Hanmi Financial Corporation · NASDAQ:HAFC
Hanmi Financial — Keefe, Bruyette & Woods 13th Annual Investor Conference 2012
22 slides from Hanmi Financial's conference presentation, Jul 31, 2012
Slide 1: 13th Annual Investor Conference
13th Annual Investor Conference August 1, 2012 Hanmi Bank Keefe, Bruyette & Woods Specialists in Financial Services
Slide 2: Forward-looking statements
Please read the following information before reviewing the information contained herein: This presentation contains forward‐looking statements, which are included in accordance with the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. In some cases, you can identify
Slide 3: Vision
Vision At Hanmi Bank, we want to be regarded as the "quality market leader in the banking industry, thereby becoming the first choice of employees, customers and shareholders." Established in 1982, Hanmi Bank was founded to serve the Korean‐American Community. Since then, we have grown into one of t
Slide 4: Investment Highlights
HAFC Investment Highlights • Oldest and second largest Korean‐ American bank in the U.S. • Attractive target market demographics • Premier deposit franchise and commercial banking platform • Aggressive problem asset resolution and significantly improved credit profile • Seven consecutive quarters of
Slide 5: Premier Korean-American Bank in the U.S.
HAFC Premier Korean‐American Bank in the U.S. • Hanmi Bank is the oldest Korean‐ American franchise in the U.S., celebrating its 30th anniversary in 2012 • #2 market share among Korean‐ American banks in California, which is the largest Korean‐American market in the U.S. • Specializes in commercial,
Slide 6: Korean-American Banking Opportunity
HAFC Korean‐American Banking Opportunity • Large Korean‐American population in the U.S. with concentration in key markets o Los Angeles is home to the largest Korean‐American population in the U.S. o Other key markets include New York, New Jersey, Chicago, Texas, Seattle and Atlanta • Continuing inf
Slide 7: 2012 Developments
HAFC 2012 Developments • Hanmi’s 2Q12 earnings were its seventh consecutive profitable quarter. • DTA valuation allowance reversal contributed $53.1 million in 2Q12, offset by a current tax provision of $5.9 million. The reversal resulted in an increase in tangible book value to $11.02 per share at
Slide 8: Seven Consecutive Quarters of Profitability
HAFC • Our confidence in the sustainability of our future profitability is reflected in the DTA valuation allowance reversal. • Pre‐tax earnings were $8.6 million, up 16% from $7.4 million in 1Q12 • DTA valuation allowance reversal contributed $53.1 million, or approximately $1.69 per diluted share,
Slide 9: Improving Operating Efficiency
HAFC Improving Operating Efficiency Source: Derived from Company’s 10‐K, 10‐Q’s and earnings releases. (1) Calculated as noninterest expense / (net interest income + noninterest income). See news release of 7/19/2012 for reconciliation of non‐GAAP financial measures. 9 • Operating efficiencies impro
Slide 10: Improving Deposit Mix
HAFC Improving Deposit Mix $0 $500 $1,000 $1,500 $2,000 $2,500 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 Growing Core Deposits Jumbo CDs Retail Time Deposits Savings, Money Market & Now Demand Noninterest‐ Bearing 56.7% 71.3% 28.5% 10
Slide 11: Diversified Loan Portfolio
HAFC Diversified Loan Portfolio Source: Derived from Company’s 10‐K and 10‐Q filings. Commercial RE 37% Construction <1% Residential RE 5% Commercial Term Loans 44% Commercial LOC 3% SBA 7% International 2% Consumer 2% Gross Loans $1.95 Billion at June 30, 2012 11
Slide 12: Diversified Loan Portfolio (CRE loans)
HAFC Diversified Loan Portfolio Source: Derived from Company’s 10‐K and 10‐Q filings. CRE loans include real estate loans and commercial and industrial loans backed by owner occupied real estate. Retail 26% Hotel/Motel 17% Gas Station 16% Mixed Use 9% Apartment 6% Church 4% Industrial 3% Warehouse 3
Slide 13: Dramatic Credit Improvement
HAFC Dramatic Credit Improvement • Hanmi has aggressively managed its problem assets in the past two years • Executed note sales rather than time consuming and labor intensive foreclosures • This aggressive asset resolution strategy has resulted in a 68% and 63% decline in NPAs and classified loans,
Slide 14: Conservatively Marked Portfolio
HAFC Conservatively Marked Portfolio • As of 2Q12, NPLs have been charged down to 72% of original principal balances • Net of specific reserves, NPLs are being carried at approximately 65% of original principal balances • Hanmi has sold approximately $298 million of NPLs at 54% of original principal
Slide 15: Strong Reserves
HAFC Strong Reserves Reserves / NPLs of 159% is significantly higher than national averages Reserves / Gross Loans of 3.69% is also much higher than average of 2.88% of reserves held by US Banks and the 2.11% of banks with assets of $1 to $5 billion Source: Company data derived from 10‐K and 10‐Q fi
Slide 16: Improving Asset Quality
HAFC Improving Asset Quality $0 $5 $10 $15 $20 $25 $30 $35 $40 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 Net Charge‐Offs $ in millions $0 $25 $50 $75 $100 $125 $150 $175 $200 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 Non‐Performing Assets OREO Nonaccrual 16
Slide 17: Improving Classified Assets
HAFC Improving Classified Assets $0 $50 $100 $150 $200 $250 $300 $350 $400 $450 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 All Classified Assets Consumer C&I Other C&I Secured by RE CRE $ in millions 17
Slide 18: Capitalization
HAFC Capitalization • In November of 2011, raised new capital of $77.1 million in net proceeds, further solidifying its balance sheet • Issued 12.6 million shares (adjusted for a 1‐for‐8 reverse split) • The Bank’s tangible common equity to tangible assets ratio at June 30, 2012, was 14.34% • At the
Slide 19: Strategic Objectives
Strategic Objectives Focus on Resolving Regulatory Orders Recent lifting of final order and replacing with MOU by the DFI. Expand Profitability Redeploy excess liquidity Continue to expand NIM Improve efficiency ratio Pursue Growth Opportunities Leverage long‐term reputation with community to attrac
Slide 20: Investment Highlights
HAFC Investment Highlights • Oldest and second largest Korean American bank in the U.S. • Well positioned branch network in Southern California’s Korean American neighborhoods. • Premier deposit franchise and commercial banking platform • Aggressive problem asset resolution resulting in significantl
Slide 21: Non-GAAP Reconciliation: Pre-Tax Pre-Provision Income
HAFC Non‐GAAP Reconciliation Hanmi Financial Corporation and Subsidiaries Non-GAAP Financial Measures (unaudited) Pre-Tax Pre-Provision Income 12/31/2010 3/31/2011 6/30/2011 9/30/2011 12/31/2011 3/31/2012 6/30/2012 Net Income for the period $ 5,312 $ 10,437 $ 8,001 $ 4,203 $ 5,506 $ 7,341 $ 55,775 P
Slide 22: Non-GAAP Reconciliation: Tangible Common Equity Ratio
HAFC Non‐GAAP Reconciliation HANMI FINANCIAL CORPORATION AND SUBSIDIARIES NON-GAAP FINANCIAL MEASURES (UNAUDITED) TANGIBLE COMMON EQUITY TO TANGIBLE ASSETS RATIO 6/30/2012 3/31/2012 6/30/2011 Total Assets 2,846,652 $ 2,771,471 $ 2,710,835 $ Less Other Intangible Assets (1,417) (1,462) (1,825) Tangib
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