Hanmi Financial Corporation · NASDAQ:HAFC
Hanmi Financial — Q3 2021 Earnings Presentation
27 slides from Hanmi Financial's earnings presentation, Oct 26, 2021
Slide 1: 3Q21 Earnings Supplemental Presentation
3Q21 Earnings Supplemental Presentation October 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: 3Q21 Highlights
3Q21 Highlights Net Income Diluted EPS ROAA NIM Efficiency Ratio TBVPS* $26.6M $0.86 1.58% 3.07% 52.01% $19.96 • Net income of $26.6 million, or $0.86 per diluted share, up 20.1% from $22.1 million, or $0.72 per diluted share, from the prior quarter and up 62.5% from $16.3 million, or $0.53 per dilu
Slide 4: 3Q21 Financial Summary
3Q21 Financial Summary ($ million, except EPS) (1) Change 3Q21 2Q21 3Q20 Q/Q Y/Y Income Statement Summary Net interest income $ 50.0 $ 49.6 $ 45.6 0.8% 9.6% Noninterest income 12.5 8.9 7.1 40.8% 75.2% Operating revenue 62.5 58.5 52.7 6.9% 18.5% Noninterest expense 32.5 30.8 29.9 5.6% 8.6% Credit los
Slide 5: Loan Portfolio Composition
Loan Portfolio Composition $4.86 Billion Loan Portfolio (as of 3Q21) Commercial Real Estate Portfolio Loan Portfolio Composition ($ in millions) $ in millions Outstanding $3,529 QTD Average Yield 4.39% (1) RRE & Consumer Portfolio RRE $ in millions 7% Outstanding $355 QTD Average Yield 3.10% (2) C&I
Slide 6: CRE Portfolio Composition
CRE Portfolio Composition $3.53 Billion CRE Portfolio (as of 3Q21) Investor (Non-owner) Occupied CRE Portfolio Composition ($ in millions) # of Loans 980 Average Balance ($ in thousands) $2,503 Weighted Average Loan-to-Value Ratio 50.5% Weighted Average Debt Coverage Ratio 1.79x Construction Investo
Slide 7: Loan Portfolio Diversification
Loan Portfolio Diversification Loan portfolio is well diversified across property and business types. CRE Portfolio C&I Portfolio $3.53B $516M Wholesale Other Hospitality Other (1) Trade 15% 22% 20% 15% Mixed Use 5% Industrial Real Estate & 6% Leasing 7% Apartment Healthcare Manufacturing 8% 7% 29%
Slide 8: CRE Portfolio Geographical Exposure
CRE Portfolio Geographical Exposure Multifamily by State Construction by State CRE Composition by State $283M ($ in millions) $76M ($ in millions) $3,529M ($ in millions) New York Illinois $4 $17 1% 6% Illinois Other $9 New York $82 Texas 12% $125 2% $50 18% 4% Other $19 7% California California $19
Slide 9: Hospitality Segment by Location Type
Hospitality Segment by Location Type Hospitality segment(1), declined by 17% since March 2020, is now $777 million, representing 16% of the loan portfolio. Convention Center Casino 3% 3% Hospitality Portfolio Detail • Average balance within the segment was $3.2 million Airport 7% • Weighted average
Slide 10: Excellent Modification Trend
Excellent Modification Trend 99% decline in modifications since June 30, 2020 – from $1.4B to $12M as of September 30, 2021. Deferment Modified Payment (1) $593 $1,408 $600 Modified & Deferred Payments as of June 30, 2020 Modified & Deferred Payments as of September 30, 2021 $224 $500 -59% $400 ($ m
Slide 11: Deposit Base
Deposit Base Deposits increased to $5.73 billion, up 2% from the second quarter and 10% from the same quarter last year. • Growth was driven by noninterest-bearing demand deposits, which represents 45% of total deposits • Noninterest-bearing demand deposits increased 8% from the prior quarter and 30
Slide 12: Adjusted Pretax Pre-Provision Income
Adjusted Pretax Pre-Provision Income(3) ($ millions) • Led by 42% increase in the adjusted noninterest 3Q21 2Q21 1Q21 4Q20 3Q20 income(3), adjusted operating revenue(3) increased Income Statement Summary by 7% quarter-over-quarter Net interest income $ 50.0 12.2 $ 49.6 8.6 $ 46.0 7.0 $ 46.9 7.8 $ 45
Slide 13: Net Interest Income / Net Interest Margin
Net Interest Income / Net Interest Margin Net interest income was $50.0 million for the second quarter compared with $49.6 million for the prior quarter; net interest margin for the quarter was 3.07% (3.00%(1) excluding PPP loans) compared with 3.19% for the prior quarter (3.12%(1) excluding PPP loa
Slide 14: Noninterest Income
Noninterest Income Noninterest income was $12.5 million for the third quarter compared with $8.9 million for the prior quarter due primarily to a $2.3 million increase in gains on the sale of traditional SBA 7(a) loans and a $1.3 million increase in service charges, fees, and other income. Nonintere
Slide 15: ACL Analysis
ACL Analysis Allowance for credit losses was $76.6 million as of September 30, 2021 generating an allowance for credit losses to loans of 1.58% (1.58%(1) excluding PPP loans) compared with 1.73% (1.78%(1) excluding PPP loans) at the end of the prior quarter. ($ millions) September 30, 2021 June 30,
Slide 16: Asset Quality – Criticized Loans
Asset Quality – Criticized Loans Total criticized loans decreased by 8% quarter-over-quarter. ($ millions) September 30, June 30, Additions / Reductions / Pandemic- 2021 2021 Downgrades Upgrades impacted Special Mention $ 130.6 $ 121.8 $ 34.6 $ 26.0 $ 76.6 Classified $ 082.4 $ 110.1 $ 03.0 $ 30.7 $
Slide 17: Asset Quality – Nonaccrual Loans
Asset Quality – Nonaccrual Loans Nonaccrual loans(3) decreased 46% quarter-over-quarter. 33% of nonaccruals represent a single loan totaling $7.0 million. $39.6(1) CRE - Hospitality $9.1 $21.2(1) CRE - Construction/land CRE - Hospitality $10.0 $0.1 CRE - Construction/land All other CRE & C&I < $3M $
Slide 18: Liquidity
Liquidity Hanmi Financial’s cash and due from banks to assets ratio increased from 10.6% to 12.2% quarter- over-quarter. Cash and Due From Banks as a Liquid Asset Ratio(1) Percentage of Total Assets 25.5% 12.2% 22.2% 23.7% 10.6% 10.0% 17.4% 18.2% 5.9% 6.3% 3Q20 4Q20 1Q21 2Q21 3Q21 3Q20 4Q20 1Q21 2Q2
Slide 19: Securities Portfolio
Securities Portfolio The composition of the securities portfolio remains relatively unchanged quarter-over-quarter, with allocation to U.S. treasuries, municipal securities, and U.S. government agencies and sponsored agencies – mortgage backed securities, collateralized mortgage obligations, and not
Slide 20: Non-GAAP Reconciliation
Non-GAAP Reconciliation ($ thousands, except share, per share data and ratios) September 30, June 30, March 31, December 31, September 30, 2021 2021 2021 2020 2020 Tangible Common Equity to Tangible Assets Ratio Assets $6,776,533 $6,578,856 $6,438,401 $6,201,888 $6,106,782 Less goodwill and other in
Slide 21: Non-GAAP Reconciliation: Pretax Pre-Provision Income
Non-GAAP Reconciliation: Pretax Pre-Provision Income ($ millions) 3Q21 2Q21 1Q21 4Q20 3Q20 Pretax income $ 37.2 $ 31.0 $ 24.2 $ 19.7 $ 22.8 less credit loss expense (7.2) (3.3) 2.1 5.1 - Pretax, Pre-provision, income $ 30.0 $ 27.7 $ 26.3 $ 24.8 $ 22.8 less income from PPP gains (0.3) (0.2) (2.5) - -
Slide 22: Non-GAAP Reconciliation – PPP (3Q21)
Non-GAAP Reconciliation – PPP (3Q21) ($ in thousands, except share and per share data) Three Months Ended As of September 30, 2021 September 30, 2021 Tangible Common Equity to Tangible Assets Net Interest Margin Tangible assets $ 6,765,083 Net interest income $ 49,980 Less first and second draw PPP
Slide 23: Non-GAAP Reconciliation – PPP (2Q21)
Non-GAAP Reconciliation – PPP (2Q21) ($ in thousands, except share and per share data) Three Months Ended As of June 30, 2021 June 30, 2021 Tangible Common Equity to Tangible Assets Net Interest Margin Tangible assets $ 6,567,352 Net interest income $ 49,572 Less first and second draw PPP loans (158
Slide 24: Non-GAAP Reconciliation – PPP (1Q21)
Non-GAAP Reconciliation – PPP (1Q21) ($ in thousands, except share and per share data) Three Months Ended As of March 31, 2021 March 31, 2021 Tangible Common Equity to Tangible Assets Net Interest Margin Tangible assets $ 6,426,843 Net interest income $ 46,001 Less first and second draw PPP loans (2
Slide 25: 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 26: 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 27: 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