Hanmi Financial Corporation · NASDAQ:HAFC
Hanmi Financial — Super Community Bank Conference 2004
36 slides from Hanmi Financial's conference presentation, Sep 8, 2004
Slide 1: Hanmi Financial Corporation – Super Community Bank Conference
HANMI FINANCIAL CORPORATION Nasdaq: HAFC Super Community Bank Conference September 8-9, 2004
Slide 2: Safe Harbor Statement
Safe Harbor Statement Certain statements contained in this presentation, including, without limitation, statements containing the words "believes," "plans," "expects," "anticipates," and words of similar import, constitute "forward-looking statements" within the meaning of the Private Securities Lit
Slide 3: Stock Summary
Stock Summary Ticker Symbol: HAFC (Nasdaq) Recent Price1: $32.08 Shares Outstanding1: 24.5 million Market Capitalization: $786 million Average Daily Volume3: 84,000 shares TTM P/E2: 21.7 Annual Dividend: $0.40 per share Current Dividend Yield1: 1.2% 1. As of August 31, 2004 2. Trailing twelve months
Slide 4: Company Profile
Company Profile A leader in a high-growth niche market serving the Korean-American and other ethnic communities The 14th largest bank headquartered in California with $3.1 billion in assets as of June 30, 2004 Strong asset growth: 5-year CAGR of 22.4%
Slide 5: Korean-American Market Overview
Korean-American Market Overview One of the fastest growing ethnic groups 54% growth in the 1990s vs. 13% general population California has the highest Korean-American population in the US 40% out of total 2.1 million Highest rates of business ownership among ethnic groups 1 business per every 8 Kore
Slide 6: Target Market Growth Drivers
Target Market Growth Drivers Increased wealth in the Korean-American community Continuing immigration trend from Korea Unstable political/economic situation in Korea Better education opportunity for immigrants' children Investment diversification Characteristics of recent Korean immigrants Higher ne
Slide 7: Historical Highlights - Hanmi Bank
Historical Highlights - Hanmi Bank 1982 -The first Korean-American bank founded by local Korean-Americans 1997 - Total assets of $500 million with six branches 2000 - Total assets of $1 billion with 11 branches 2000 - Created Hanmi Financial Corporation 2001 - IPO on NASDAQ 2003 - Management realign
Slide 8: PUB Acquisition Summary
PUB Acquisition Summary Announcement date: December 22, 2003 Closing: April 30, 2004 Structure: $164.5 million in cash HAFC stock issuance to PUB: 5.95 million shares (tax-free stock exchange) Value: $324.7 million
Slide 9: Loan & Deposits Market Shares
Loan & Deposits Market Shares Hanmi + Pacific Union: Nearly 50% share among Korean-American banks in California HAFC 0.29 PUB 0.2 NARA 0.16 CLFC 0.17 WSBK 0.18 HAFC 0.31 PUB 0.18 NARA 0.15 CLFC 0.18 WSBK 0.18 Deposits Net Loans Note: As of December 31, 2003. Excludes 30% of Nara's balances, which ar
Slide 10: Hanmi & PUB's Market Area
Hanmi & PUB's Market Area Considerable branch overlap offers significant consolidation opportunities. Hanmi Bank Pacific Union Bank
Slide 11: PUB Acquisition Advances Hanmi's Business Strategy
PUB Acquisition Advances Hanmi's Business Strategy Increases market share in California Positions Hanmi as the clear market leader Increases brand awareness Creates significant opportunities to enhance efficiency Strengthens existing customer relationships while developing new relationships Expands
Slide 12: Experienced Management Team
Experienced Management Team Name Title Banking Experience Jae Whan Yoo President and CEO 29 years Michael J. Winiarski SVP and CFO 25 years Dong Il Kim SVP and CCO 25 years David W. Kim SVP and CAO 15 years Suki H. Murayama SVP and Regional Executive Officer (South) 29 years Eunice U. Lim SVP and Re
Slide 13: Hanmi's Business Focus
Hanmi's Business Focus Commercial and retail banking Primary focus: Korean-American community Cultivate banking relationships with other multi-ethnic communities Full suite of financial products and services Traditional depository, loan, and trade finance products Investment and insurance products P
Slide 14: New Business Initiatives: 2003-2004
New Business Initiatives: 2003-2004 Increased focus on profitability Margin expansion Transitioning into performance-based management Management realignment Retained high-performing senior managers Appointed experienced non-Koreans into key management positions Acquisition of a major competitor - Pa
Slide 15: PUB Merger Progress
PUB Merger Progress Integration process underway Working closely with Castle Creek and CBC Consulting Finalized major MIS vendor relationships 7 branch closures underway System conversion completed in August Initial round of staff reductions underway Successful customer retention Presently $3.9 mill
Slide 16: Successful Customer Retention
Successful Customer Retention ($ in millions) December 31, 2003 April 30, 20041 June 30, 20042 Total Deposits $863 $936 $821 Gross Loans $873 $876 $844 Former Pacific Union Bank 1Closing date of merger 2Inclusive of $104 million intentional non-profitable deposit run-off
Slide 17: Balance Sheet Summary
Balance Sheet Summary ($ in billions) 1999 2000 2001 2002 2003 2004 2Q Loans 0.47 0.62 0.82 1 1.27 2.22 Deposits 0.66 0.94 1.04 1.29 1.45 2.35 Assets 0.74 1.03 1.16 1.46 1.79 3.1 Financial Performance Consistent Balance Sheet Growth
Slide 18: Revenue Growth
Revenue Growth 1999 2000 2001 2002 2003 2004 6M Net interest income 33530 41538 43954 48262 56965 41144 Service charges and fee income 11229 12105 12533 13194 15053 9157 ($ in thousands)
Slide 19: Loan Portfolio
Loan Portfolio As of June 30, 2004 Construction Loans 77438 Consumer Loans 172706 Commercial Real Estate Loans 1409256 C & I Loans 559573 Other Loans 8393
Slide 20: Specialty Lending Activities
Specialty Lending Activities Robust SBA loan production 4th largest SBA lender in LA district in 2004 8th largest SBA lender in California in 2003 Specialized in low income housing lending $41 million low income housing loans booked in 2004 Sponsored four recipients of AHP grants awarded by the FHLB
Slide 21: Korean vs. Non Korean Business
Korean vs. Non Korean Business 1999 2000 2001 2002 2003 2004 6M* Korean New Loans 182.2 221.1 245.7 287.4 344.5 207.425 Non-Korean New Loans 84.3 75.4 136.3 165.5 278.4 184.525 ($ in millions) Hanmi has extended service to neighboring ethnic communities. 45% *2Q04 numbers do not reflect PUB loans. 2
Slide 22: Sound Asset Quality
Sound Asset Quality Loan Loss Allowance/Gross Loans 1999 2000 2001 2002 2003 2004 2Q Hanmi 0.0219 0.0189 0.0121 0.012 0.0116 0.0114 Non Performing Assets/Total Assets 1999 2000 2001 2002 2003 2004 2Q Hanmi 0.0041 0.0025 0.0043 0.0044 0.0049 0.0027
Slide 23: Solid Deposits Franchise
Solid Deposits Franchise 2002 3Q 2002 4Q 2003 1Q 2003 2Q 2003 3Q 2003 4Q 2004 1Q 2004 2Q Non-interest bearing 0.35 0.41 0.4 0.44 0.46 0.48 0.49 0.76 Savings and money market 0.32 0.29 0.29 0.3 0.3 0.3 0.38 0.66 Certificates of deposit 0.59 0.58 0.65 0.72 0.74 0.67 0.61 0.93 ($ in billions)
Slide 24: Deposits Composition
Deposits Composition Non-Interest Bearing 763163 Time Deposits of $100,000 or More 648238 Time Deposits of Less than $100,000 277564 Interest Bearing Demand and Savings 656275 As of June 30, 2004
Slide 25: Return on Average Equity / Assets
Return on Average Equity / Assets ROA ROE 1999 2000 2001 2002 2003 2004 6M* ROE 0.185 0.1981 0.1756 0.1508 0.1451 0.1241 ROA 0.0174 0.0178 0.0153 0.013 0.0118 0.0126 ROTE 0.1933 0.2045 0.1798 0.1535 0.1475 0.1875 18.75% *Performance ratios reflect YTD numbers annualized
Slide 26: Net Income and Diluted EPS
Net Income and Diluted EPS Diluted EPS 1999 2000 2001 2002 2003 (2003/2004) 6M Net Income 12 15.5 16.8 17 19.2 9.2 13.9 Net Income ($ in millions) 1999 2000 2001 2002 2003 (2003/2004) 6M Diluted EPS 0.88 1.14 1.21 1.2 1.34 0.64 0.78
Slide 27: Net Interest Margin Trend
Net Interest Margin Trend 2002 Q3 2002 Q4 2003 Q1 2003 Q2 2003 Q3 2003 Q4 2004 Q1 2004 Q2 NIM 0.0407 0.0376 0.0348 0.0361 0.0369 0.0373 0.0405 0.041 Wall Street Prime 0.0475 0.0425 0.0425 0.04 0.04 0.04 0.04 0.04
Slide 28: Efficiency Ratio Trend
Efficiency Ratio Trend *5.57% *Reflects one-time restructuring expenses related to the PUB merger 2002 Q3 2002 Q4 2003 Q1 2003 Q2 2003 Q3 2003 Q4 2004 Q1 2004 Q2 Efficiency Ratio 0.5147 0.5565 0.5374 0.528 0.5123 0.5131 0.4777 0.5181 Acquisition 0 0 0 0 0 0 0 0.0557
Slide 29: Stock Performance
Stock Performance Investing $100 (price reflects dividends) HAFC NASDAQ S & P Financials 12/1/2000 100 100 100 20.4 1/1/2004 115.11 112.23 99.57 31.6 2/1/2004 115.11 87.1 92.89 43.9 3/1/2004 117.02 74.49 90 4/1/2004 111.95 85.66 93.22 5/1/2004 116.01 85.43 96.79 6/1/2004 131.91 87.45 96.67 7/1/2004
Slide 30: New Business Initiatives: 2004-2005
New Business Initiatives: 2004-2005 Continued focus on profitability Completion of PUB merger integration Business relationship expansion through strategic alliances with major Korean banks Maximization of corporate/shareholder value
Slide 31: Compelling Investment Opportunity
Compelling Investment Opportunity Dominant franchise in the attractive, high growth California based Korean-American marketplace Experienced management team partnered with Castle Creek's proven capability integrating and operating highly profitable commercial banks Robust loan growth coupled with at
Slide 32: Hanmi Financial Corporation
HANMI FINANCIAL CORPORATION Nasdaq: HAFC
Slide 33: Addendum
Addendum
Slide 34: Experienced Management Team
Experienced Management Team Jae Whan Yoo - President & CEO Extensive experience in U.S. and Korean banking - 29 year banking career, including 10 years in the U.S. EVP responsible for Kor-Am Bank's operations in region comprising 25% of South Korea's GNP Previously served as director and board membe
Slide 35: Experienced Management Team
Experienced Management Team Dong Il Kim - Senior VP & CCO 25 years of banking experience Previously served as SVP & CCO and branch manager at Pacific Union Bank, Los Angeles Master's degrees in Economics from the State University of New York at Stony Brook and California State University, Los Angele
Slide 36: Experienced Management Team
Experienced Management Team Eunice U. Lim - Senior VP & Regional Executive Officer (North) 24 years of commercial banking experience Previously served as SVP & Manager at Olympic Branch of Pacific Union Bank BS in Mathematics at Kingston Poly Tech in Surrey, England Suki H. Murayama - Senior VP & Re
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