Hanmi Financial Corporation · NASDAQ:HAFC
Hanmi Financial — D.A. Davidson's 27th Annual Financial Institutions Conference (May 2025)
50 slides from Hanmi Financial's conference presentation, May 2025
Slide 1: D.A. Davidson's 27th Annual Financial Institutions Conference
NASDAQ | HAFC D.A. Davidson’s 27 Annual th Financial Institutions Conference May 5-7, 2025 California | Colorado | Georgia | Illinois | New Jersey | New York | Texas | Virginia | Washington
Slide 2: Table of Contents
HANMI PROFILE 05 – 20 TABLE OF 1Q25 PERFORMANCE RESULTS 21 – 37 CONTENTS LOAN PORTFOLIO DETAILS 38 – 47 1Q25 FINANCIAL SUMMARY 48 – 48 NON-GAAP RECONCILIATION 49 – 50 2
Slide 3: 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, in
Slide 4: Non-GAAP Financial Information
NON-GAAP FINANCIAL INFORMATION This presentation contains financial information determined by methods other than in accordance with accounting principles generally accepted in the United States of America (“GAAP”). These non-GAAP measures include tangible common equity to tangible assets, and tangib
Slide 5: Nationwide Network Investment Highlights
NATIONWIDE NETWORK 1 2 1 INVESTMENT 3 HIGHLIGHTS As of 1Q25 1 20 2 1 1 1 1 Branch $7.7B $6.3B TOTAL ASSETS LOANS 5 1 Loan Production Office (LPO) & Loan Centers $6.6B 9.8% DEPOSITS LOAN GROWTH(1) Experienced Second Largest Korean-American Bank in the U.S. • Founded in 1982 in Los Angeles, as the fir
Slide 6: Management Team
MANAGEMENT TEAM Bonnie Lee Romolo Santarosa Anthony Kim Matthew Fuhr Larsen Lee President & CEO SEVP, Chief Financial Officer SEVP, Chief Banking Officer EVP, Chief Credit Officer EVP, Head of Consumer Lending With 39 years of banking experience and With 34 years of banking experience and With 31 ye
Slide 7: The Hanmi Timeline
THE HANMI TIMELINE For over 40 years, we have been dedicated to helping our stakeholders bank on their dreams. 1982 1988 2001 2004 • First Korean American • Began offering SBA loans • Listed HAFC common • Acquired Pacific Union Bank in the U.S. stock Bank • Acquired First Global Bank ($1.2 billion i
Slide 8: Why Hanmi?
WHY HANMI? • Strong 10% CAGR in average loans since • Strong 9% CAGR in average deposits since 2013 2013 • Average noninterest-bearing deposits of Premier Diversified • Significant progress diversifying loan $1.90 billion represent 30% of average deposits Deposit Loan portfolio across CRE, equipment
Slide 9: Successful Portfolio Diversification Strategy
S U C C E S S F U L P O R T F O LI O D I V E R S I F I C A T I O N S T R A T E G Y Significant progress reducing CRE concentration from 85% of total portfolio to 63% Loan Composition Loan Composition (as of December 31, 2013) (as of March 31, 2025) $2.23 Billion $6.28 Billion (3) RRE (1) RRE (1) C&I
Slide 10: Average Loan Trend
AVERAGE LOAN TREND Strong average loan growth reflecting a 10% CAGR since 2013 $6,111 $6,190 $5,968 $5,597 $4,685 $4,795 $4,456 $4,508 $4,039 $3,423 $2,902 $2,441 ($ in millions) $2,157 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 1Q25 10
Slide 11: Average Deposit Trend
AVERAGE DEPOSIT TREND Strong deposit growth reflecting a 9% CAGR since 2013. Average noninterest-bearing deposits have grown by 9% CAGR since 2013 and now represents 30% of total deposits. $6,191 $6,308 $6,358 $5,950 $5,560 $4,946 $4,691 $4,461 $4,160 55% 65% 70% $3,503 $3,608 59% 70% $2,872 66% ($
Slide 12: Net Income Trend
NET INCOME TREND A track record of steady earnings growth at 7% CAGR between 2013-18 as the interest rate environment remained relatively steady. 2020-22 net income reflected the effect of the pandemic and the gradual receding from its uncertainties ending in 2022 with $101 million in net income. 20
Slide 13: Net Interest Income & NIM Trend
NET INTEREST INCOME & NIM TREND NIM 3.94% 3.88% 3.90% 3.95% 3.82% 3.57% 3.37% 3.50% 3.19% 3.08% 3.08% 3.02% 2.78% $238 $221 Net Interest Income ($ in millions) $203 $195 $177 $181 $176 $181 $160 $148 $123 $109 $55 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 1Q25 13
Slide 14: Noninterest Income Trend
NONINTEREST INCOME TREND NII/Average Assets 1.24% 1.17% 0.99% 0.76% 0.67% 0.73% 0.50% 0.62% 0.46% 0.49% 0.46% 0.42% 0.41% Noninterest Income ($ in millions) $48 $42 $43 18% $40 8% 12% $33 $33 $34 $34 $32 $28 $28 43% 17% 5% 18% 26% 28% $25 19% 29% 19% 20% 92% 82% 88% 82% 83% 74% 81% 57% 72% 76% $8 71
Slide 15: Noninterest Expense Trend
NONINTEREST EXPENSE TREND NIE/Average Assets 2.77% 2.89% 2.83% 2.47% 2.30% 2.19% 2.30% 2.02% 1.90% 1.87% 1.86% 1.85% 1.84% Non-Interest Expense ($ in millions) $141.3 $136.5 $130.3 $125.9 $124.5 $115.3 $117.6 $119.1 $114.1 $108.2 $98.6 $78.2 $35.0 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 20
Slide 16: Allowance for Credit Losses Trend
ALLOWANCE FOR CREDIT LOSSES TREND ACL/Total Loans 2.58% 1.89% 1.85% 1.35% 1.33% 1.41% 1.20% 1.12% 1.12% 1.12% 0.84% 0.72% 0.70% $90 $73 $72 $71 Allowance for Credit Losses ($ in millions) $69 $70 $61 $58 $53 $43 $32 $31 $32 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 1Q25 16
Slide 17: Nonperforming Assets Trend
NONPERFORMING ASSETS TREND NPAs/Total Assets 1.38% 1.15% 0.87% 0.97% 0.65% 0.40% 0.34% 0.46% 0.29% 0.20% 0.21% 0.19% 0.14% $2.4 $0.1 Nonperforming Assets ($ in millions) $83.0 $0.1 $15.8 $63.8 $0.8 $8.5 $1.9 $0.1 $35.6 $25.9 $7.5 $0.7 $0.7 $0.1 $25.3 $19.1 $0.1 $15.5 $11.4 $15.8 $15.5 $13.4 $14.3 $9
Slide 18: Net Charge Offs (Recoveries) Trend
NET CHARGE OFFS (RECOVERIES) TREND Net charge offs (recoveries) to average loans 0.66% 0.29% 0.18% 0.05% 0.07% 0.02% 0.02% 0.12% 0.07% 0.13% -0.06% -0.07% -0.13% $30.9 $26.4 Net charge offs (recoveries) ($ in millions) $7.0 $4.1 $6.3 $6.2 $2.2 $3.1 $1.9 $6.3 $0.7 $1.4 $7.2 $7.7 $6.2 $0.8 $4.5 $1.2 $
Slide 19: Risk Management
RISK MANAGEMENT CRE Concentration Liquidity Stress Test Capital Stress Test Hanmi has not exceeded the supervisory criteria to be Hanmi’s risk management practices include Hanmi is not required to perform a capital stress test; considered to have CRE concentration risk under comprehensive contingenc
Slide 20: Corporate Governance
CORPORATE GOVERNANCE Governance and management of environmental and social Our Board impact create long-term value for our stakeholders. The NCG Committee believes the Board should encompass a broad range of talent, skill, knowledge, experience, diversity, and expertise. Our board is currently compr
Slide 21: 1Q25 Highlights
1Q25 HIGHLIGHTS Earnings Performance • Net income of $17.7 million, unchanged from the prior quarter • Net interest margin up 11 basis points from the prior quarter, resulting in net interest income of $55.1 million, up 3.1% from the prior quarter • Noninterest income of $7.7 million, up 5.0% from t
Slide 22: Loan Production
LOAN PRODUCTION Weighted Average Coupon on New Production Loan production of $345.9 million in the first quarter included a meaningful contribution from 8.02% 8.31% 7.92% 7.37% 7.35% residential mortgage production, which increased 37% to $55.0 million quarter-over-quarter. ($ in millions) $347.8 $3
Slide 23: Loan Portfolio
LOAN PORTFOLIO Outstanding ($ in millions) 1Q25 Average Yield Commercial Real Estate $6.28 Billion Loan Portfolio (CRE)(1,2) Portfolio $3,975 5.65% (as of March 31, 2025) Residential Real Estate (RRE)(3) Portfolio $980 5.39% Equipment Commercial & Industrial C&I Finance (C&I)(1) Portfolio $854 7.76%
Slide 24: Deposit Portfolio
DEPOSIT PORTFOLIO Total deposits increased 3% to $6.62 billion, led $3,650 $2,969 Deposits by a $140.4 million, or 7%, increase in money as of 1Q25 55% 45% market and savings deposits quarter-over-quarter. ($ in millions) Noninterest-bearing demand deposits represented 31% of total deposits Business
Slide 25: Net Interest Income | Net Interest Margin
NET INTEREST INCOME | NET INTEREST MARGIN Net Interest Margin Net interest income for the fourth quarter was $55.1 million and net interest margin (taxable equivalent) 0.13% was 3.02%, both up from the fourth quarter primarily due to a decrease in deposit interest expense. 0.02% -0.02% 3.02% 2.91% -
Slide 26: Net Interest Income Sensitivity
NET INTEREST INCOME SENSITIVITY Loan & Deposit Beta(1) Fed Funds Rate & Cost of CDs Fed 5.50% 5.50% 5.00% 4.50% Funds 4.55% Rate(3) 6.02% 6.00% 6.04% 5.95% 5.90% 5.93% Loan 5.91% Cost of 5.64% 5.78% Yield 4.66% 4.78% 4.79% 4.50% 4.17% 5.60% CDs(2) 5.44% 5.00% 5.50% 5.50% 5.50% 5.50% 5.50% Fed 1Q24 2
Slide 27: Noninterest Income
NONINTEREST INCOME 1Q25 Service Charges and Fees（$ in million） Noninterest income for the first quarter was $7.7 million, up 5% from the fourth quarter, primarily Service charges on deposit accounts because of a $0.6 million increase on gains from 29% Trade finance and other service 40% $2.2 the sal
Slide 28: Noninterest Expense
NONINTEREST EXPENSE Noninterest expense was $35.0 million for the first quarter, up 1.3% from the fourth quarter of 2024, primarily reflecting a $1.6 million gain from the sale of a other real estate owned property in the fourth quarter. 1.94% 1.89% 1.85% 1.86% Noninterest expense / 1.82% Average as
Slide 29: Asset Quality – Delinquent & Criticized Loans
ASSET QUALITY – DELINQUENT & CRITICIZED LOANS Criticized Loans(2)（$ in millions） The $21.2 million decrease in special mention 2.56% 2.64% 2.62% loans in the first quarter was primarily driven by a Criticized $19.5 million upgrade of a C&I loan. loans / 1.39% Total loans 1.15% The $20.8 million incr
Slide 30: Asset Quality – Nonperforming Assets & Nonaccrual Loans
ASSET QUALITY – NONPERFORMING ASSETS & NONACCRUAL LOANS Nonperforming assets were $35.7 million at the end of the first quarter, up from $14.4 million at the end of the fourth quarter. Nonaccrual Loans（$ in millions） The increase was primarily driven by a $20.0 million commercial real estate loan de
Slide 31: Asset Quality – Gross & Net Loan Charge-offs
ASSET QUALITY – GROSS & NET LOAN CHARGE -OFFS Net charge-offs for the first quarter were $1.9 million. Net Charge-offs (Recoveries)（$ in millions） Gross Charge-offs（$ in millions） 0.12% 0.13% Net Charge-offs / 0.10% 0.06% -0.01% Average loans $3.8 $3.4 $3.2 $1.3 $0.5 $0.9 $1.9 $0.4 $1.6 $1.8 $2.3 $2
Slide 32: ACL Trends
ACL TRENDS Allowance for credit losses was $70.6 million at March 31, 2025, or 1.12% to total loans, compared Credit Loss Expense（$ in millions） with $70.1 million and 1.12% at the end of the prior quarter. $2.4 $2.3 Allowance for Credit Losses（$ in millions） 1.11% 1.10% 1.11% 1.12% 1.12% $1.0 $0.9
Slide 33: ACL Analysis by Loan Type
ACL ANALYSIS BY LOAN TYPE ($ in millions) March 31, 2025 December 31, 2024 September 30, 2024 June 30, 2024 March 31, 2024 Allowance Loans Allowance Loans Allowance Loans Allowance Loans Allowance Loans CRE $ 41.4 $ 3,975.7 $ 39.3 $ 3,949.6 $ 37.8 $ 3,932.1 $ 36.1 $ 3,888.5 $ 36.4 $ 3,878.5 C&I 6.2
Slide 34: Securities Portfolio
SECURITIES PORTFOLIO Available for Sale(1) Unrealized Loss The $991 million securities $991 Million $84 Million US Agy Municipal portfolio (all AFS, no HTM) represented 12% 4% Municipal UST US Agy CMO 13% of assets at March 31, 2025, and 8% 9% US Agy 8% US Agy CMO had a weighted average modified 20%
Slide 35: Liquidity
LIQUIDITY Cash & Securities at Company-only （$ in millions） The Bank and the Company have ample liquidity Balance resources at March 31, 2025. Cash $ 7 Securities (AFS) 43 $ 50 Liquidity Position（$ in millions） Liquidity Ratios Balance % of Assets Liquid Assets to Total Assets Liquid Assets to Depos
Slide 36: Capital Management
CAPITAL MANAGEMENT Dividend, Share Repurchase & TCE/TA(1)（$ in millions） Prudent capital management while driving shareholder return through stable quarterly dividends 9.59% 9.42% 9.41% and share repurchase program. Tangible book value 9.23% 9.19% TCE / TA(1) per share (TBVPS)(1) increased to $24.49
Slide 37: Regulatory Capital
REGULATORY CAPITAL The Company exceeds regulatory minimums and the Bank remains well capitalized at March 31, 2025. Company Bank CET1 CET1 4.50% 2.50% 7.00% 6.50% Capital Capital 12.13% 13.35% 11.23% 12.45% Tier 1 Tier 1 6.00% 2.50% 8.50% 8.00% Capital Capital 12.47% 13.35% 11.57% 12.45% Total Total
Slide 38: Loan Portfolio Diversification
LOAN PORTFOLIO DIVERSIFICATION • CRE(1) represents 63% of the total portfolio • C&I(2) represents 14% of the total portfolio. Mixed Use 3% Gas Station 5% Construction 2% Other 6% CRE Portfolio(1) Multifamily 10% C&I Portfolio(2) Other Manufacturing 33% 29% $3,975M Industrial 11% Retail 28% $854M Fin
Slide 39: CRE Portfolio Geographical Exposure
CRE PORTFOLIO GEOGRAPHICAL Multifamily by State $428 Construction by State $78 EXPOSURE Other Illinois $15 3% $12 3% New York Other $23 $74 17% 28% California California $38 50% Texas $226 53% New York CRE Composition by State $101 24% $17 22% $3,975 ($ in millions) Illinois Other $103 3% $668 17% O
Slide 40: Loan Portfolio Distribution
LOAN PORTFOLIO DISTRIBUTION Residential Real CRE C&I Estate & Equipment Finance Owner Non-owner Lines of Residential Equipment ($ in millions) Multifamily Construction(1) Term(2) Occupied Occupied Credit(2) Real Estate Finance Total Balance $768 $2,702 $428 $79 $411 $443 $980 $473 Average $1.08 $3.1
Slide 41: Loan Portfolio Maturities
LOAN PORTFOLIO MATURITIES ($ in millions) <1 Year 1-3 Years >3 Years Total Real Estate Loans Retail $ 164.9 $ 311.4 $ 632.4 $ 1,108.7 Hospitality 161.3 294.7 389.3 845.3 Office 236.7 268.4 58.8 563.9 Other 305.1 509.9 564.1 1,379.1 Commercial Property $ 868.0 $ 1,384.4 $ 1,644.6 $ 3,897.0 Constructi
Slide 42: USKC Loans & Deposits
USKC (1) LOANS & DEPOSITS USKC Loans – Top 10 Industries (as of 1Q25) Auto Part Manufacturer USKC portfolio represented $931.9 million, or 15% 28% RE Investment 27% of the loan portfolio, and $968.5 million, or 15% of Hotel 20% the deposit portfolio. Food 5% Polyester Manufact 3% USKC CRE portfolio
Slide 43: Office Loan Portfolio
OFFICE LOAN PORTFOLIO Portfolio by State The CRE office portfolio(1) was $564.0 million(2) at 4% March 31, 2025, representing 9% of the total loan 1% portfolio. 12% 80% Remaining = 3% $4.5M 2.02x 55.27% Average balance of the portfolio Weighted average debt Weighted average coverage ratio(3) of the
Slide 44: Hospitality Segment
HOSPITALITY SEGMENT Hospitality segment represented $845.3 million(1), Hospitality by Type or 13% of the total loan portfolio and 21% of the Convention Center Airport total CRE portfolio at March 31, 2025. 5% 2% Resort 7% (2) $4.4M 2.1x 51.44% Destination / Metropolitan (3) Average balance of (3) th
Slide 45: Retail Segment
RETAIL SEGMENT Retail segment represents $1.11 billion (1), or 18% Percentage of Portfolio of the total loan portfolio and 28% of the total CRE portfolio at March 31, 2025. Illinois 2% Georgia Other 12% 3% (2) Texas 12% $1.5M 2.01x 46.11% California 71% Average balance of the (3) Weighted average de
Slide 46: Residential Real Estate Portfolio
RESIDENTIAL REAL ESTATE PORTFOLIO The RRE(1) portfolio was $979.5 million at March Percentage of Portfolio 31, 2025, representing 16% of the total loan portfolio. Jumbo QM Non-QM 2% (2) Our conservative underwriting policy focuses on high-quality mortgage originations with maximum Loan-to-Value (LTV
Slide 47: Equipment Finance Portfolio
EQUIPMENT FINANCE PORTFOLIO Portfolio by Equipment 32% 28% Equipment finance portfolio represented $472.6 million, or 8% of the loan portfolio, at March 31, 2025 7% 7% 7% 4% 4% 4% 4% 3% Portfolio by Industry Other Services 3% (1) Portfolio by State Other 14% Transportation Agriculture 3% 22% Wholesa
Slide 48: 1Q25 Financial Summary
1Q25 FINANCIAL SUMMARY Change (1) ($ in millions, except EPS) March 31, 2025 December 31, 2024 March 31, 2024 Q/Q Y/Y Income Statement Summary Net interest income before credit loss $ 55.1 $ 53.4 $ 50.7 3.1% 8.8% Noninterest income 7.7 7.4 7.7 5.0% -0.1% Operating revenue 62.8 60.8 58.4 3.3% 7.6% No
Slide 49: Non-GAAP Reconciliation: Tangible Common Equity to Tangible Asset Ratio
NON-GAAP RECONCILIATION: T A N G I BLE CO M M O N E Q U I T Y T O T A N G I BLE A S S E T R A T I O ($ in thousands, except per share data) March 31, December 31, September 30, June 30, March 31, Hanmi Financial Corporation 2025 2024 2024 2024 2024 Assets $ 7,729,035 $ 7,677,925 $ 7,712,299 $ 7,586,
Slide 50: Non-GAAP Reconciliation: Pro Forma Regulatory Capital
NON-GAAP RECONCILIATION: P R O FO R MA R E G U L A T O R Y C A P I T A L ($ in thousands) Company(1) Bank(1) Common Total Common Total Equity Tier 1 Tier 1 Risk-based Equity Tier 1 Tier 1 Risk-based Regulatory capital $788,625 $810,836 $994,327 $868,057 $868,057 $941,548 Unrealized losses on AFS sec
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