Hanmi Financial Corporation · NASDAQ:HAFC
Hanmi Financial — Q2 2022 Earnings Presentation
26 slides from Hanmi Financial's earnings presentation, Jul 26, 2022
Slide 1: 2Q22 Earnings Supplemental Presentation
Los Angeles New York/ New Jersey Virginia Chicago Dallas Houston San Francisco San Diego 2Q22 Earnings Supplemental Presentation July 26, 2022
Slide 2: Forward-Looking Statements
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, incl
Slide 3: 2Q22 Highlights
2Q22 Highlights Net Income Diluted EPS ROAA ROAE NIM Efficiency Ratio TBVPS* $25.1M $0.82 1.45% 14.92% 3.55% 46.05% $19.91 • Net income was $25.1 million, or $0.82 per diluted share, up 21.0% from $20.7 million, or $0.68 per diluted share, for the prior quarter and up 13.2% from $22.1 million, or $0
Slide 4: Loan Production
Loan Production Strong momentum across our diverse business lines fueled our stellar loan production of $642.2 million in the second quarter, driving 6.0% loan growth quarter-over-quarter. Average interest 90000% 4.35% 4.60% rate on new ($ in millions) 4.50% 4.40% production 4.30% 3.90% 3.91% 3.95%
Slide 5: Loan Portfolio
Loan Portfolio $5.66 Billion Loan Portfolio (as of 06/30/22) Commercial Real Estate Portfolio(1) CRE Investor (Non-owner) Occupied $ in millions # of Loans 979 Outstanding $3,830 Average Balance ($ in millions) $2.7 2Q22 Average Yield 4.26% Leasing (3) Weighted Average Loan-to-Value Ratio 51.7% - 10
Slide 6: Loan Portfolio Diversification
Loan Portfolio Diversification Loan portfolio is well diversified across collateral types and industry types; CRE represents 67.7% of the total portfolio and C&I represents 13.6%. CRE Portfolio C&I Portfolio $3.83B $767M Construction – 2% Other – 12% Mixed Use – Manufacturing – 5% Retail – 26% 29% O
Slide 7: CRE Portfolio Geographical Exposure
CRE Portfolio Geographical Exposure ($ in millions) Multifamily by State Construction by State $362M $95M CRE Composition by State Illinois – Other – $3,830M New York – $2 1% $17 4% Other – $50 14% $10 10% New York – $18 19% Illinois – Texas - $52 $78 14% 2% Other – California – $512 California – $6
Slide 8: Hospitality Segment by Location Type
Hospitality Segment by Location Type Hospitality segment(1) declined by 28.2% since 1Q20 to $672.5 million at 2Q22, representing 11.9% of the loan portfolio. Convention Casino – Center – 1% 4% • Average balance within the segment was $3 million Airport – 8% • Weighted average debt coverage ratio of
Slide 9: Residential Real Estate Portfolio
Residential Real Estate Portfolio The RRE(1) portfolio was $521.6 million for the second quarter, representing 9.2% of the total loan portfolio. Our conservative underwriting policy focuses on high-quality mortgage origination with maximum LTV between 60% and 70%, maximum DTI of 43% and minimum FICO
Slide 10: Leasing Portfolio
Leasing Portfolio A $537.4 million equipment finance portfolio, with an average size of $45 thousand, is diversified by industry, equipment type and geography. Portfolio by Industry Portfolio by Equipment Portfolio by State (As a % of total portfolio) (As a % of total portfolio) (As a % of total por
Slide 11: Deposit Base
Deposit Base Deposits increased to $5.98 billion, up 3.4% from the prior quarter and up 6.2% from the same quarter last year. • Noninterest-bearing demand deposits increased 3.9% from the prior quarter and 18.2% from the same quarter last year • Noninterest-bearing demand deposits increased to 46.5%
Slide 12: Net Interest Income | Net Interest Margin
Net Interest Income | Net Interest Margin Net interest income was $59.0 million for the second quarter compared with $51.0 million for the prior quarter; net interest margin for the quarter was 3.55% compared with 3.10% for the prior quarter. 0.14% 0.02% 0.32% 3.55% (0.03%) 3.19% 3.07% 3.10% 2.96% 3
Slide 13: Net Interest Income Sensitivity
Net Interest Income Sensitivity 28.1% of the loan portfolio reprices within 1-3 months. Loans – Months to Reset / Maturity ($ in . millions) Fed Funds Rate & Cost of CDs 1.75% Fed Cost of Funds $2,170.6 CDs(1) 0.59% 0.46% 0.50% 0.39% Rate(2) 0.25% 0.25% 0.25% 0.35% 0.39% $1,763.9 $550.9 2Q21 3Q21 4Q
Slide 14: Noninterest Income
Noninterest Income Noninterest income was $9.3 million for the second quarter compared with $8.5 million for the prior quarter primarily due to higher trade finance, other service fees and higher SBA gains. Noninterest Income ($ in in millions) millions) Service Charges Service Charges and Fees(as a
Slide 15: Noninterest Expense
Noninterest Expense Continued focus on disciplined expense management. $50 1.91% 1.95% 2.00% 1.85% 1.86% Noninterest 1.83% expense / Average assets • Noninterest expense was $31.5 million in $32.5 the second quarter, down 0.7% from the $31.6 $31.7 $31.5 prior quarter and up 2.2% from the same $30.8
Slide 16: ACL Trends
ACL Trends Allowance for credit losses was $73.1 million as of June 30, 2022 generating an allowance for credit losses to loans of 1.29% compared with 1.34% at the end of the prior quarter. Allowance for Credit Losses Credit Loss Expense (Recovery) $100 2.00% 1.73% 1.80% $7 0.08% -0.07% -0.01% 0.01%
Slide 17: ACL Analysis by Loan Type
ACL Analysis by Loan Type ($ in millions) June 30, 2022 March 31, 2022 December 31, 2021 September 30, 2021 June 30, 2021 Allowance Loans Allowance Loans Allowance Loans Allowance Loans Allowance Loans CRE $ 45.6 $ 3,829.7 $45.9 $3,771.5 $48.4 $3,701.9 $55.3 $3,528.5 $62.3 $3,452.0 C&I 14.3 766.8 12
Slide 18: Asset Quality
Asset Quality Nonperforming Assets Criticized Loans 3.52% 3.14% 2.94% 0.80% $70 2.27% 0.32% $231.9 1.92% Criticized $60 Nonperforming $213.0 loans / $52.7 0.20% 0.18% 0.17% assets / $198.4 Total assets Total assets $50 $0.7 $121.8 $155.9 $40 $130.6 $133.5 $141.0 $30 $95.3 $52.0 $21.9 $80.5 $20 $14.0
Slide 19: Asset Quality – Nonaccrual Loans
Asset Quality – Nonaccrual Loans Nonaccrual loans decreased 3.7% quarter-over-quarter. ($ in millions) $39.6 $9.1 $10.0 $21.2 (2) (2) $7.0 (2) $9.7 (1) $13.4 (1) $11.5 (1) $11.0 $4.8 $5.1 $1.7 $4.2 $3.9 $2.5 $1.2 $1.2 $1.3 $9.1 $6.9 $7.1 $6.1 $5.8 2Q21 3Q21 4Q21 1Q22 2Q22 (2) Lease RRE All other CRE
Slide 20: Capital Management
Capital Management Consistent track record of prudent capital management. $20.79 $20.02 $19.91 $19.96 $19.27 9.23% • Tangible book value per share 9.07% (TBVPS) grew by 3% in the last 9.01% 8.98% 8.74% twelve months 2Q21 3Q21 4Q21 1Q22 2Q22 • 2Q22 TBVPS(1) and TCE/TA(1) ratio (1) (1) were impacted b
Slide 21: Appendix
Appendix A Hanmi Financial Corporation: 21
Slide 22: 2Q22 Financial Summary
2Q22 Financial Summary ($ in millions, except EPS) Change(1) June 30, 2022 March 31, 2022 June 30, 2021 Q/Q Y/Y Income Statement Summary Net interest income $ 59.0 $ 51.0 $ 49.6 15.9% 19.1% Noninterest income 9.3 8.5 8.9 9.3% 4.8% Operating revenue 68.3 59.5 58.5 14.9% 16.8% Noninterest expense 31.5
Slide 23: Non-GAAP Reconciliation: Tangible Common Equity to Tangible Asset Ratio
Non-GAAP Reconciliation: Tangible Common Equity to Tangible Asset Ratio June 30, March 31, December 31, September 30, June 30, Hanmi Financial Corporation 2022 2022 2021 2021 2021 Assets $ 6,955,968 $ 6,737,052 $ 6,858,587 $ 6,776,533 $ 6,578,856 Less goodwill and other intangible assets (11,310) (1
Slide 24: Non-GAAP Reconciliation – PPP (4Q21)
Non-GAAP Reconciliation – PPP (4Q21) ($ in thousands, except share and per share data) Three Months Ended As of December 31, 2021 December 31, 2021 Tangible Common Equity to Tangible Assets Net Interest Margin Tangible assets $ 6,847,192 Net interest income $ 49,496 Less first and second draw PPP lo
Slide 25: Non-GAAP Reconciliation – PPP (3Q21)
Non-GAAP Reconciliation – PPP (3Q21) ($ in thousands, except share and per share data) Three Months Ended As of September 30, 2021 September 30, 2021 Tangible Common Equity to Tangible Assets Net Interest Margin Tangible assets $ 6,765,083 Net interest income $ 49,980 Less first and second draw PPP
Slide 26: Non-GAAP Reconciliation – PPP (2Q21)
Non-GAAP Reconciliation – PPP (2Q21) ($ in thousands, except share and per share data) Three Months Ended As of June 30, 2021 June 30, 2021 Tangible Common Equity to Tangible Assets Net Interest Margin Tangible assets $ 6,567,352 Net interest income $ 49,572 Less first and second draw PPP loans (158