Hanmi Financial Corporation · NASDAQ:HAFC
Hanmi Financial — Lehman Brothers 2007 Financial Services Conference
40 slides from Hanmi Financial's conference presentation, Sep 11, 2007
Slide 1: Lehman Brothers 2007 Financial Services Conference
Lehman Brothers 2007 Financial Services Conference September 12, 2007
Slide 2: 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 Litigation Reform Act of
Slide 3: Korean-American Market
Korean-American market nine-year (1997- 2006) history - Loans: 26% CAGR - Deposits: 23% CAGR 40% of the Korean-American population of 2.2 million reside in California. Highest rates of business ownership with one per every eight Korean-American High savings rate Korean-American Market (Source: US Ko
Slide 4: Target Market Growth Drivers
Increased wealth in Korean-American community Korea is the 12th largest economy with a $6 billion current account surplus in 2006. Continuing immigration trend from Korea Wealthier and better educated recent immigrants Korea recently relaxed restrictions on overseas investment. Target Market Growth
Slide 5: Hanmi's Core Competencies
Expertise in serving ethnic immigrant markets Expertise in real estate lending Expertise in small business lending Hanmi's Core Competencies
Slide 6: Loan & Deposit Market Shares
Commanding market share among Korean- American banks in California Loan & Deposit Market Shares HAFC 2973.1 NARA 1312.9 CLFC 1585.4 WIBC 1765.9 Others 1823.9 Deposits Net Loans Note: As of June 30, 2007, based on SEC & FDIC filings of each company. Excludes 27% of NARA's balances, which are not from
Slide 7: Consistent Balance Sheet Growth
Financial Performance Consistent Balance Sheet Growth 2000 2001 2002 2003 2004 2005 2006 2Q 07 Loans 620 820 1000 1270 2235 2469 2837 3024 Deposits 940 1040 1290 1450 2529 2826 2945 2973 Assets 1030 1160 1460 1790 3104 3414 3725 3871 ($ in millions)
Slide 8: Loan Portfolio
Loan Portfolio Construction Loans 215.8 Consumer Loans 185.8 CRE-Investment Propertirs 759.5 CRE - Owner/User 1067.8 C & I Loans 829.1 As of June 30, 2007
Slide 9: Specialty Lending Activities
Robust SBA loan production - Seven loan production offices Specialized in low-income housing lending - $33 million low-income housing loans closed in the 1st half of 2007 Trade finance - The average loan portfolio balance in the second quarter of 2007 was $131 million. Specialty Lending Activities
Slide 10: Korean vs. Non-Korean Business
Korean vs. Non-Korean Business Hanmi has extended services to neighboring ethnic communities. Korean New Loans 0.58 Non-Korean New Loans 0.42 2Q 2007 2000 *Data was collected from funded loan list, using only surnames. Korean New Loans 0.75 Non-Korean New Loans 0.25
Slide 11: Sound Asset Quality
Sound Asset Quality 2000 2001 2002 2003 2004 2005 2006 2Q 07 Hanmi 0.004 0.0063 0.0065 0.0068 0.0027 0.0041 0.005 0.0074 2000 2001 2002 2003 2004 2005 2006 1H 07 Hanmi 0.0178 0.0119 0.0114 0.0106 0.01 0.01 0.0096 0.0105 Loan Loss Allowance / Gross Loans 1.05% 0.74% Non Performing Loans / Gross Loans
Slide 12: Asset Quality Trends
Asset Quality Trends 1Q 06 2Q 06 3Q 06 4Q 06 1Q 07 2Q 07 Non-Performing Assets 10.8 12.1 13.5 14.2 19.5 23.7 Delinquent Loans 18.8 23.1 24.1 19.6 37.3 32 ($ in millions)
Slide 13: Deposits Composition
Deposits Composition Non-Interest Bearing 720 TDs of $100,000 or More 1408 TDs of Less than $100,000 309 Interest Bearing Demand and Savings 536 As of June 30, 2007
Slide 14: Change of Balance Sheet Mix
Change of Balance Sheet Mix 2004 2Q 07 Loans 0.72 0 0.78 Investments 0.13 0 0.09 Others 0.14 0 0.12 2004 2Q 07 DDA 0.27 0 0.21 Core Deposits 0.28 0 0.16 CDs 0.39 0 0.51 Borrowings 0.03 0 0.08 Others 0.04 0 0.04 Assets Liabilities Others Investments Loans Others Borrowings CDs Core DDA
Slide 15: Fixed vs. Adjustable Loan Mix
Fixed vs. Adjustable Loan Mix Variable 0.66000000013148 Fixed 0.34 2Q 2007 2004 Variable 0.87 Fixed 0.13
Slide 16: Net Income and Diluted EPS
1Q 06 2Q 06 3Q 06 4Q 06 1Q 07 2Q 07 Net Income 14.8 15.9 17.6 17.3 13 15.3 Net Income 1Q 06 2Q 06 3Q 06 4Q 06 1Q 07 2Q 07 Diluted EPS 0.3 0.32 0.36 0.35 0.26 0.31 Diluted EPS Net Income and Diluted EPS ($ in millions)
Slide 17: Return on Average Equity / Assets
Return on Average Equity / Assets 2002 2003 2004 2005 2006 1H 07 ROE 0.1508 0.1451 0.1251 0.1394 0.1433 0.115 ROA 0.013 0.0118 0.0137 0.0179 0.0182 0.0151 ROTE 0.1535 0.1475 0.2573 0.2933 0.2709 0.206 ROE ROA 11.50% 20.60% 1.51%
Slide 18: Profitability Ratio Trends
Profitability Ratio Trends 1Q 06 2Q 06 3Q 06 4Q 06 1Q 07 2Q 07 Loan Yield 8.46% 8.65% 8.89% 8.77% 8.80% 8.68% Asset Yield 7.82% 8.06% 8.29% 8.18% 8.23% 8.17% Cost of Funds 3.97% 4.37% 4.73% 4.85% 4.87% 4.92% Spread 3.85% 3.69% 3.56% 3.33% 3.36% 3.25% NIM 4.92% 4.84% 4.79% 4.59% 4.61% 4.51%
Slide 19: Non-interest Income Growth
Non-interest Income Growth 2000 2001 2002 2003 2004 2005 2006 1H 07 Service charges on deposits 8.9 9.2 9.2 10.3 14.4 15.8 17.1 8.9 Trade finance fees 1.9 1.9 2.4 2.9 4 4.3 4.6 2.5 Insurance commissions 0 0 0.1 0.1 0.3 0.7 0.8 2.4 Remittance fees 0.5 0.6 0.8 1 1.7 2.1 2.1 1 Other service charges 0.8
Slide 20: Efficiency Ratio
Efficiency Ratio 02 4Q 03 1Q 03 2Q 03 3Q 03 4Q 04 1Q 04 2Q 04 3Q 04 4Q 05 1Q 05 2Q 05 3Q 05 4Q 06 1Q 06 2Q 06 3Q 06 4Q 07 1Q 07 2Q Efficiency Ratio 0.5565 0.5374 0.528 0.5123 0.5131 0.4777 0.5181 0.5029 0.4951 0.4438 0.403 0.3834 0.4193 0.391 0.4159 0.4014 0.3959 0.4364 0.4361 Acquisition 0 0 0 0 0
Slide 21: Capital Management
Total Risk-Based Capital Ratio - Hanmi Financial 11.59% - Well-Capitalized Level 10.00% Uses of Capital - Acquisitions - Organic growth - Stock repurchases - Dividends Capital Management
Slide 22: Next Several Years
Next Several Years G6HanmiBank
Slide 23: Key Directions
Regional Bank Korean Generations Multi-ethnic Key Directions
Slide 24: Regional Bank
Products & Services Pricing & Funding Organization Size Regional Bank
Slide 25: Multi-ethnic
Chinese Vietnamese Middle-eastern Multi-ethnic
Slide 26: Size: Where Is Growth?
— Size Where Is Growth? G6HanmiBank
Slide 27: Organic Growth
New Products New Services Technology Organic Growth
Slide 28: Non-Organic Growth
New Branches New LPOs New Business M&A Non-Organic Growth
Slide 29: Geography
Geography Branches LPOs M&A G6HanmiBank
Slide 30: LPOs: Depth and Breadth
— LPOs Depth Breadth G6HanmiBank
Slide 31: Koreatown, S.F., NY/NJ, Atlanta, Seattle, M&A
Koreatown S.F. NY/NJ Atlanta Seattle M&A
Slide 32: Real Estate, Non-real Estate, Fee-based Products
Real Estate Non-real Estate Fee-based Products
Slide 33: ABL, Cashflow, Non-real Estate
ABL Cashflow Non-real Estate
Slide 34: Fee Income Products
Cash Management Insurance Wealth Management Internet Banking Loan Sales Fee Income
Slide 35: Delivery: B&M
Branches Mini-branches Ethnic Branches LPOs BDOs Delivery: B&M
Slide 36: Delivery: Tech
Tele-banking Fax Banking Mobile Banking ATM Remote Capture Delivery: Tech
Slide 37: Human Resources
Human Resources G6HanmiBank
Slide 38: Welcome, Communication, Recognition, E3Wow
Welcome Communication Recognition E3Wow
Slide 39: Employees: Recruit, Hire, Deploy, Engagement
New Employees ---- Recruit, Hire, Deploy Current Employees ---- Engagement Hanmi U
Slide 40: Winner!
Winner! G6HanmiBank
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