Slide 1: Hanmi Financial Corporation May 2006
HANMI FINANCIAL CORPORATION Nasdaq: HAFC May 2006
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: Opportunities
Opportunities Opportunities Opportunities
Slide 4: Korean-American Market
Korean-American Market Korean-American market five-year history Loans: 29% CAGR Deposits: 24% CAGR 40% of 2.2 million Korean-American population reside in California. Highest rates of business ownership with one per every eight Korean-Americans High savings rate (Sources: US Korean Embassy and 2001
Slide 5: Target Market Growth Drivers
Target Market Growth Drivers Increased wealth in the Korean-American community Korea is the 11th largest economy with $28 billion current account surplus in 2004 Continuing immigration trend from Korea Wealthier and better educated recent immigrants
Slide 6: Hanmi's Core Competencies
Hanmi's Core Competencies Ethnic markets Real estate lending Business lending
Slide 7: Loan & Deposits Market Shares
Loan & Deposits Market Shares Nearly 40% market share among Korean- American banks in California HAFC 2818 NARA 1155 CLFC 1491 WIBC 1481 Others 1130 Deposits Net Loans Note: As of March 31, 2006 based on SEC filings of each company. Excludes 30% of NARA's balances, which are not from California base
Slide 8: Experienced Management Team
Experienced Management Team Name Name Title Banking Experience Sung Won Sohn, Ph. D. Sung Won Sohn, Ph. D. President and CEO 32 years Kurt M. Wegleitner Kurt M. Wegleitner EVP and CCO 26 years Michael J. Winiarski Michael J. Winiarski SVP and CFO 26 years
Slide 9: Future Growth - Organic and External
Future Growth - Organic and External Experienced management team Extensive network Emphasis on sales & service Incentive compensation program Contiguous market penetration Upgrade existing products Introduce new products
Slide 10: By executing on our strategy...
By executing on our strategy... Customers will... refer business Employees will... say Hanmi is a great place to work Investors will... consider HAFC a superior investment
Slide 11: Financial Performance: Consistent Balance Sheet Growth
($ in millions) 2000 2001 2002 2003 2004 2005 2006 1Q Loans 620 820 1000 1270 2235 2469 2642 Deposits 940 1040 1290 1450 2529 2826 2819 Assets 1030 1160 1460 1790 3104 3414 3515 Financial Performance Consistent Balance Sheet Growth
Slide 12: Financial Performance: Consistent Balance Sheet Growth
Financial Performance Consistent Balance Sheet Growth 2000 2001 2002 2003 2004 2005 2006 1Q Loans 620 820 1000 1270 2235 2469 2642 2000 2001 2002 2003 2004 2005 2006 1Q Deposits 940 1040 1290 1450 2529 2826 2819 ($ in millions) ($ in millions) Loans Deposits 621 2,642 940 2,819
Slide 13: Loan Portfolio
Loan Portfolio As of March 31, 2006 Construction Loans 169.4 Consumer Loans 179.2 Commercial Real Estate Loans 766.2 CRE-Owner/User 763.8 C & I Loans 794.7
Slide 14: Specialty Lending Activities
Specialty Lending Activities Robust SBA loan production 9th largest SBA lender in California in 2005 Specialized in low income housing lending $59 million low income housing loans booked in 2005 Trade finance The average loan balance in the first quarter of 2006 was $116 million. Syndication of loan
Slide 15: Korean vs. Non-Korean Business
Korean vs. Non-Korean Business 2000 2001 2002 2003 2004 2005 2006 1Q* Korean New Loans 221.1 245.7 287.4 344.5 452.4 800.8 782.9 Non-Korean New Loans 75.4 136.3 165.5 278.4 339.3 548.3 961.7 ($ in millions) Hanmi has extended service to neighboring ethnic communities. 45% 25% 43% 36% 37% 41% 55% *An
Slide 16: Sound Asset Quality
Sound Asset Quality Loan Loss Allowance/Gross Loans 2000 2001 2002 2003 2004 2005 2006 1Q Hanmi 0.0178 0.0119 0.0114 0.0106 0.01 0.01 0.01 Non Performing Loans/Gross Loans 2000 2001 2002 2003 2004 2005 2006 1Q Hanmi 0.004 0.0063 0.0065 0.0068 0.0027 0.0041 0.0038 1.00% 0.38%
Slide 17: Deposits Composition
Deposits Composition Non-Interest Bearing 748.5 TDs of $100,000 or More 1189 TDs of Less than $100,000 271.6 Interest Bearing Demand and Savings 609.6 As of March 31, 2006
Slide 18: Non-interest Income Growth
Non-interest Income Growth 2000 2001 2002 2003 2004 2005 2006 1Q* Service charges on deposits 8.9 9.2 9.2 10.3 14.4 15.8 16.8 Trade finance fees 1.9 1.9 2.4 2.9 4 4.3 4 Remittance fees 0.5 0.6 0.8 1 1.7 2.1 1.96 Other service charges 0.8 0.8 1.1 1.5 1.7 2.5 2.12 Other income 0.4 0.4 1.2 1.3 2.4 3.3
Slide 19: Non-interest Income Growth
Non-interest Income Growth ($ in millions) 2000 2001 2002 2003 2004 2005 2006 1Q* Service charges on deposits 8.9 9.2 9.2 10.3 14.4 15.8 16.8 Trade finance fees 1.9 1.9 2.4 2.9 4 4.3 4 Remittance fees 0.5 0.6 0.8 1 1.7 2.1 1.96 Other service charges 0.8 0.8 1.1 1.5 1.7 2.5 2.12 Other income 0.4 0.4
Slide 20: Net Income and Diluted EPS
Net Income and Diluted EPS Diluted EPS1 '00 '01 '02 '03 '04 '05 '06 1Q* Net Income 15.5 16.8 17 19.2 36.7 58.2 59.2 Net Income ($ in millions) '00 '01 '02 '03 '04 '05 '06 1Q* Diluted EPS 0.57 0.6 0.6 0.67 0.84 1.17 1.2 1Reflects recent 2:1 stock split *Annualized the first quarter number.
Slide 21: Return on Average Equity / Assets
Return on Average Equity / Assets ROA ROE 2000 2001 2002 2003 2004 2005 2006 1Q ROE 0.1981 0.1756 0.1508 0.1451 0.1251 0.1394 0.1383 ROA 0.0178 0.0153 0.013 0.0118 0.0137 0.0179 0.0175 ROTE 0.2045 0.1798 0.1535 0.1475 0.2573 0.2933 0.277
Slide 22: Profitability Ratio Trends
Profitability Ratio Trends 4Q 03 1Q 04 2Q 04 3Q 04 4Q 04 1Q 05 2Q 05 3Q 05 4Q 05 1Q 06 Yield 5.09% 5.25% 5.30% 5.66% 6.06% 6.40% 6.84% 7.08% 7.36% 7.75% Cost of Fund 1.77% 1.80% 1.80% 1.87% 2.18% 2.34% 2.72% 3.22% 3.66% 3.97% Spread 3.32% 3.45% 3.50% 3.79% 3.88% 4.06% 4.12% 3.86% 3.70% 3.78% NIM 3.8
Slide 23: Efficiency Ratio Trend
Efficiency Ratio Trend *Orange color reflects restructuring expenses related to the PUB merger 2002 4Q 2003 1Q 2003 2Q 2003 3Q 2003 4Q 2004 1Q 2004 2Q 2004 3Q 2004 4Q 2005 1Q 2005 2Q 2005 3Q 2005 4Q 2006 1Q Efficiency Ratio 0.5565 0.5374 0.528 0.5123 0.5131 0.4777 0.5181 0.5029 0.4951 0.4438 0.403 0
Slide 24: 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 25: Compelling Investment Opportunity
Compelling Investment Opportunity Dominant franchise in the attractive, high growth California-based Korean-American marketplace Proven expertise serving growing immigrant markets Experienced management team High quality loan portfolio coupled with attractive core deposit franchise