Hanmi Financial Corporation · NASDAQ:HAFC
Hanmi Financial — Q3 2022 Earnings Presentation
27 slides from Hanmi Financial's earnings presentation, Oct 25, 2022
Slide 1: 3Q22 Earnings Supplemental Presentation
Los Angeles New York/ New Jersey Virginia Chicago Dallas Houston San Francisco San Diego 3Q22 Earnings Supplemental Presentation October 25, 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: 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, allowance
Slide 4: 3Q22 Highlights
3Q22 Highlights Net Income Diluted EPS ROAA ROAE NIM Efficiency Ratio TBVPS(1) $27.2M $0.89 1.52% 15.58% 3.66% 46.22% $19.60 • Net income was $27.2 million, or $0.89 per diluted share, up 8.5% from $25.1 million, or $0.82 per diluted share, for the prior quarter and up 2.3% from $26.6 million, or $0
Slide 5: Loan Production
Loan Production Loan production returned to more historical levels at $492.3 million in 3Q22. 5.55% 90000% Average interest 0.0021 rate on new 4.35% production 80000% 3.90% 3.91% 3.95% 70000% • Average interest rate on new production up $625.1 $642.2 120 basis points sequentially. 60000% ($ in milli
Slide 6: Loan Portfolio
Loan Portfolio $5.80 Billion Loan Portfolio (as of 09/30/22) Commercial Real Estate(1) Portfolio Equipment CRE Investor (Non-owner) Occupied Outstanding ($ in millions) $3,854 Finance # of Loans 959 Median Balance ($ in millions) $0.71 - 10% Median Balance ($ in millions) $1.12 3Q22 Average Yield 4.
Slide 7: Loan Portfolio Diversification
Loan Portfolio Diversification Loan portfolio is well diversified across collateral types and industry types; CRE represents 66% of the total portfolio and C&I represents 13%. (1) (2) CRE Portfolio C&I Portfolio $3.85B $732M Construction – 3% Other – 12% Mixed Use – Manufacturing – Retail – 5% Other
Slide 8: CRE Portfolio Geographical Exposure
CRE Portfolio Geographical Exposure ($ in millions) Multifamily by State Construction by State $409M $102M CRE Composition by State Illinois – Other – $3,854M New York – $2 1% $17 4% Other – $67 $12 16% 11% New York – $18 Illinois – 18% $76 Texas - 2% Other – $95 California – 23% California – $508 $
Slide 9: Hospitality Segment by Location Type
Hospitality Segment by Location Type Hospitality segment(1) declined by 27% since 1Q20 to $682.1 million at 3Q22, representing 12% of the loan portfolio. Convention Casino – Center – 1% 3% Airport – • Average balance within the segment was $3 million and the 8% median balance was $0.9 million Resort
Slide 10: Residential Real Estate Portfolio
Residential Real Estate Portfolio The RRE(1) portfolio was $649.6 million for the third quarter, representing 11% 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 s
Slide 11: Equipment Finance Portfolio
Equipment Finance Portfolio A $565.4 million equipment finance portfolio, with an average size of $46 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
Slide 12: Deposit Base
Deposit Base Deposits increased to $6.20 billion, up 4% from the prior quarter and up 8% from the same quarter last year. • Noninterest-bearing demand deposits relatively unchanged from the prior quarter and increased 9% from the same quarter last year. Noninterest-bearing demand deposits represente
Slide 13: Net Interest Income | Net Interest Margin
Net Interest Income | Net Interest Margin Net interest income was $63.1 million for the third quarter compared with $59.0 million for the prior quarter; net interest margin for the quarter was 3.66% compared with 3.55% for the prior quarter. 3.66% 0.07% 3.55% 3.10% 0.28% 3.07% 2.96% -0.23% -0.01% 3.
Slide 14: Net Interest Income Sensitivity
Net Interest Income Sensitivity 25% of the loan portfolio reprices within 1-3 months. (1) Loans – Months to Reset / Maturity . Fed Funds Rate & Cost of CDs ($ in millions) $2,140.0 Fed 3.25% Funds Cost of 1.75% Rate(3) CDs(2) 0.46% 0.39% $541.3 0.35% 0.50% 0.39% 0.97% 0.25% 0.25% $1,554.2 3Q21 4Q21
Slide 15: Noninterest Income
Noninterest Income Noninterest income was $8.9 million for the third quarter compared with $9.3 million for the prior quarter largely due to lower SBA gain on sale income stemming from lower trade premiums. Noninterest Income ($ in in millions) millions) 3Q22 Service Service Charges Charges andofFee
Slide 16: Noninterest Expense
Noninterest Expense Continued focus on disciplined expense management. 1.95% $50 2.00% 1.86% 1.88% 1.85% 1.83% Noninterest expense / Average assets • Noninterest expense was $33.3 million in $33.3 the third quarter, up 5.7% from the prior $32.5 $31.6 $31.7 $31.5 quarter $4.5 $4.6 $3.6 $4.8 $3.8 $1.3
Slide 17: ACL Trends
ACL Trends Allowance for credit losses was $71.6 million as of September 30, 2022 generating an allowance for credit losses to loans of 1.23% compared with 1.29% at the end of the prior quarter. Allowance for Credit Losses Credit Loss Expense (Recovery) $100 1.80% 1.58% 1.60% $7 0.08% -0.07% -0.01%
Slide 18: ACL Analysis by Loan Type
ACL Analysis by Loan Type ($ in millions) September 30, 2022 June 30, 2022 March 31, 2022 December 31, 2021 September 30, 2021 Allowance Loans Allowance Loans Allowance Loans Allowance Loans Allowance Loans CRE $ 42.7 $ 3,853.9 $ 45.6 $ 3,829.7 $45.9 $3,771.5 $48.4 $3,701.9 $55.3 $3,528.5 C&I 14.9 7
Slide 19: Asset Quality
Asset Quality Nonperforming assets to total assets remained unchanged quarter-over-quarter. Special mention loans were $123.0(1) million at the end of the third quarter, up from $80.5 million at June 30, 2022. Nonperforming Assets Criticized Loans 3.14% 2.94% $70 2.39% Criticized 2.27% 1.92% loans /
Slide 20: Asset Quality – Nonaccrual Loans
Asset Quality – Nonaccrual Loans Nonaccrual loans were $11.6 million and essentially unchanged from the end of the prior quarter. ($ in millions) $21.2 $7.0 (1) $13.4 (1) (1) $11.5 (1) $11.6 $4.8 $11.0 $5.1 $4.2 $3.9 $5.2 $2.5 $1.2 $1.2 $1.3 $0.9 $6.9 $7.1 $6.1 $5.8 $5.5 3Q21 4Q21 1Q22 2Q22 3Q22 (2)
Slide 21: Capital Management
Capital Management Tangible book value per share (TBVPS)(1) decreased to $19.60 from $19.91 at the end of the prior quarter. 3Q22 TBVPS(1) and TCE/TA(1) ratio were impacted by $29.5 million unrealized after-tax loss recorded in AOCI due to changes in the value of the securities portfolio resulting f
Slide 22: Regulatory Capital
Regulatory Capital The Company exceeds regulatory minimum and the Bank remains well capitalized. Company Bank CET1 Capital 4.50% 2.50% 7.00% CET1 6.50% Capital 11.19% 12.70% Tier 1 Capital 6.00% 2.50% 8.50% Tier 1 8.00% Capital 11.53% 12.70% Total Capital 8.00% 2.50% 10.50% Total 10.00% Capital 14.3
Slide 23: Appendix
Appendix A Hanmi Financial Corporation: 23
Slide 24: 3Q22 Financial Summary
3Q22 Financial Summary (1) ($ in millions, except EPS) Change September 30, 2022 June 30, 2022 September 30, 2021 Q/Q Y/Y Income Statement Summary Net interest income $ 63.1 $ 59.0 $ 50.0 6.8% 26.2% Noninterest income 8.9 9.3 12.5 -4.3% -28.7% Operating revenue 72.0 68.3 62.5 5.4% 15.2% Noninterest
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) September 30, June 30, March 31, December 31, September 30, Hanmi Financial Corporation 2022 2022 2022 2021 2021 Assets $ 7,128,511 $ 6,955,968 $ 6,737,052 $ 6,858,587 $ 6,776,533 Less goo
Slide 26: Non-GAAP Reconciliation – PPP (4Q21)
Non-GAAP Reconciliation – PPP (4Q21) ($ in thousands) 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 loans (2,976) Less PPP loan interes
Slide 27: Non-GAAP Reconciliation – PPP (3Q21)
Non-GAAP Reconciliation – PPP (3Q21) ($ in thousands) 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 loans (21,895) Less PPP loan inte