Hanmi Financial Corporation · NASDAQ:HAFC
Hanmi Financial — Q4 2022 Earnings Presentation
25 slides from Hanmi Financial's earnings presentation, Jan 24, 2023
Slide 1: 4Q22 Earnings Supplemental Presentation
Los Angeles New York/ New Jersey Virginia Chicago Dallas Houston San Francisco San Diego 4Q22 Earnings Supplemental Presentation January 24, 2023
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: 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 4: 4Q22 Highlights
4Q22 Highlights Net Income Diluted EPS ROAA ROAE NIM Efficiency Ratio TBVPS(1) $28.5M $0.93 1.56% 15.90% 3.67% 46.99% $20.54 • Net income was $28.5 million, or $0.93 per diluted share, up 4.8% from $27.2 million, or $0.89 per diluted share, for the prior quarter and down 14.6% from $33.3 million, or
Slide 5: Loan Production
Loan Production Loan production, reflecting higher interest rates, of $473.8 million for 4Q22. 6.85% 90000% Average interest 0.0021 5.55% rate on new 4.35% production 80000% 3.91% 3.95% 70000% ($ in millions) • Average interest rate on new production up $625.1 $642.2 130 basis points sequentially. 6
Slide 6: Loan Portfolio
Loan Portfolio $5.97 Billion Loan Portfolio (as of 12/31/22) Commercial Real Estate(1) Portfolio Equipment CRE Investor (Non-owner) Occupied Outstanding ($ in millions) $3,833 Finance # of Loans 943 Median Balance ($ in millions) $0.71 - 10% Median Balance ($ in millions) $1.09 4Q22 Average Yield 5.
Slide 7: Loan Portfolio Diversification
Loan Portfolio Diversification Loan portfolio is well diversified across collateral types and industry types; CRE represents 64% of the total portfolio and C&I represents 14%. (1) (2) CRE Portfolio C&I Portfolio $3.83B $804M Mixed Use – Other – 5% 12% Real Estate Other – Rental & Manufacturing – 23%
Slide 8: CRE Portfolio Geographical Exposure
CRE Portfolio Geographical Exposure ($ in millions) Multifamily by State Construction by State $400 $109 CRE Composition by State Illinois – Other – $14 $3,833 3% $16 4% New York – Other – $68 $14 17% 13% New York – $18 17% Illinois – $87 Other – Texas - California – 2% $95 $207 California – $521 24
Slide 9: Hospitality Segment by Location Type
Hospitality Segment by Location Type Hospitality segment(1) declined by 29% since 1Q20 to $667.4 million at 4Q22, representing 11% of the loan portfolio. Convention Casino – Center – 1% 4% Airport – • Weighted average debt coverage ratio of the segment was 2.4x at 7% origination Resort – 6% • Weight
Slide 10: Residential Real Estate Portfolio
Residential Real Estate Portfolio The RRE(1) portfolio was $734.5 million at December 31, 2022, representing 12% of the total loan portfolio. Our conservative underwriting policy focuses on high-quality mortgage originations with maximum LTV between 60% and 70%, maximum DTI of 43% and minimum FICO s
Slide 11: Equipment Finance Portfolio
Equipment Finance Portfolio A $594.8 million equipment finance portfolio, with a median size of $35 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 t
Slide 12: Deposit Base
Deposit Base Deposits decreased to $6.17 billion, down 1% from the prior quarter and up 7% from the same quarter last year. • Noninterest-bearing demand deposits represented 41% of total deposits at December 31, 2022 Deposits ($ in millions) Deposits (as of 4Q22) ($ in millions) Demand Noninterest-b
Slide 13: Net Interest Income | Net Interest Margin
Net Interest Income | Net Interest Margin Net interest income was $64.6 million for the fourth quarter compared with $63.1 million for the prior quarter; net interest margin for the quarter was 3.67% compared with 3.66% for the prior quarter. 0.48% 0.04% 3.55% 3.66% 3.67% 3.10% 2.96% -0.46% -0.05% $
Slide 14: Net Interest Income Sensitivity
Net Interest Income Sensitivity 25% of the loan portfolio reprices within 1-3 months. (1) Loans – Months to Reset / Maturity . ($ in millions) Fed Funds Rate & Cost of CDs $2,278.9 4.50% Fed 3.25% Funds Cost of 1.75% Rate(3) CDs(2) 0.25% 0.50% $544.4 2.17% 0.39% 0.35% 0.39% 0.97% 4Q21 1Q22 2Q22 3Q22
Slide 15: Noninterest Income
Noninterest Income Noninterest income was $7.5 million for the fourth quarter compared with $8.9 million for the prior quarter largely due to lower SBA gain on sale income due to lower trade premiums and lower service charge and other fee income and a valuation adjustment to bank-owned life insuranc
Slide 16: Noninterest Expense
Noninterest Expense Continued focus on disciplined expense management. $50 2.00% 1.85% 1.86% 1.88% 1.83% 1.85% Noninterest expense / Average assets • Noninterest expense was $33.8 million in $33.3 $33.8 the fourth quarter, up 1.7% from the prior $31.6 $31.7 $31.5 quarter $4.6 $4.6 $3.6 $4.8 $3.8 $1.
Slide 17: Asset Quality – Delinquent & Criticized Loans
Asset Quality – Delinquent & Criticized Loans Loans 30 to 89 days past due and still accruing were 0.13% of loans at the end of the fourth quarter of 2022, compared with 0.09% at the end of the prior quarter. Special mention loans were $79.0 million at the end of the fourth quarter, down from $123.0
Slide 18: Asset Quality – Nonperforming Assets & Nonaccrual Loans
Asset Quality – Nonperforming Assets & Nonaccrual Loans Nonperforming assets declined 20% to $10.0 million quarter-over-quarter. Nonaccrual loans declined 15% to $9.8 million from the end of the prior quarter. Nonperforming Assets ($ in millions) Nonaccrual Loans ($ in millions) $20 Nonperforming 0.
Slide 19: ACL Trends
ACL Trends Allowance for credit losses was $71.5 million as of December 31, 2022, generating an allowance for credit losses to loans of 1.20% compared with 1.23% at the end of the prior quarter. Allowance for Credit Losses ($ in millions) Credit Loss Expense (Recovery) ($ in millions) $100 1.50% 1.4
Slide 20: ACL Analysis by Loan Type
ACL Analysis by Loan Type ($ in millions) December 31, 2022 September 30, 2022 June 30, 2022 March 31, 2022 December 31, 2021 Allowance Loans Allowance Loans Allowance Loans Allowance Loans Allowance Loans CRE $ 40.6 $ 3,833.4 $ 42.7 $ 3,853.9 $ 45.6 $ 3,829.7 $45.9 $3,771.5 $48.4 $3,701.9 C&I 15.3
Slide 21: Capital Management
Capital Management Tangible book value per share (TBVPS)(1) increased to $20.54 from $19.60 at the end of the prior quarter. 4Q22 TBVPS(1) and TCE/TA(1) ratio were impacted by -$88.7 million of AOCI reflecting changes in the value of the securities portfolio resulting from interest rate changes duri
Slide 22: Regulatory Capital
Regulatory Capital The Company exceeds regulatory minimum and the Bank remains well capitalized. Company Bank CET1 7.00% 4.50% 2.50% CET1 Capital 6.50% Capital 11.37% 12.85% Tier 1 6.00% 2.50% 8.50% Tier 1 Capital 8.00% Capital 11.71% 12.85% Total 8.00% 2.50% 10.50% Total Capital 10.00% Capital 14.4
Slide 23: Appendix
Appendix A Hanmi Financial Corporation: 23
Slide 24: 4Q22 Financial Summary
4Q22 Financial Summary ($ in millions, except EPS) Change (1) December 31, 2022 September 30, 2022 December 31, 2021 Q/Q Y/Y Income Statement Summary Net interest income $ 64.6 $ 63.1 $ 49.5 2.3% 30.4% Noninterest income 7.5 8.9 9.3 -16.3% -19.8% Operating revenue 72.0 72.0 58.8 0.0% 22.5% Nonintere
Slide 25: Non-GAAP Reconciliation: Tangible Common Equity to Tangible Asset Ratio
Non-GAAP Reconciliation: Tangible Common Equity to Tangible Asset Ratio ($ in thousands, except per share data) December 31, September 30, June 30, March 31, December 31, Hanmi Financial Corporation 2022 2022 2022 2022 2021 Assets $ 7,378,262 $ 7,128,511 $ 6,955,968 $ 6,737,052 $ 6,858,587 Less good