Hanmi Financial Corporation · NASDAQ:HAFC
Hanmi Financial — 14th Annual Financial Services Conference 2012
22 slides from Hanmi Financial's conference presentation, May 8, 2012
Slide 1: Hanmi Financial Corporation 14th Annual Financial Services Conference
Hanmi Financial Corporation 14th Annual Financial Services Conference May 10, 2012
Slide 2: Forward Looking Statement Disclaimer
Forward Looking Statement Disclaimer 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
Slide 3: Vision
Vision At Hanmi Bank we are committed to being regarded as the quality and market leader in the banking industry, thereby becoming the first choice of employees, customers and shareholders." Hanmi Bank Established in 1982, Hanmi Bank was founded to serve the Korean ‐ American Community. Since then,
Slide 4: Investment Highlights
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 Six consecutive quarters of profitability T
Slide 5: Premier Korean-American Bank in the U.S.
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, SBA
Slide 6: Korean-American Banking Opportunity
Korean ‐ American Banking Opportunity Large Korean ‐ American population in the U.S. with concentration in key markets Los Angeles is home to the largest Korean ‐ American population in the U.S. Other key markets include New York, New Jersey, Chicago, Texas, Seattle and Atlanta Continuing influx of
Slide 7: 2012 Developments
2012 Developments Hanmi’s 1Q12 earnings were its sixth consecutive profitable quarter, earning 10.21% ROE while maintaining a 10.55% tangible equity ratio Continued core earnings expansion for the quarter NIM increased 3bps to 3.69% in 1Q12 Efficiency ratio(1) declined to 66.56% from 69.03% Dramatic
Slide 8: Six Consecutive Quarter of Profitability
Six Consecutive Quarter of Profitability Earned $7.3 million, or $0.23 per diluted share in 1Q12 Return on Assets was 1.08% in 1Q12 Return on Equity was 10.21% in 1Q12 Return on Tangible Equity was 10.38% in 1Q12 Operating efficiencies improved with total overhead costs down 11% year –over year Tang
Slide 9: Improving Operating Efficiency
Improving Operating Efficiency Downward trend in efficiency ratio due to continued alignment of expense base to revenues Current platform will benefit from improvements driven by: Revenue growth Lower overhead expenses Elimination of non ‐ recurring charges Returning non ‐ performing assets to produ
Slide 10: Improving Deposit Mix
Improving Deposit Mix Growing Core Deposits $ in millions $2,500 $2,000 $1,500 $1,000 $500 $0 Jumbo CDs Retail Time Deposits Savings, Money Market & Now Demand Noninterest ‐ Bearing 29.9% 56.2% 70.9% 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 10
Slide 11: Diversified Loan Portfolio
Diversified Loan Portfolio Gross Loans $1.98 Billion at March 31. 2012 Commercial Term Loans 45% Commercial LOC 3% SBA 6% Consumer 2% International 2% Commercial RE 35% Construction 1% Residential RE 6% Source: Derived from Company’s 10 ‐ K and 10 ‐ Q filings. 11
Slide 12: Commercial RE Portfolio
Commercial RE Portfolio CRE Loans $717.5 Million at March 31, 2012 Office 2% Retail 25% Motel 18% Others 3% Multifamily 6% Mixed Use 9% Auto or Car Wash 3% Church 4% Gas Station 17% Golf Course 2% Industrial/Warehouse 6% Land 1% Manufacturing/Wholesale 2% Medical 2% Source: Derived from Company’s 10
Slide 13: Dramatic Credit Improvement
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 82% and 62% decline in NPAs and classified loans, respective
Slide 14: Conservatively Marked Portfolio
Conservatively Marked Portfolio As of 1Q12, NPLs have been charged down to 73% of original principal balances Net of specific reserves, NPLs are being carried at approximately 63% of original principal balances Hanmi has sold approximately $232 million of NPLs at 66% of original principal balances i
Slide 15: Strong Reserves
Strong Reserves Reserves NPLs of 161% is significantly higher than national averages Reserves / Gross Loans of 4.1% is also much higher than average of 3.02% of reserves held by US Banks and the 2.15% of banks with assets of $1 to $ 5 billion Reserves/NPAs HAFC SNL US Bank Index 180% 160% 140% 120%
Slide 16: Improving Asset Quality
Improving Asset Quality Net Charge ‐ Offs $ in millions Non ‐ Performing Assets $ in millions OREO Nonaccrual $200 $180 $160 $140 $120 $100 $80 $60 $40 $20 $0 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 $40 $35 $30 $25 $20 $15 $10 $5 $0 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 16
Slide 17: Improving Classified Assets
Improving Classified Assets All Classified Assets $ in millions $450 $400 $350 $300 $250 $200 $150 $100 $50 $0 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 Consumer International SBA Loans Commercial LOC C& I Secured by RE C&I Term Loans Residential Construction CRE Other CRE Land CRE Retail 17
Slide 18: Strategic Objectives
Strategic Objectives Focus on Resolving Regulatory Orders Expand Profitability Redeploy excess liquidity Continue to expand NIM Improve efficiency ratio Pursue Growth Opportunities Leverage long-term reputation with community to attractive new and former customers. SBA Loan Originations $ in million
Slide 19: Capitalization
Capitalization In November, raised new capital of $77.1 million in net proceeds, further solidifying its balance sheet Issued 12.6 million shares (adjusted for a 1 ‐ for ‐ 8 reverse split) The Bank’s tangible common equity to tangible assets ratio at March 31, 2012, was 12.71% up from 12.48% at Dece
Slide 20: Investment Highlights
Investment Highlights Oldest and second largest Korean American bank in the U.S. Well positioned branch network in Southern California’s Korean American neighborhoods. Premier deposit franchise and commercial banking platform Aggressive problem asset resolution resulting in significantly improved cr
Slide 21: Non-GAAP Reconciliation
Non ‐ GAAP Reconciliation HANMI FINANCIAL CORPORATION AND SUBSIDIARIES NON-GAAP FINANCIAL MEASURES (UNAUDITED) PRE-TAX PRE-PROVISION INCOME ($ in thousands) 3/31/2012 12/31/2011 9/30/2011 6/30/2011 3/31/2011 12/31/2010 Net Income $ 7,341 $ 5,506 $ 4,203 $ 8,001 $ 10,437 $ 5,312 Add Provision for Inc
Slide 22: Non-GAAP Reconciliation
Non ‐ GAAP Reconciliation HANMI FINANCIAL CORPORATION AND SUBSIDIARIES NON-GAAP FINANCIAL MEASURES (UNAUDITED) TANGIBLE COMMON EQUITY TO TANGIBLE ASSETS RATIO 3/31/2012 12/31/2011 3/31/2011 (In Thousands) Total Assets $ 2,771,471 $ 2,744,824 $ 2,879,666 Less Other Intangible Assets (1,462) (1,533) (
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