Hanmi Financial Corporation · NASDAQ:HAFC
Hanmi Financial — Q3 2020 Earnings Presentation
22 slides from Hanmi Financial's earnings presentation, Oct 27, 2020
Slide 1: 3Q20 Earnings Supplemental Presentation
3Q20 Earnings Supplemental Presentation October 27, 2020 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 Statement on Third Quarter Results
“In light of the significant challenges and uncertainty we faced in the first half of 2020 arising from the COVID-19 pandemic, I am extremely pleased with the financial and operational improvements we achieved in the third quarter. While we will continue to proactively monitor the macroeconomic envi
Slide 4: Managing Through Turbulent Times
Managing Through Turbulent Times COMMUNITY • In an effort to promote more active use of Hanmi mobile banking and mitigate the risk of phishing and scams related to COVID-19, launched “Bank Safe, Bank EMPLOYEES Smart” campaign Community • Awarded $132 thousand to 64 students, • Sourced and distribute
Slide 5: Hanmi's Strengths in the Midst of COVID-19 Crisis
Hanmi’s Strengths in the Midst of COVID-19 Crisis C AP I TAL • The bank remains well capitalized, significantly above the regulatory requirements Capital BALANCE SHEET • The bank’s asset quality remains stable, with NPAs at 1.07%* of total assets and ACL at 1.79% of loans (1.91% excluding PPP loans)
Slide 6: Supporting our Customers
Supporting our Customers PAYCHECK PROTECTION PROGRAM(1) PPP FUNDING DISTRIBUTION # of Loans $ Total $ Average 3,064 $309M $11M Funded Funding Balance $ Total Fees # of Loans $ of Loans Total Fees LOANS UP TO $350K (5% FEE) (2) Funded Funded 2,913 $155M $53K $7.8M LOANS BETWEEN $350K AND $2M (3% FEE)
Slide 7: Encouraging Modification Trend
Encouraging Modification Trend • 59% decline in modifications since June 30th – from $1.4B to $579M • Approximately 70% of the second-round modifications will provide interest payments Deferment Interest Only 1st Request - Deferment $593 $59 1st Request – Interest Only -26% $1,408 2nd Request - Defe
Slide 8: 3Q20 Highlights
3Q20 Highlights Net Income Diluted EPS ROAA NIM Efficiency Ratio TBVPS* $16.3M $0.53 1.08% 3.13% 56.73% $17.95 • Net income of $16.3 million, or $0.53 per diluted share, up 78.1% from $9.2 million or $0.30 per share for the prior quarter • Loans receivable of $4.83 billion in-line with the prior qua
Slide 9: 3Q20 Financial Summary
3Q20 Financial Summary ($ million, except EPS) Change (1,2) 3Q20 2Q20 3Q19 Q/Q Y/Y Income Statement Summary • Net income of $16.3 million, or $0.53 per diluted share, up Net interest income $ 45.6 $ 44.4 $ 44.1 2.6% 3.5% 78.1% from $9.2 million, or $0.30 per share, in the second Noninterest income 7
Slide 10: Loan Portfolio Composition
Loan Portfolio Composition $4.83 Billion Loan Portfolio (as of 3Q20) Commercial Real Estate Portfolio Loan Portfolio Composition ($ million) $ in millions Outstanding $3,264 Average Size $1.6 QTD Average Yield 4.41% RRE & Consumer Portfolio(1) (1) $ in million RRE Outstanding $371 $371 (7%) Average
Slide 11: Loan Portfolio Diversification
Loan Portfolio Diversification Loan portfolio is well diversified across property and business types. CRE Portfolio C&I Portfolio $3.26B $765M Wholesale Other Mixed Use Trade 14% 5% 16% Hospitality Industrial 28% 6% Manufacturing (1) Others 10% Apartment 7% 55% Retail Trade 6% Gas Information Retail
Slide 12: Hospitality Segment
Hospitality Segment Hospitality segment(1) is $929 million, representing 19% of the loan portfolio. Composition by Top 5 States(2) ($ million) (modified vs. non-modified) Hospitality Portfolio Detail • Average balance within the segment is $3.3 million • Weighted average debt coverage ratio of the s
Slide 13: Retail Segment
Retail Segment Retail segment(1) is $842 million, representing 17% of the loan portfolio. Composition by Top 5 States(2) Retail Portfolio Detail ($ million) (modified vs. non-modified) • Average balance within the segment is $1.2 million • Weighted average debt coverage of the segment is 1.8x • Weig
Slide 14: Pretax Pre-Provision Income
Pretax Pre-Provision Income ($ million) 3Q20 2Q20 1Q20 4Q19 • Operating revenue was relatively stable quarter- Income Statement Summary over-quarter Net interest income $ 45.6 $ 44.4 $ 44.0 $ 43.9 Noninterest income(1,3) 7.1 5.2 6.2 6.7 • Operating revenue includes SBA gains of Operating revenue 52.
Slide 15: Net Interest Income / Net Interest Margin
Net Interest Income / Net Interest Margin Net interest income was $45.6 million for the third quarter compared with $44.4 million for the prior quarter; net interest margin for the third quarter was 3.13% (3.18% excluding PPP loans) compared with 3.15% (3.21% excluding PPP loans) for the prior quart
Slide 16: ACL Analysis
ACL Analysis Allowance for credit losses was $86.6 million as of September 30, 2020 generating an allowance for credit losses to loans of 1.79% (1.91% excluding PPP loans) relatively consistent with the prior quarter due to sanguine prospects for the economy including lower than expected projected a
Slide 17: ACL by Loan Components
ACL by Loan Components Allowance for credit losses stayed relatively consistent with the second quarter. ($ million) September 30, 2020 June 30, 2020 March 31, 2020 January 1, 2020 (1) Allowance Loans Allowance Loans Allowance Loans Allowance Loans Loan Components CRE $ 47.8 $ 3,264.4 $ 53.6 $ 3,266
Slide 18: Liquidity
Liquidity With $16.1 million in cash on deposit with its bank subsidiary as of September 30, 2020, Hanmi Financial has ample liquidity resources to operate in the evolving, uncertain macroeconomic environment resulting from the pandemic. Liquid Asset Ratio ($ million) 3Q20 2Q20 1Q20 4Q19 Bank Liquid
Slide 19: 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. ($ thousand) Sept
Slide 20: Non-GAAP Reconciliation
Non-GAAP Reconciliation ($ thousand, except share, per share data and ratios) 3Q20 2Q20 1Q20 4Q19 3Q19 Tangible Common Equity to Tangible Assets Ratio Assets $ 6,106,782 $ 6,218,163 $ 5,617,690 $ 5,538,184 $ 5,527,982 Less goodwill and other intangible assets (11,677) (11,742) (11,808) (11,873) (11,
Slide 21: 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 22: 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