Hanmi Financial Corporation · NASDAQ:HAFC
Hanmi Financial — Q4 2020 Earnings Presentation
25 slides from Hanmi Financial's earnings presentation, Jan 26, 2021
Slide 1: 4Q20 Earnings Supplemental Presentation
4Q20 Earnings Supplemental Presentation January 26, 2021 1
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: CEO message from Bonnie Lee
“It seems like much more than a year has passed because so much happened in 2020. None of us could have ever imagined serving our customers while masked and behind plastic barriers, spending countless hours and weekends processing PPP loans, and working tirelessly through a global pandemic. We remai
Slide 4: Managing Through Turbulent Times
Managing Through Turbulent Times COMMUNITY • Donated nearly $20,000 as part of the holiday giving campaign supporting Feeding America • Supported non-profit organizations in the EMPLOYEES community – Koreatown Youth Community Community Center (KYCC) and New • Sourced and distributed protective masks
Slide 5: Hanmi's Strengths in the Midst of COVID-19 Crisis
Hanmi’s Strengths in the Midst of COVID-19 Crisis C A P I TA L • The bank remains well capitalized, significantly above the regulatory requirements, with total risk-based capital ratio of 15.29% Capital BALANCE SHEET • The bank’s asset quality remains stable, with NPAs at 1.38% of total assets and A
Slide 6: Supporting our Customers
Supporting our Customers PAYCHECK PROTECTION PROGRAM PPP FUNDING DISTRIBUTION # of Loans $ Total $ Average $ Total Fees Funded Funding Balance As of June 30, 2020 LOANS UP TO $350K (5% FEE) (1) $309M 3,064 2,913 $155M $53K $7.8M $ of Loans Funded # of Loans Funded LOANS BETWEEN $350K AND $2M (3% FEE
Slide 7: Encouraging Modification Trend
Encouraging Modification Trend • 89% decline in modifications since June 30, 2020 – from $1.4B to $156M • Modified portfolio represents 3.2% of loans receivable as of December 31, 2020 Deferment Modified Payment (1) $593 1st Request – Deferment (June 30th) $1,408 $600 1st Request – Modified Payment(
Slide 8: 2020 Highlights
2020 Highlights Net Income Diluted EPS ROAA NIM Efficiency Ratio TBVPS* $42.2M $1.38 0.72% 3.19% 53.15% $18.41 • Net income of $42.2 million, or $1.38 per diluted share, up 28.7% from $32.8 million, or $1.06 per diluted share in 2019 Net interest income of $180.9 million, up 2.9% or $5.0 million y
Slide 9: 2020 Financial Summary
2020 Financial Summary ($ millions, except EPS) Twelve Months Ended December 31, December 31, 2020 2019 Change (1,2) • Net income of $42.2 million, or $1.38 per diluted share, compared Income Statement Summary with $32.8 million, or $1.06 per diluted share in 2019 Net interest income $ 180.9 $ 175.9
Slide 10: 4Q20 Financial Summary
4Q20 Financial Summary ($ million, except EPS) Change (1,2) 4Q20 3Q20 4Q19 Q/Q Y/Y Income Statement Summary • Net income of $14.3 million, or $0.47 per diluted Net interest income $ 46.9 $ 45.6 $ 43.9 2.8% 6.7% share, down 12.3% from $16.3 million, or $0.53 per Noninterest income 8.8 7.1 6.7 23.4% 3
Slide 11: Loan Portfolio Composition
Loan Portfolio Composition $4.88 Billion Loan Portfolio (as of 4Q20) Commercial Real Estate Portfolio Loan Portfolio Composition ($ millions) $ in millions Outstanding $3,354 Average Size $1.7 QTD Average Yield 4.38% RRE & Consumer Portfolio (1) $ in millions RRE $346 (7%) Outstanding $346 Average S
Slide 12: Loan Portfolio Diversification
Loan Portfolio Diversification Loan portfolio is well diversified across property and business types. CRE Portfolio C&I Portfolio $3.35B $757M Wholesale Other Trade 14% 14% Mixed Use 5% Hospitality 27% Industrial 5% Manufacturing 14% Apartment Others (1) 7% 54% Retail Trade 6% Gas Retail Station 26%
Slide 13: Hospitality Segment
Hospitality Segment Hospitality segment(1) is $907 million, representing 19% of the loan portfolio. Composition by Top 5 States(2) ($ millions) (modified vs. non-modified) Hospitality Portfolio Detail • Average balance within the segment is $3.3 million • Weighted average debt coverage ratio of the
Slide 14: Retail Segment
Retail Segment Retail segment(1) is $862 million, representing 18% of the loan portfolio. Composition by Top 5 States(2) Retail Portfolio Detail ($ millions) (modified vs. non-modified) • Average balance within the segment is $1.2 million • Weighted average debt coverage of the segment is 1.7x • Wei
Slide 15: Pretax Pre-Provision Income
Pretax Pre-Provision Income ($ millions) 4Q20 3Q20 2Q20 1Q20 4Q19 Income Statement Summary • Operating revenue increased by 3.7% quarter- Net interest income $ 46.9 $ 45.6 $ 44.4 $ 44.0 $ 43.9 over-quarter Noninterest income(1,3) 7.8 54.7 7.1 52.7 5.2 49.6 6.2 50.2 6.7 50.6 • Operating revenue inclu
Slide 16: Net Interest Income / Net Interest Margin
Net Interest Income / Net Interest Margin Net interest income was $46.9 million for the fourth quarter compared with $45.6 million for the prior quarter; net interest margin for the quarter was 3.13% (3.18%(1) excluding PPP loans) unchanged from the prior quarter. Net Interest Income ($ millions) Ne
Slide 17: ACL Analysis
ACL Analysis Allowance for credit losses was $90.4 million as of December 31, 2020 generating an allowance for credit losses to loans of 1.85% (1.97%(1) excluding PPP loans) compared with 1.79% (1.91%(1) excluding the PPP loans) at the end of the prior quarter. The increase primarily reflected an in
Slide 18: ACL by Loan Components
ACL by Loan Components ($ millions) December 31, 2020 September 30, 2020 June 30, 2020 March 31, 2020 January 1, 2020(1) Allowance Loans Allowance Loans Allowance Loans Allowance Loans Allowance Loans Loan Components CRE $ 50.5 $ 3,353.8 $ 47.8 $ 3,264.4 $ 53.6 $ 3,266.2 $ 37.0 $ 3,187.2 $ 34.7 $ 3,
Slide 19: Asset Quality
Asset Quality Nonaccrual loans represent 59% of the classified loans by the end of the fourth quarter. December 31, September 30, Additions / Reductions / Pandemic- ($ millions) 2020 2020 Downgrades Upgrades impacted Special Mention $ 77.0 $ 57.1 $ 37.5 $ 17.6 $ 49.1 Classified $ 140.2 $ 106.2 $ 45.
Slide 20: Liquidity
Liquidity With $17.3 million in cash on deposit with its bank subsidiary as of December 31, 2020, Hanmi Financial has ample liquidity resources to operate in the evolving, uncertain macroeconomic environment resulting from the pandemic. Liquid Asset Ratio ($ millions) 4Q20 3Q20 2Q20 1Q20 4Q19 Bank L
Slide 21: Securities Portfolio
Securities Portfolio The composition of the securities portfolio remains relatively unchanged quarter-over-quarter, with allocation to U.S. treasuries, and U.S. government agencies and sponsored agencies – mortgage- backed securities, collateralized mortgage obligations, and notes. ($ thousands) Dec
Slide 22: Non-GAAP Reconciliation
Non-GAAP Reconciliation ($ thousands, except share, per share data and ratios) 4Q20 3Q20 2Q20 1Q20 4Q19 Tangible Common Equity to Tangible Assets Ratio Assets $ 6,201,888 $ 6,106,782 $ 6,218,163 $ 5,617,690 $ 5,538,184 Less goodwill and other intangible assets (11,612) (11,677) (11,742) (11,808) (11
Slide 23: Non-GAAP Reconciliation – PPP (4Q20)
Non-GAAP Reconciliation – PPP (4Q20) ($ in thousands, except share and per share data) Three Months Ended As of December 31, 2020 December 31, 2020 Tangible Common Equity to Tangible Assets Net Interest Margin Tangible assets $ 6,190,276 Net interest income $ 46,877 Less PPP loans (295,702) Less PPP
Slide 24: Non-GAAP Reconciliation – PPP (3Q20)
Non-GAAP Reconciliation – PPP (3Q20) ($ in thousands, except share and per share data) Three Months Ended As of September 30, 2020 September 30, 2020 Tangible Common Equity to Tangible Assets Net Interest Margin Tangible assets $ 6,095,105 Net interest income $ 45,605 Less PPP loans (302,929) Less P
Slide 25: Non-GAAP Reconciliation – PPP (2Q20)
Non-GAAP Reconciliation – PPP (2Q20) ($ in thousands, except share and per share data) Three Months Ended As of June 30, 2020 June 30, 2020 Tangible Common Equity to Tangible Assets Net Interest Margin Tangible assets $ 6,206,421 Net interest income $ 44,442 Less PPP loans (301,836) Less PPP loan in