36 9 BBCN Bancorp, Shinhan Bank America, Nara Bank Romolo Santarosa SEVP, Chief Financial Officer 31 7 Opus Bank, First California Financial Group Anthony Kim EVP, Chief Banking Officer 2
Slide 5: The Hanmi Story
The Hanmi Story “For 40 years, we have been dedicated to helping our stakeholders bank on their dreams . Our close customer partnerships , along with our deep community ties , have enabled Hanmi to grow and flourish and position us exceptionally well for the next 40 years.” 1982 1988 2001 2004 Acqui
Slide 6: Why Hanmi?
Why Hanmi? • Strong average loan growth reflecting an 11.3% CAGR since 2013 • Significant progress reducing CRE concentration from 85% of the total portfolio, as of December 31, 2013 to 71%, as of March 31, 2022, through portfolio diversification that includes leasing, residential mortgage, and mult
Slide 7: 1Q22 Highlights
1Q22 Highlights Diluted EPS $0.68 ROAA 1.22% NIM 3.10% Efficiency Ratio 53.29% TBVPS * $20.02 Net Income $20.7M *Non - GAAP financial measure; refer to the non - GAAP reconciliation slide • Net income was $20.7 million, or $0.68 per diluted share, down 37.9% from $33.3 million, or $1.09 per diluted
Slide 8: Income Statement Summary
EPS - Diluted $ 0.68 $ 1.09 $ 0.54 ($ million, except EPS) Change (1) 1Q22 4Q21 1Q21 Q/Q Y/Y Income Statement Summary Net interest income $ 51.0 $ 49.5 $ 46.0 2.9% 10.8% Noninterest income 8.5 9.3 9.8 - 8.3% - 13.1% Operating revenue 59.5 58.8 55.8 1.2% 6.6% Noninterest expense 31.7 31.6 29.5 0.2% 7
Slide 9: Adjusted Pretax Pre-Provision Income
Adjusted Pretax Pre - Provision Income (3) • Adjusted pretax, pre - provision income (3) for 1Q22 up 26% compared with the same quarter last year • Adjusted operating revenue (3) remained relatively even at $59.5 million compared with the prior quarter • Adjusted operating revenue (3) includes tradi
Slide 10: Loan Trend
Loan Trend $4,039 $3,423 $2,902 $2,441 $2,157 $4,456 $4,508 $4,685 $4,795 $5,232 2013 2014 2015 2016 2019 2020 2021 1Q22 2017 2018 Average Loans Receivable Strong average loan growth reflecting an 11.3% CAGR since 2013. ($ in millions) 10
Slide 11: Successful Portfolio Diversification Strategy
Successful Portfolio Diversification Strategy Loan Composition 3/31/2022 Loan Composition 12/31/2013 CRE – 85% C&I – 10% RRE & Consumer – 5% Significant progress reducing CRE concentration from 85% of total portfolio to 71% $2.23 Billion $5.34 Billion 11.2% CAGR CRE – 71% 11 RRE & Consumer – 8% C&I
Slide 12: Loan Portfolio Composition
Loan Portfolio Composition RRE & Consumer Portfolio $ in millions Outstanding $433 1Q22 Average Yield 3.46% Commercial & Industrial Portfolio $ in millions Outstanding $633 1Q22 Average Yield 4.06% Commercial Real Estate Portfolio $ in millions Outstanding $3,771 1Q22 Average Yield 4.17% $5.34 Billi
Slide 13: CRE Portfolio Composition
Owner Occupied – $719 19% Multifamily – $321 9% Construction – $88 2% Investor Occupied – $2,642 70% 13 CRE Portfolio Composition Construction # of Loans 11 Average Balance ($ in millions) $8.0 Weighted Average Loan - to - Value Ratio (2) 47.1% Weighted Average Debt Coverage Ratio N/A Multifamily #
Slide 14: Loan Portfolio Diversification
Loan Portfolio Diversification Loan portfolio is well diversified across property and business types. Hospitality – 20% Retail – 27% Office – 12% Gas Station – 6% Multifamily – 9% Industrial – 6% Mixed Use – 5% Construction – 2% Other 13% Manufacturing – 29% 14 Wholesale Trade – 21% Retail Trade – 9
Slide 15: CRE Portfolio Geographical Exposure
CRE Portfolio Geographical Exposure CRE Composition by State $3,771M Multifamily by State $321M Construction by State $88M Owner Occupied by State $719M Investor Occupied by State $2,643M ($ in millions) California – $2,692 71% Other – $479 13% Texas – $363 10% New York – $156 4% Illinois – $81 2% C
Slide 16: Hospitality Segment by Location Type
Hospitality Segment by Location Type Total Hospitality Segment: $737M (1) Segment represents exposure across the loan portfolio, inclusive of CRE and C&I (2) Metropolitan is categorized as a location that is in a major city and in proximity to downtown areas; destination is categorized as a hotel wh
Slide 17: Securities Portfolio
Securities Portfolio 17 The composition of the securities portfolio remains relatively unchanged quarter - over - quarter, with allocation to U.S. treasuries, municipal securities, and U.S. government agencies and sponsored agencies – mortgage backed securities, collateralized mortgage obligations,
Slide 18: Premier Core Deposit
$3,808 $4,349 $4,747 $4,699 $5,275 $5,786 $5,783 2013 2016 2017 2018 2021 1Q22 2014 2015 Demand Noninterest - bearing 2019 2020 Money Market & Savings Demand Interest - bearing Time Deposits 36% 2% Premier Core Deposit Strong deposit growth reflecting a 10.6% CAGR since 2013. Noninterest - bearing d
Slide 19: Net Interest Income | Net Interest Margin
Net Interest Income | Net Interest Margin $176.8 $181.0 $175.9 $180.9 $195.1 3.82% 3.57% 3.37% 3.08% 3.19% 3.23% 3.05% 2019 2020 2021 2017 2018 Net Interest Income NIM NIM excluding PPP loans Net interest income was $51.0 million for the first quarter compared with $49.5 million for the prior quarte
Slide 20: Noninterest Income
Noninterest Income Noninterest Income ($ in millions) Service Charges and Fees (as of 1Q22) ($ in millions) $18.1 $26.6 $47.9 $36.6 $29.6 10.66% 12.55% 11.85% 10.98% 9.85% 1Q21 2Q21 3Q21 1Q22 4Q21 SBA Trade Premium SBA Loan Sales Noninterest income was $8.5 million for the first quarter compared wit
Slide 21: Noninterest Expenses
Noninterest Expenses 52.92% 52.66% 52.01% 53.81% 53.29% 3Q21 4Q21 1Q22 Efficiency Ratio (2) 2.30% 2.19% 2.30% 2.02% 1.90% 2017 2018 2019 2020 (1) 2021 NIE/Avg. Assets 54.28% 57.20% 61.89% 53.15% 52.84% 2017 2018 2019 (2) 2021 1Q21 2Q21 (2) 2020 Efficiency Ratio 1.90% 21 1.91% 1.95% 1.85% 1.84% 1Q21
Slide 22: Capital Management
Capital Management • Tangible book value per share (TBVPS) grew by 8% in the last twelve months • 1Q22 TBVPS (1) and TCE/TA (1) ratio was impacted by $36.4 million unrealized after - tax loss recorded in AOCI due to changes in the value of the securities portfolio stemming from increased interest ra
Slide 23: ACL Analysis
ACL Analysis Allowance for credit losses was $71.5 million as of March 31, 2022 generating an allowance for credit losses to loans of 1.34% compared with 1.41% at the end of the prior quarter. ($ in millions) 23 March 31, 2022 December 31, 2021 September 30, 2021 June 30, 2021 March 31, 2021 Allowan
Slide 24: Asset Quality – Criticized Loans
Asset Quality – Criticized Loans 24 Total criticized loans increased by 27% quarter - over - quarter. Note: Numbers may not add due to rounding • Special mention loans were $141.0 million at March 31, 2022 compared with $95.3 million at December 31, 2021 o Reductions / upgrades include upgrades to p
Slide 25: Asset Quality – Nonaccrual Loans
Asset Quality – Nonaccrual Loans Nonaccrual loans decreased 14% quarter - over - quarter. ($ in millions) Note: Numbers may not add due to rounding (1) Specific allowance for credit losses at December 31, 2021 and March 31, 2022 was $2.8 million and $2.2 million, respectively (2) RRE includes Consum
Slide 26: Asset Quality – New CRE Originations
Asset Quality – New CRE Originations 53.8% 49.5% 57.6% 54.3% 42.1% 1Q21 2Q21 3Q21 4Q21 1Q22 Weighted Average Loan to Value 2.02x 1.64x 1.56x 1.78x 2.14x 1Q21 2Q21 3Q21 4Q21 1Q22 Weighted Average Debt Coverage Ratio (1) Revised LTV to include LHFS, not yet sold. Previously reported 50.9%, 56.4%, and
Slide 27: Liquidity
Liquidity Cash and due from banks to assets ratio decreased to 4.6% from 8.9% in the prior quarter. Liquid Asset Ratio (1) (1) Liquid asset ratio is the sum of cash and due from banks, unpledged AFS securities, and AFS SBA loans as a percentage of total assets Cash and Due From Banks as a Percentage
Slide 28: Strong Company Culture and ESG Commitment
Strong Company Culture and ESG Commitment We are challenging ourselves to do more and lead the way to achieve our vision of the Company • Seasoned team with deep community ties • Close customer partnerships • Investments in talent and technology Strong Company Culture Commitment to ESG 67% Female ~8
Slide 29: Appendix
Appendix 29
Slide 30: Non-GAAP Reconciliation – Tangible Common Equity to Tangible Asset Ratio
Non - GAAP Reconciliation – Tangible Common Equity to Tangible Asset Ratio March 31, 2022 $ 6,737,052 (11,353) $ 6,725,699 $ 621,452 (11,353) $ 610,099 9.22% 9.07% 30,468,458 $ 20.02 September 30, 2021 $ 6,776,533 (11,450) $ 6,765,083 $ 619,055 (11,450) $ 607,605 9.14% 8.98% 30,441,601 $ 19.96 March
Slide 31: Non-GAAP Reconciliation – Pretax Pre-Provision Income
Non - GAAP Reconciliation – Pretax Pre - Provision Income ($ in millions) 1Q22 4Q21 3Q21 2Q21 1Q21 Pretax income $ 29.2 $ 43.1 $ 37.2 $ 31.0 $ 24.2 less credit loss expense (1.4) (16.0) (7.2) (3.3) 2.1 Pretax, Pre - provision, income $ 27.8 $ 27.2 $ 30.0 $ 27.7 $ 26.3 less income from PPP gains - -
Slide 32: Non-GAAP Reconciliation – PPP (FY 2021)
Non - GAAP Reconciliation – PPP (FY 2021) (1) Net interest income (as applicable) divided by average interest - earning assets (as applicable), annualized (2) Noninterest expense (as applicable) divided by the sum of net interest income and noninterest income (as applicable) In response to the COVID
Slide 33: Non-GAAP Reconciliation – PPP (4Q21)
Non - GAAP Reconciliation – PPP (4Q21) As of December 31, 2021 Tangible Common Equity to Tangible Assets Tangible assets $ 6,847,192 Less first and second draw PPP loans (2,976) Tangible assets adjusted for PPP loans $ 6,844,216 Tangible stockholders' equity (1) $ 632,022 TCE / TA Ratio (1) 9.23% TC
Slide 34: Non-GAAP Reconciliation – PPP (3Q21)
Non - GAAP Reconciliation – PPP (3Q21) As of September 30, 2021 Tangible Common Equity to Tangible Assets Tangible assets $ 6,765,083 Less first and second draw PPP loans (21,895) Tangible assets adjusted for PPP loans $ 6,743,188 Tangible stockholders' equity (1) $ 607,605 TCE / TA Ratio (1) 8.98%
Slide 35: Non-GAAP Reconciliation – PPP (2Q21)
Non - GAAP Reconciliation – PPP (2Q21) GAAP financial measures that may be used by other companies. 35 As of June 30, 2021 Tangible Common Equity to Tangible Assets Tangible assets $ 6,567,352 Less first and second draw PPP loans (158,134) Tangible assets adjusted for PPP loans $ 6,409,218 Tangible
Slide 36: Non-GAAP Reconciliation – PPP (1Q21)
Non - GAAP Reconciliation – PPP (1Q21) As of March 31, 2021 Tangible Common Equity to Tangible Assets Tangible assets $ 6,426,843 Less first and second draw PPP loans (278,200) Tangible assets adjusted for PPP loans $ 6,148,643 Tangible stockholders' equity (1) $ 570,264 TCE / TA Ratio (1) 8.87% TCE
Slide 37: Non-GAAP Reconciliation – PPP (FY 2020)
Non - GAAP Reconciliation – PPP (FY 2020) GAAP financial measures that may be used by other companies. 37 (1) Net interest income (as applicable) divided by average interest - earning assets (as applicable), annualized (2) Noninterest expense (as applicable) divided by the sum of net interest income