Hanmi Reports Strong Loan Production and 4.9% Increase in Net Income for Second Quarter 2017

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2017 Second Quarter Highlights:    

  • Second quarter net income of $14.5 million, or $0.45 per diluted share, up 4.9% from the prior quarter and up 2.2% year-over-year.
  • Loans and leases receivable of $4.07 billion, up 13.2% in the second quarter on an annualized basis driven by new loan and lease production of $279.0 million; Loans and leases receivable up 18.1% year-over-year.
  • Deposits of $4.26 billion, up 17.2% in the second quarter on an annualized basis; Total deposits are up 18.7% year-over-year.
  • Net interest income increased to $43.2 million, up nearly 2% from the prior quarter and 8% year-over-year.
  • Net interest margin, on a taxable equivalent basis, was 3.81% compared with 3.89% reflecting the $100 million 5.45% subordinated notes issued at the end of the previous quarter; A year ago, net interest margin was 4.02% which included an 18 basis point effect of acquisition accounting. 
  • Return on average assets was 1.19% and return on average equity was 10.65% compared with 1.18% and 10.46% for the prior quarter and 1.32% and 10.98% a year ago.

LOS ANGELES, July 18, 2017 (GLOBE NEWSWIRE) -- Hanmi Financial Corporation (NASDAQ:HAFC) (or “Hanmi”), the parent company of Hanmi Bank (the “Bank”) today reported net income for the 2017 second quarter of $14.5 million or $0.45 per diluted share, compared with $13.8 million, or $0.43 per diluted share for the 2017 first quarter and $14.1 million, or $0.44 per diluted share for the 2016 second quarter.

For the first six months of 2017, net income decreased 2.5% to $28.2 million, or $0.87 per diluted share, compared with $29.0 million, or $0.90 per diluted share, for the first six months of 2016.

Mr. C. G. Kum, President and Chief Executive Officer, said, “Hanmi’s second quarter performance continues to reflect our ability to generate relatively high loan growth while preserving conservative underwriting discipline.  During the second quarter, we were able to generate net loan growth of 3.3% with weighted average loan-to-value of 59% and debt-coverage-ratio of 2.0 times for new commercial real estate loans.  Our asset quality metrics remain favorable with non-performing assets at 42 basis points of total assets and negligible net charge-off levels.  I am pleased to note that Hanmi’s net profits for the second quarter resulted in, once again, favorable return on average assets of 1.19% and return on average equity of 10.65%.”

Quarterly Highlights                            
 (in thousands, except per share data)                             
                             
   For the Three Months Ended    Amount Change  
  Jun 30,   Mar 31,   Dec 31,   Sep 30,   Jun 30,   Q2-17   Q2-17  
    2017       2017       2016       2016       2016     vs. Q1-17   vs. Q2-16  
                             
Net income $ 14,457     $ 13,783     $ 14,416     $ 13,121     $ 14,148     $ 674   $ 309  
Net income per diluted common share $ 0.45     $ 0.43     $ 0.45     $ 0.41     $ 0.44     $ 0.02   $ 0.01  
                             
Assets $ 4,973,346     $ 4,811,821     $ 4,701,346     $ 4,402,180     $ 4,441,333     $ 161,525   $ 532,013  
Loans and leases receivable $ 4,073,062     $ 3,943,951     $ 3,844,769     $ 3,552,659     $ 3,449,310     $ 129,111   $ 623,752  
Deposits $ 4,259,173     $ 4,083,165     $ 3,809,737     $ 3,771,207     $ 3,589,289     $ 176,008   $ 669,884  
                             
Return on average assets   1.19 %     1.18 %     1.26 %     1.19 %     1.32 %     0.01     -0.13  
Return on average stockholders' equity   10.65 %     10.46 %     10.84 %     9.88 %     10.98 %     0.19     -0.33  
                             
Net interest margin (1)   3.81 %     3.89 %     3.96 %     3.86 %     4.02 %     -0.08     -0.21  
Net interest margin excluding acquisition accounting (1)   3.76 %     3.84 %     3.86 %     3.75 %     3.84 %     -0.08     -0.08  
Efficiency ratio (3)   54.74 %     54.95 %     51.77 %     58.72 %     56.46 %     -0.22     -1.72  
Efficiency ratio excluding merger and integration costs   54.75 %     55.01 %     51.15 %     58.72 %     56.46 %     -0.26     -1.70  
                             
Tangible common equity to tangible assets (2)   10.83 %     10.98 %     11.05 %     12.04 %     11.79 %     -0.14     -0.96  
Tangible common equity per common share (2) $ 16.59     $ 16.26     $ 16.03     $ 16.42     $ 16.23     $ 0.33   $ 0.36  
                             
(1)  Amounts calculated on a fully taxable equivalent basis using the current statutory federal tax rate.                      
(2)  Refer to "Non-GAAP Financial Measures" for further details.                          
(3)  Noninterest expense divided by net interest income plus noninterest income                          
                             

Results of Operations 
Second quarter net interest income increased 1.9% to $43.2 million from $42.4 million in the first quarter primarily from the solid expansion of loans and leases receivable, partially offset by an increase in deposit and subordinated debt interest expense. Average time deposits increased 12.5% and the average subordinated debt balance increased 277.5%.

   As of or For the Three Months Ended (in thousands)    Percentage Change
  Jun 30,   Mar 31,   Dec 31,   Sep 30,   Jun 30,   Q2-17   Q2-17
Net Interest Income   2017       2017       2016       2016       2016     vs. Q1-17   vs. Q2-16
                           
Interest and fees on loans and leases(1) $ 47,971     $ 45,378     $ 43,780     $ 41,150     $ 40,645       5.7 %     18.0 %
Interest on securities   2,949       2,520       2,550       2,701       2,886       17.0 %     2.2 %
Dividends on FRB and FHLB stock   283       374       927       419       579       -24.3 %     -51.1 %
Interest on deposits in other banks   123       77       55       55       49       59.7 %     151.0 %
Total interest and dividend income $ 51,326     $ 48,349     $ 47,312     $ 44,325     $ 44,159       6.2 %     16.2 %
                           
Interest on deposits   6,463       5,154       4,799       4,358       3,684       25.4 %     75.4 %
Interest on borrowings   49       468       207       179       299       -89.5 %     -83.6 %
Interest on subordinated debentures   1,636       373       241       206       196       338.6 %     734.7 %
Total interest expense   8,148       5,995       5,247       4,743       4,179       35.9 %     95.0 %
Net interest income $ 43,178     $ 42,354     $ 42,065     $ 39,582     $ 39,980       1.9 %     8.0 %
                           
(1)  Includes loans held for sale.                          
                           

Net interest margin (on a taxable equivalent basis) for the second quarter of 2017 was 3.81% compared with 3.89% for the first quarter of 2017. The 8 basis point decrease in net interest margin for the recent quarter compared with the preceding quarter was primarily due to the full quarter impact of the first quarter’s subordinated debt issuance - approximately 11 basis points.  The yield on average interest-earning assets increased 8 basis points to 4.52% in the first quarter while the rate paid on average interest-bearing deposits increased 9 basis points to 0.88%.

   For the Three Months Ended (in thousands)    Percentage Change
  Jun 30,   Mar 31,   Dec 31,   Sep 30,   Jun 30,   Q2-17   Q2-17
Average Earning Assets and Interest-bearing Liabilities   2017       2017       2016       2016       2016     vs. Q1-17   vs. Q2-16
Loans (1) $ 3,951,934     $ 3,881,686     $ 3,690,955     $ 3,477,428     $ 3,328,416       1.8 %     18.7 %
Securities   585,384       526,549       530,241       589,832       657,756       11.2 %     -11.0 %
FRB and FHLB stock   16,385       16,385       16,385       19,207       30,808       0.0 %     -46.8 %
Interest-bearing deposits in other banks   47,402       38,600       40,548       43,678       38,598       22.8 %     22.8 %
Average interest-earning assets $ 4,601,105     $ 4,463,220     $ 4,278,129     $ 4,130,145     $ 4,055,578       3.1 %     13.5 %
                           
Demand: interest-bearing $ 93,873     $ 97,602     $ 95,399     $ 93,852     $ 96,397       -3.8 %     -2.6 %
Money market and savings   1,532,733       1,406,903       1,305,565       1,141,747       944,355       8.9 %     62.3 %
Time deposits   1,320,005       1,173,184       1,165,828       1,244,127       1,268,127       12.5 %     4.1 %
Average interest-bearing deposits   2,946,611       2,677,689       2,566,792       2,479,726       2,308,879       10.0 %     27.6 %
Borrowings   20,000       270,500       174,674       152,935       278,077       -92.6 %     -92.8 %
Subordinated debentures   116,850       30,950       18,919       18,844       18,781       277.5 %     522.2 %
Average interest-bearing liabilities $ 3,083,461     $ 2,979,139     $ 2,760,385     $ 2,651,505     $ 2,605,737       3.5 %     18.3 %
                           
(1)  Includes loans held for sale.                          
                           
   For the Three Months Ended    Percentage Change
  Jun 30,   Mar 31,   Dec 31,   Sep 30,   Jun 30,   Q2-17   Q2-17
Average Yields and Rates   2017       2017       2016       2016       2016     vs. Q1-17   vs. Q2-16
Loans (1)   4.87 %     4.74 %     4.72 %     4.71 %     4.91 %     2.7 %     -0.8 %
Securities (2)   2.35 %     2.30 %     2.31 %     2.18 %     2.07 %     2.2 %     13.8 %
FRB and FHLB stock   6.93 %     9.26 %     22.63 %     8.73 %     7.52 %     -25.2 %     -7.8 %
Interest-bearing deposits in other banks   1.04 %     0.81 %     0.54 %     0.50 %     0.51 %     28.4 %     103.7 %
Interest-earning assets   4.52 %     4.44 %     4.45 %     4.32 %     4.43 %     1.8 %     2.0 %
                           
Interest-bearing deposits   0.88 %     0.78 %     0.74 %     0.70 %     0.64 %     12.8 %     36.6 %
Borrowings   0.98 %     0.70 %     0.47 %     0.47 %     0.43 %     40.0 %     126.6 %
Subordinated debentures   5.59 %     4.82 %     5.07 %     4.35 %     4.20 %     16.0 %     33.1 %
Interest-bearing liabilities   1.06 %     0.82 %     0.76 %     0.71 %     0.65 %     29.3 %     64.3 %
                           
Net interest margin (taxable equivalent basis)   3.81 %     3.89 %     3.96 %     3.86 %     4.02 %     -2.1 %     -5.1 %
                           
Cost of deposits   0.62 %     0.54 %     0.50 %     0.47 %     0.43 %     14.8 %     44.2 %
                           
(1)  Includes loans held for sale.                          
(2)  Amounts calculated on a fully taxable equivalent basis using the current statutory federal tax rate.                
                           

For the second quarter of 2017, Hanmi recorded a provision for loan losses of $0.4 million, which included a negative loan loss provision of $0.2 million relating to Purchased Credit Impaired (“PCI”) loans from the 2014 acquisition. For the prior quarter, the negative loan loss provision was $0.1 million, all of which related to PCI loans.

Second quarter noninterest income increased $2.5 million or 34.4% to $9.7 million from $7.2 million for the first quarter of 2017 primarily due to a $1.2 million increase in gains on sale of SBA loans, a $0.7 million increase in gains on sales of securities and a $0.4 million increase in disposition gain on PCI loans. Gains on sales of SBA loans were $2.7 million for the second quarter 2017, up from $1.5 million from the first quarter of 2017 as the volume of SBA loans sold increased to $32.4 million from $19.6 million for the preceding quarter. Gains on the sales of securities were $0.9 million for the second quarter of 2017, up from $0.3 million in the first. Disposition gains on PCI loans were $0.5 million for the second quarter of 2017, compared with $0.2 million for the prior quarter. PCI loans from the 2014 acquisition were $8.8 million at the end of the second quarter of 2017, down 2.0% from the prior quarter.

   For the Three Months Ended (in thousands)    Percentage Change
  Jun 30,   Mar 31,   Dec 31,   Sep 30,   Jun 30,   Q2-17   Q2-17
Noninterest Income   2017       2017       2016       2016       2016     vs. Q1-17   vs. Q2-16
Service charges on deposit accounts $ 2,461     $ 2,528     $ 2,599     $ 2,883     $ 2,898       -2.7 %     -15.1 %
Trade finance and other service charges and fees   1,269       1,047       1,132       992       1,064       21.2 %     19.3 %
Other operating income   1,826       1,726       991       2,348       1,674       5.8 %     9.1 %
Service charges, fees & other   5,556       5,301       4,722       6,223       5,636       4.8 %     -1.4 %
                           
Gain on sale of SBA loans   2,668       1,464       1,787       1,616       1,774       82.2 %     50.4 %
Disposition gain on PCI loans   540       183       1,559       789       1,963       195.1 %     -72.5 %
Net gain on sales of securities   938       269       -       46       -       248.7 %     0.0 %
Total noninterest income $ 9,702     $ 7,217     $ 8,068     $ 8,674     $ 9,373       34.4 %     3.5 %
                           

Noninterest expense for the second quarter increased $1.7 million, or 6.3%, to $28.9 million from $27.2 million for the first quarter primarily due to a $0.8 million increase in other operating expenses and a $0.6 million increase in OREO expense. Excluding OREO expense, which increased $0.6 million, and merger and integration costs, noninterest expense increased $1.1 million or 3.9% quarter over quarter.  Although salaries and benefits declined $0.5 million or 2.8% from the seasonal decline of payroll taxes and employee benefits, advertising and promotion was seasonally higher increasing $0.2 million while professional fees increased $0.4 million on higher audit and tax fees.  Other expense increased $0.8 million due to the first quarter benefit from a $0.5 million reduction in our SBA servicing valuation allowance and a second quarter loss of $0.1 million on the sale of branch properties.  As a result of the increase in revenue from the growth in earning assets and the gains on sale of SBA loans and securities, the efficiency ratio improved to 54.7% in the second quarter from 55.0% in the prior quarter.

   For the Three Months Ended (in thousands)    Percentage Change
  Jun 30,   Mar 31,   Dec 31,   Sep 30,   Jun 30,   Q2-17   Q2-17
    2017       2017       2016       2016       2016     vs. Q1-17   vs. Q2-16
Noninterest Expense                          
Salaries and benefits $ 16,623     $ 17,104     $ 16,246     $ 15,950     $ 16,061       -2.8 %     3.5 %
Occupancy and equipment   3,878       3,982       3,641       3,917       3,938       -2.6 %     -1.5 %
Data processing   1,738       1,631       1,455       1,330       1,454       6.6 %     19.5 %
Professional fees   1,554       1,148       1,311       1,090       1,509       35.4 %     3.0 %
Supplies and communication   745       635       683       821       709       17.3 %     5.1 %
Advertising and promotion   1,015       802       1,140       1,153       1,094       26.6 %     -7.2 %
Other operating expenses   2,881       2,070       1,825       4,003       2,915       39.2 %     -1.2 %
subtotal   28,434       27,372       26,301       28,264       27,680       3.9 %     2.7 %
                           
OREO expense (income)   519       (101 )     (658 )     73       183       -613.9 %     183.6 %
Merger and integration costs   (9 )     (31 )     312       -       -       -71.0 %     0.0 %
Total noninterest expense $ 28,944     $ 27,240     $ 25,955     $ 28,337     $ 27,863       6.3 %     3.9 %
                           

Hanmi recorded a provision for income taxes of $9.1 million for the second quarter of 2017, representing an effective tax rate of 38.5%, compared with $8.6 million, representing an effective tax rate of 38.5%, for the preceding quarter.

Financial Position
Total assets were $4.97 billion at June 30, 2017, a 3.4% increase from $4.81 billion at March 31, 2017. The increase in total assets was primarily due to an increase in loans and leases receivable.

Loans and leases receivable, before the allowance for loan and lease losses, were $4.07 billion at June 30, 2017, up 3.3% from $3.94 billion at March 31, 2017. The increase in loans and leases from the prior quarter reflects Hanmi’s strong loan production, up 37.6% to $279.0 million from $202.7 million for the first quarter of 2017. Loans held for sale, representing the guaranteed portion of SBA loans, were $10.9 million at June 30, 2017 compared with $8.8 million at the end of the 2017 first quarter.

Loans and leases receivable, before the allowance for loan and lease losses, increased 18.1% from $3.45 billion for the second quarter last year, primarily due to strong loan production over the last twelve months, as well as last year’s acquisition and commencement of the Commercial Equipment Leasing division.

   As of (in thousands)    Percentage Change
  Jun 30,   Mar 31,   Dec 31,   Sep 30,   Jun 30,   Q2-17   Q2-17
    2017       2017       2016       2016       2016     vs. Q1-17   vs. Q2-16
Loan and Lease Portfolio                          
Commercial real estate loans $ 3,068,069     $ 2,991,123     $ 2,939,608     $ 2,880,012     $ 2,835,076       2.6 %     8.2 %
Residential real estate loans   384,044       359,152       338,767       330,675       296,496       6.9 %     29.5 %
Commercial and industrial loans   346,150       316,284       300,220       319,656       293,073       9.4 %     18.1 %
Lease receivable   257,525       259,591       243,294       -       -       -0.8 %     0.0 %
Consumer loans   17,274       17,801       22,880       22,316       24,665       -3.0 %     -30.0 %
Loans and leases receivable   4,073,062       3,943,951       3,844,769       3,552,659       3,449,310       3.3 %     18.1 %
Loans held for sale   10,949       8,849       9,316       6,425       12,833       23.7 %     -14.7 %
Total loans $ 4,084,011     $ 3,952,800     $ 3,854,085     $ 3,559,084     $ 3,462,143       3.3 %     18.0 %
                           
Acquired Loans(1)                          
PCI loans, net of discounts $ 8,784     $ 8,960     $ 9,863     $ 15,540     $ 15,020       -2.0 %     -41.5 %
Non-PCI loans, net of discounts   96,600       101,062       104,733       108,434       117,750       -4.4 %     -18.0 %
Total acquired loans $ 105,384     $ 110,022     $ 114,596     $ 123,974     $ 132,770       -4.2 %     -20.6 %
                           
(1)  Includes UCB acquired only.                          
                           

New loan production for the 2017 second quarter was $279.0 million while payoffs and amortization was $131.4 million compared with $202.7 million and $117.8 million for the first quarter of 2017. Second quarter 2017 new loan production was comprised of $137.7 million of commercial real estate loans, $58.9 million of commercial and industrial loans, $48.0 million of SBA loans, $33.1 million of commercial leases and $1.2 million of consumer loans. Loan purchases for the 2017 second quarter were $39.4 million, compared with $33.6 million in the first quarter of 2017.  For the second quarter of 2017, commercial real estate loans as a percentage of total loans and leases decreased to 75.3% compared with 82.2% for the same period last year.

Deposits increased to $4.26 billion at the end of the 2017 second quarter from $4.08 billion at the end of the preceding quarter. Time deposits led this growth increasing 14.0%.  The loans to deposits ratio at June 30, 2017 declined to 95.6% from 96.6% at March 31, 2017.

Deposits increased 18.7% from $3.59 billion in the second quarter last year, primarily due to the strength of Hanmi’s retail branch network as money market and savings balance increased 49.3% compared a year ago.

   As of (in thousands)    Percentage Change
   Jun 30,   Mar 31,   Dec 31,   Sep 30,   Jun 30,   Q2-17   Q2-17
    2017       2017       2016       2016       2016     vs. Q1-17   vs. Q2-16
Deposit Portfolio                          
Demand: noninterest-bearing $ 1,260,929     $ 1,241,272     $ 1,203,240     $ 1,231,967     $ 1,189,528       1.6 %     6.0 %
Demand: interest-bearing   93,390       99,433       96,856       94,272       92,776       -6.1 %     0.7 %
Money market and savings   1,528,127       1,534,578       1,329,324       1,242,502       1,023,421       -0.4 %     49.3 %
Time deposits of $250,000 or less   916,197       731,445       734,383       819,471       891,197       25.3 %     2.8 %
Time deposits of more than $250,000   460,530       476,437       445,934       382,995       392,367       -3.3 %     17.4 %
Total deposits $ 4,259,173     $ 4,083,165     $ 3,809,737     $ 3,771,207     $ 3,589,289       4.3 %     18.7 %
                           

At June 30, 2017, stockholders’ equity was $550.1 million, compared with $539.5 million at March 31, 2017. Tangible common stockholders’ equity was $537.4 million, or 10.83% of tangible assets, compared with $526.7 million, or 10.98% of tangible assets at March 31, 2017. Tangible book value per share was $16.59, compared to $16.26 in the first quarter.

Hanmi continues to be well capitalized, with a preliminary Tier 1 risk-based capital ratio of 12.72% and a Total risk-based capital ratio of 15.87% at June 30, 2017, versus 12.93% and 16.16%, respectively, at March 31, 2017.

   As of    Amount Change
  Jun 30,   Mar 31,   Dec 31,   Sep 30,   Jun 30,   Q2-17   Q2-17
    2017       2017       2016       2016       2016     vs. Q1-17   vs. Q2-16
Regulatory Capital ratios (1)                          
Hanmi Financial                          
Total risk-based capital   15.87 %     16.16 %     13.86 %     14.99 %     15.16 %     -0.29       0.71  
Tier 1 risk-based capital   12.72 %     12.93 %     13.02 %     13.89 %     14.00 %     -0.21       -1.28  
Common equity tier 1 capital   12.36 %     12.56 %     12.73 %     13.73 %     13.85 %     -0.20       -1.49  
Tier 1 leverage capital ratio   11.08 %     11.21 %     11.53 %     11.68 %     11.69 %     -0.13       -0.61  
Hanmi Bank                          
Total risk-based capital   15.63 %     15.91 %     13.64 %     14.61 %     14.58 %     -0.28       1.05  
Tier 1 risk-based capital   14.81 %     15.07 %     12.80 %     13.50 %     13.43 %     -0.26       1.38  
Common equity tier 1 capital   14.81 %     15.07 %     12.80 %     13.50 %     13.43 %     -0.26       1.38  
Tier 1 leverage capital ratio   12.90 %     13.08 %     11.33 %     11.36 %     11.21 %     -0.18       1.69  
                           
(1)  Preliminary ratios for June 30, 2017                          
                           

Hanmi declared a cash dividend of $0.19 per common share on its common stock in the 2017 second quarter, in line with the prior quarter. The dividend was paid on May 24, 2017, to stockholders of record as of the close of business on May 8, 2017.

Asset Quality
Nonperforming loans, excluding PCI loans, were $16.5 million at the end of the second quarter of 2017, or 0.41% of loans, compared with $12.8 million at the end of the first quarter of 2017, or 0.32% of loans.

OREO was $4.3 million at the end of the second quarter of 2017, down from $4.6 million at the end of the prior quarter. Nonperforming assets were $20.8 million at the end of the second quarter of 2017, or 0.42% of assets, compared with 0.36% of assets at the end of the prior quarter.

Gross charge-offs for the second quarter of 2017 were $665,000 compared with $186,000 for the preceding quarter. Recoveries of previously charged-off loans for the second quarter of 2017 were $849,000 compared with $989,000 for the preceding quarter. As a result, there were net recoveries of $184,000 for the second quarter of 2017, compared to net recoveries of $803,000 for the preceding quarter.

The allowance for loan and lease losses was $33.8 million as of June 30, 2017, generating an allowance of loan losses to loans receivable ratio of 0.83% compared with 0.84% as of March 31, 2017.

   As of or for the Three Months Ended (in thousands)    Amount Change
  June 30,   Mar 31,   Dec 31,   Sep 30,   Jun 30,   Q2-17   Q2-17
    2017       2017       2016       2016       2016     vs. Q1-17   vs. Q2-16
Asset Quality                          
Nonperforming assets (1):                          
Nonaccrual Non-PCI loans $ 16,464     $ 12,774     $ 11,406     $ 10,948     $ 12,341     $ 3,690     $ 4,123  
Loans 90 days or more past due and still accruing   -       -       -       -       -       -       -  
Nonperforming Non-PCI loans   16,464       12,774       11,406       10,948       12,341       3,690       4,123  
OREO, net   4,321       4,636       7,484       10,971       11,846       (315 )     (7,525 )
Nonperforming assets $ 20,785     $ 17,410     $ 18,890     $ 21,919     $ 24,187     $ 3,375     $ (3,402 )
                           
Delinquent loans:                          
Loans, 30 to 89 days past due and still accruing $ 9,431     $ 6,273     $ 5,718     $ 1,066     $ 1,517     $ 3,158     $ 7,914  
Delinquent loans to loans   0.23 %     0.16 %     0.15 %     0.03 %     0.04 %     0.07       0.19  
                           
Allowance for loan and lease losses:                          
Balance at beginning of period $ 33,152     $ 32,429     $ 38,972     $ 39,707     $ 41,026          
Loan and lease loss provision (income)   422       (80 )     151       (1,450 )     (1,515 )        
Net loan charge-offs (recoveries)   (184 )     (803 )     6,694       (715 )     (196 )        
Balance at end of period $ 33,758     $ 33,152     $ 32,429     $ 38,972     $ 39,707          
                           
Asset quality ratios:                          
Nonperforming Non-PCI loans to loans (1)   0.41 %     0.32 %     0.30 %     0.31 %     0.36 %        
Nonperforming assets to assets (1)   0.42 %     0.36 %     0.40 %     0.50 %     0.54 %        
Net loan charge-offs (recoveries) to average loans (3)   -0.02 %     -0.08 %     0.73 %     -0.08 %     -0.02 %        
Allowance for loan losses to loans   0.83 %     0.84 %     0.84 %     1.10 %     1.15 %        
Allowance for loan losses to nonperforming Non-PCI loans (1) (2)   200.67 %     252.54 %     275.80 %     305.43 %     277.60 %        
                           
Allowance for off-balance sheet items:                          
Balance at beginning of period $ 1,184     $ 1,184     $ 1,491     $ 1,475     $ 1,220          
Provision (income) for off-balance sheet items   (49 )     -       (307 )     16       255          
Balance at end of period $ 1,135     $ 1,184     $ 1,184     $ 1,491     $ 1,475          
                           
(1)  Excludes PCI loans                          
(2)  Excludes allowance for loan losses allocated to PCI loans                        
(3)  Annualized                          
                           

Conference Call                             
Management will host a conference call today, July 18, 2017 at 2:00 p.m. PT (5:00 p.m. ET) to discuss these results. This call will also be broadcast live via the internet. Investment professionals and all current and prospective stockholders are invited to access the live call by dialing 1-877-407-9039 before 2:00 p.m. PT, using access code HANMI. To listen to the call online, either live or archived, visit the Investor Relations page of Hanmi’s website at www.hanmi.com.

About Hanmi Financial Corporation
Headquartered in Los Angeles, California, Hanmi Financial Corporation owns Hanmi Bank, which serves multi-ethnic communities through its network of 41 full-service branches and 6 loan production offices in California, Texas, Illinois, Virginia, New Jersey, New York, Colorado, Washington and Georgia. Hanmi Bank specializes in real estate, commercial, SBA and trade finance lending to small and middle market businesses. Additional information is available at www.hanmi.com.

Forward-Looking Statements
This press release contains forward-looking statements, which are included in accordance with the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “should,” “could,” “expects,” “plans,” “intends,” “anticipates,” “believes,” “estimates,” “predicts,” “potential,” or “continue,” or the negative of such terms and other comparable terminology. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. All statements other than statements of historical fact are “forward–looking statements” for purposes of federal and state securities laws, including, but not limited to, statements about anticipated future operating and financial performance, financial position and liquidity, business strategies, regulatory and competitive outlook, investment and expenditure plans, capital and financing needs and availability, plans and objectives of management for future operations, developments regarding our capital plans, strategic alternatives for a possible business combination, merger or sale transaction, and other similar forecasts and statements of expectation and statements of assumption underlying any of the foregoing. These statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to differ from those expressed or implied by the forward-looking statement. These factors include the following: failure to maintain adequate levels of capital and liquidity to support our operations; the effect of potential future supervisory action against us or Hanmi Bank; general economic and business conditions internationally, nationally and in those areas in which we operate; volatility and deterioration in the credit and equity markets; changes in consumer spending, borrowing and savings habits; availability of capital from private and government sources; demographic changes; competition for loans and deposits and failure to attract or retain loans and deposits; fluctuations in interest rates and a decline in the level of our interest rate spread; risks of natural disasters related to our real estate portfolio; risks associated with Small Business Administration loans; failure to attract or retain key employees; changes in governmental regulation, including, but not limited to, any increase in FDIC insurance premiums; ability of Hanmi Bank to make distributions to Hanmi Financial Corporation, which is restricted by certain factors, including Hanmi Bank’s retained earnings, net income, prior distributions made, and certain other financial tests; ability to identify a suitable strategic partner or to consummate a strategic transaction; adequacy of our allowance for loan and lease losses; credit quality and the effect of credit quality on our provision for loan and lease losses and allowance for loan and lease losses; changes in the financial performance and/or condition of our borrowers and the ability of our borrowers to perform under the terms of their loans and other terms of credit agreements; our ability to control expenses; and changes in securities markets. In addition, we set forth certain risks in our reports filed with the U.S. Securities and Exchange Commission, including, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2016, our Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K that we will file hereafter, which could cause actual results to differ from those projected. We undertake no obligation to update such forward-looking statements except as required by law.

 

Hanmi Financial Corporation and Subsidiaries
Consolidated Balance Sheets (Unaudited)
(In thousands)
                     
  June 30,   March 31,   Percentage   June 30,   Percentage  
    2017       2017     Change     2016     Change  
Assets                    
Cash and due from banks $ 138,507     $ 138,592     -0.1 %   $ 156,632     -11.6 %  
Securities available for sale, at fair value   571,846       548,010     4.3 %     636,275     -10.1 %  
Loans held for sale, at the lower of cost or fair value   10,949       8,849     23.7 %     12,833     -14.7 %  
Loans and leases receivable, net of allowance for loan and lease losses   4,039,304       3,910,799     3.3 %     3,409,603     18.5 %  
Accrued interest receivable   11,167       10,774     3.6 %     10,552     5.8 %  
Customers' liability on acceptances   1,481       932     58.9 %     2,456     -39.7 %  
Servicing assets   10,480       10,609     -1.2 %     11,337     -7.6 %  
Premises and equipment, net   26,869       28,350     -5.2 %     29,752     -9.7 %  
Goodwill and other intangible assets, net   12,712       12,797     -0.7 %     1,537     727.1 %  
Federal Home Loan Bank ("FHLB") stock, at cost   16,385       16,385     0.0 %     16,385     0.0 %  
Federal Reserve Bank ("FRB") stock, at cost   -       -     -       14,423     -100.0 %  
Other real estate owned ("OREO"), net   4,321       4,636     -6.8 %     11,846     -63.5 %  
Income tax asset   50,286       40,049     25.6 %     52,161     -3.6 %  
Bank-owned life insurance   49,982       49,722     0.5 %     48,851     2.3 %  
Prepaid expenses and other assets   29,057       31,317     -7.2 %     26,690     8.9 %  
Total assets $    4,973,346     $    4,811,821     3.4 %   $    4,441,333     12.0 %  
                     
Liabilities and Stockholders' Equity                    
Liabilities:                    
Deposits:                    
Noninterest-bearing $ 1,260,929     $ 1,241,272     1.6 %   $ 1,189,528     6.0 %  
Interest-bearing   2,998,244       2,841,893     5.5 %     2,399,761     24.9 %  
Total deposits   4,259,173       4,083,165     4.3 %     3,589,289     18.7 %  
Accrued interest payable   3,432       2,619     31.0 %     3,107     10.5 %  
Bank's liability on acceptances   1,481       932     58.9 %     2,456     -39.7 %  
FHLB advances   20,000       50,000     -60.0 %     280,000     -92.9 %  
Subordinated debentures   117,011       116,795     0.2 %     18,821     521.7 %  
Accrued expenses and other liabilities   22,109       18,768     17.8 %     22,475     -1.6 %  
Total liabilities     4,423,206         4,272,279     3.5 %       3,916,148     12.9 %  
                     
Stockholders' equity:                    
Common stock   33       33     0.0 %     33     0.0 %  
Additional paid-in capital   563,948       563,151     0.1 %     560,089     0.7 %  
Accumulated other comprehensive income   137       (1,603 )   -108.5 %     9,121     -98.5 %  
Retained earnings   57,717       49,395     16.8 %     26,396     118.7 %  
Less treasury stock   (71,695 )     (71,434 )   0.4 %     (70,454 )   1.8 %  
Total stockholders' equity     550,140         539,542     2.0 %       525,185     4.8 %  
Total liabilities and stockholders' equity $    4,973,346     $    4,811,821     3.4 %   $    4,441,333     12.0 %  
                     

Hanmi Financial Corporation and Subsidiaries
Consolidated Statements of Income (Unaudited)
(In thousands, except share and per share data)
                     
   Three Months Ended   
  June 30,   March 31,   Percentage   June 30,   Percentage  
    2017       2017     Change     2016     Change  
Interest and dividend income:                    
Interest and fees on loans and leases $ 47,971     $ 45,378     5.7 %   $ 40,645     18.0 %  
Interest on securities   2,949       2,520     17.0 %     2,886     2.2 %  
Dividends on FRB and FHLB stock   283       374     -24.3 %     579     -51.1 %  
Interest on deposits in other banks   123       77     59.7 %     49     151.0 %  
Total interest and dividend income   51,326       48,349     6.2 %     44,159     16.2 %  
Interest expense:                    
Interest on deposits   6,463       5,154     25.4 %     3,684     75.4 %  
Interest on FHLB advances   49       468     -89.5 %     299     -83.6 %  
Interest on subordinated debentures   1,636       373     338.6 %     196     734.7 %  
Total interest expense   8,148       5,995     35.9 %     4,179     95.0 %  
Net interest income before provision for loan and lease losses   43,178       42,354     1.9 %     39,980     8.0 %  
Loan and lease loss provision (income)   422       (80 )   -627.5 %     (1,515 )   -127.9 %  
Net interest income after provision for loan and lease losses   42,756       42,434     0.8 %     41,495     3.0 %  
Noninterest income:                    
Service charges on deposit accounts   2,461       2,528     -2.7 %     2,898     -15.1 %  
Trade finance and other service charges and fees   1,269       1,047     21.2 %     1,064     19.3 %  
Gain on sale of Small Business Administration ("SBA") loans   2,668       1,464     82.2 %     1,774     50.4 %  
Disposition gains on Purchased Credit Impaired ("PCI") loans   540       183     195.1 %     1,963     -72.5 %  
Net gain on sales of securities   938       269     248.7 %     -     -    
Other operating income   1,826       1,726     5.8 %     1,674     9.1 %  
Total noninterest income   9,702       7,217     34.4 %     9,373     3.5 %  
Noninterest expense:                    
Salaries and employee benefits   16,623       17,104     -2.8 %     16,061     3.5 %  
Occupancy and equipment   3,878       3,982     -2.6 %     3,938     -1.5 %  
Data processing   1,738       1,631     6.6 %     1,454     19.5 %  
Professional fees   1,554       1,148     35.4 %     1,509     3.0 %  
Supplies and communications   745       635     17.3 %     709     5.1 %  
Advertising and promotion   1,015       802     26.6 %     1,094     -7.2 %  
OREO expense (income)   519       (101 )   -613.9 %     183     183.6 %  
Merger and integration costs   (9 )     (31 )   -71.0 %     -     -    
Other operating expenses   2,881       2,070     39.2 %     2,915     -1.2 %  
Total noninterest expense   28,944       27,240     6.3 %     27,863     3.9 %  
Income before provision for income taxes   23,514       22,411     4.9 %     23,005     2.2 %  
Income tax expense   9,057       8,628     5.0 %     8,857     2.3 %  
Net income $    14,457     $    13,783     4.9 %   $    14,148     2.2 %  
                       
Basic earnings per share: $ 0.45     $ 0.43         $ 0.44        
Diluted earnings per share: $ 0.45     $ 0.43         $ 0.44        
                     
Weighted-average shares outstanding:                    
Basic   32,078,038       32,001,766           31,882,489        
Diluted   32,243,034       32,191,458           32,029,910        
Common shares outstanding   32,393,856       32,392,580           32,260,320        
                     
                     
Hanmi Financial Corporation and Subsidiaries                    
Consolidated Statements of Income (Unaudited)                    
(In thousands, except share and per share data)                    
   Six Months Ended           
  June 30,   June 30,   Percentage          
    2017       2016     Change          
Interest and dividend income:                    
Interest and fees on loans and leases $ 93,349     $ 79,712     17.1 %          
Interest on securities   5,468       5,903     -7.4 %          
Dividends on FRB and FHLB stock   657       1,121     -41.4 %          
Interest on deposits in other banks   200       97     106.2 %          
Total interest and dividend income   99,674       86,833     14.8 %          
Interest expense:                    
Interest on deposits   11,617       7,410     56.8 %          
Interest on FHLB advances   517       494     4.7 %          
Interest on subordinated debentures   2,009       379     430.1 %          
Interest on Other Borrowings   -       -     -            
Total interest expense   14,143       8,283     70.7 %          
Net interest income before provision for loan and leas losses   85,531       78,550     8.9 %          
Loan and lease loss provision (income)   342       (3,040 )   -111.3 %          
Net interest income after provision for loan and lease losses   85,189       81,590     4.4 %          
Noninterest income:                    
Service charges on deposit accounts   4,989       5,899     -15.4 %          
Trade finance and other service charges and fees   2,316       2,109     9.8 %          
Gain on sale of Small Business Administration ("SBA") loans   4,132       2,632     57.0 %          
Net gain on sales of securities   1,206       -     -            
Disposition gains on Purchased Credit Impaired ("PCI") loans   723       2,622     -72.4 %          
Other operating income   3,551       3,072     15.6 %          
Total noninterest income   16,917       16,334     3.6 %          
Noninterest expense:                    
Salaries and employee benefits   33,727       31,759     6.2 %          
Occupancy and equipment   7,861       7,434     5.7 %          
Data processing   3,369       2,889     16.6 %          
Professional fees   2,702       2,974     -9.1 %          
Supplies and communications   1,379       1,445     -4.6 %          
Advertising and promotion   1,817       1,616     12.4 %          
OREO expense (income)   418       648     -35.5 %          
Merger and integration costs   (40 )     -     -            
Other operating expenses   4,948       5,167     -4.2 %          
Total noninterest expense   56,181       53,932     4.2 %          
Income before provision for income taxes   45,925       43,992     4.4 %          
Income tax expense   17,685       15,040     17.6 %          
Net income $    28,240     $    28,952     -2.5 %          
                       
Basic earnings per share: $ 0.88     $ 0.90                
Diluted earnings per share $ 0.87     $ 0.90                
                     
Weighted-average shares outstanding:                    
Basic   32,040,113       31,864,427                
Diluted   32,216,671       32,001,163                
Common shares outstanding   32,393,856       32,260,320                
                     

 

Hanmi Financial Corporation and Subsidiaries
Average Balance, Average Yield Earned, and Average Rate Paid (Unaudited)
(In thousands, except ratios)
                         
  Three Months Ended  
  June 30, 2017   March 31, 2017   June 30, 2016  
    Interest Average     Interest Average     Interest Average  
  Average Income / Yield /   Average Income / Yield /   Average Income / Yield /  
  Balance Expense Rate   Balance Expense Rate   Balance Expense Rate  
Assets                        
Interest-earning assets:                        
Loans (1) $ 3,951,934   $ 47,971 4.87 %   $ 3,881,686   $ 45,378 4.74 %   $ 3,328,416   $ 40,645 4.91 %  
Securities (2)   585,384     3,444 2.35 %     526,549     3,026 2.30 %     657,756     3,397 2.07 %  
FRB and FHLB stock   16,385     283 6.93 %     16,385     374 9.26 %     30,808     579 7.52 %  
Interest-bearing deposits in other banks   47,402     123 1.04 %     38,600     77 0.81 %     38,598     49 0.51 %  
Total interest-earning assets   4,601,105     51,821 4.52 %     4,463,220     48,855 4.44 %     4,055,578     44,670 4.43 %  
                         
Noninterest-earning assets:                        
Cash and due from banks   116,750           117,802           114,247        
Allowance for loan losses   (33,540 )         (32,842 )         (41,483 )      
Other assets   191,158           190,041           197,158        
Total noninterest-earning assets   274,368           275,001           269,922        
                         
Total assets $   4,875,473         $   4,738,221         $   4,325,500        
                         
Liabilities and Stockholders' Equity                        
Interest-bearing liabilities:                        
Deposits:                        
Demand: interest-bearing $ 93,873   $ 18 0.08 %   $ 97,602   $ 19 0.08 %   $ 96,397   $ 19 0.08 %  
Money market and savings   1,532,733     3,224 0.84 %     1,406,903     2,666 0.77 %     944,355     1,212 0.52 %  
Time deposits   1,320,005     3,221 0.98 %     1,173,184     2,469 0.85 %     1,268,127     2,453 0.78 %  
Total interest-bearing deposits   2,946,611     6,463 0.88 %     2,677,689     5,154 0.78 %     2,308,879     3,684 0.64 %  
FHLB advances   20,000     49 0.98 %     270,500     468 0.70 %     278,077     299 0.43 %  
Subordinated debentures   116,850     1,636 5.59 %     30,950     373 4.82 %     18,781     196 4.20 %  
Total interest-bearing liabilities   3,083,461     8,148 1.06 %     2,979,139     5,995 0.82 %     2,605,737     4,179 0.65 %  
                         
Noninterest-bearing liabilities:                        
Demand deposits: noninterest-bearing   1,219,876           1,196,151           1,170,486        
Other liabilities   27,853           28,658           31,262        
                         
Stockholders' equity   544,283           534,273           518,015        
                         
Total liabilities and stockholders' equity $   4,875,473         $   4,738,221         $   4,325,500        
                         
Net interest income   $    43,673       $    42,860       $   40,491    
                         
Cost of deposits     0.62 %       0.54 %       0.43 %  
Net interest spread     3.46 %       3.62 %       3.78 %  
Net interest margin     3.81 %       3.89 %       4.02 %  
                         
                         
                         
(1)  Includes loans held for sale                        
(2)  Amounts calculated on a fully taxable equivalent basis using the current statutory federal tax rate.            
                         
Hanmi Financial Corporation and Subsidiaries
Average Balance, Average Yield Earned, and Average Rate Paid (Unaudited)
(In thousands, except ratios)
                         
  Six Months Ended          
  June 30, 2017   June 30, 2016          
    Interest Average     Interest Average          
  Average Income / Yield /   Average Income / Yield /          
  Balance Expense Rate   Balance Expense Rate          
Assets                        
Interest-earning assets:                        
Loans (1) $ 3,917,004   $ 93,349 4.81 %   $ 3,260,625   $ 79,712 4.92 %          
Securities (2)   556,129     6,468 2.33 %     670,063     6,926 1.03 %          
FRB and FHLB stock   16,385     657 8.09 %     30,652     1,121 3.66 %          
Interest-bearing deposits in other banks   43,026     200 0.94 %     41,343     97 0.47 %          
Total interest-earning assets   4,532,544     100,674 4.48 %     4,002,683     87,856 4.41 %          
                         
Noninterest-earning assets:                        
Cash and due from banks   117,273           114,455                
Allowance for loan losses   (33,193 )         (42,001 )              
Other assets   190,602           198,151                
Total noninterest-earning assets   274,682           270,605                
                         
Total assets $   4,807,226         $   4,273,288                
                         
Liabilities and Stockholders' Equity                        
Interest-bearing liabilities:                        
Deposits:                        
Demand: interest-bearing $ 95,727   $ 38 0.08 %   $ 95,979   $ 38 0.08 %          
Money market and savings   1,470,165     5,890 0.81 %     923,196     2,295 0.50 %          
Time deposits   1,247,000     5,689 0.92 %     1,307,347     5,077 0.78 %          
Total interest-bearing deposits   2,812,892     11,617 0.83 %     2,326,522     7,410 0.64 %          
FHLB advances   144,558     517 0.72 %     229,973     494 0.43 %          
Subordinated debentures   74,137     2,009 5.41 %     18,751     379 4.06 %          
Total interest-bearing liabilities   3,031,587     14,143 0.94 %     2,575,246     8,283 0.65 %          
                         
Noninterest-bearing liabilities:                        
Demand deposits: noninterest-bearing   1,208,079           1,154,654                
Other liabilities   28,255           34,646                
                         
Stockholders' equity   539,305           508,742                
                         
Total liabilities and stockholders' equity $   4,807,226         $   4,273,288                
                         
Net interest income   $    86,531       $    79,573            
                         
Cost of deposits     0.58 %       0.43 %          
Net interest spread     3.54 %       3.76 %          
Net interest margin     3.85 %       4.00 %          
                         
                         
(1)  Includes loans held for sale                        
(2)  Amounts calculated on a fully taxable equivalent basis using the current statutory federal tax rate.            
             

Non-GAAP Financial Measures

Acquisition Accounting

Core loan yield, core deposit costs, net interest income and net interest margin excluding acquisition accounting are supplemental financial information determined by a method other than in accordance with U.S. generally accepted accounting principles (“GAAP”). This non-GAAP measure is used by management in the analysis of Hanmi’s results of operations. The calculation of these measures is illustrated below.  Management believes the presentation of this financial measure excluding the impact of these items provides useful supplemental information that is essential to a proper understanding of the results of Hanmi. This disclosure should not be viewed as a substitution for results determined in accordance with GAAP, nor is it necessarily comparable to non-GAAP performance measures that may be presented by other companies.

The following table reconciles this non-GAAP performance measure to the GAAP performance measure for the periods indicated:

   For the Three Months Ended                     
  June 30,   March 31,   December 31,   September 30,   June 30,                    
    2017     2017     2016     2016     2016                      
Core loan yield   4.82 %   4.68 %     4.63 %   4.63 %     4.78 %                    
Accretion of discount on purchased loans   0.05 %   0.06 %     0.09 %   0.08 %     0.13 %                    
As reported   4.87 %   4.74 %     4.72 %   4.71 %     4.91 %                    
                                       
Core deposit cost   0.63 %   0.55 %     0.54 %   0.54 %     0.52 %                    
Accretion of time deposits premium   0.01 %   0.01 %     0.04 %   0.07 %     0.09 %                    
As reported   0.62 %   0.54 %     0.50 %   0.47 %     0.43 %                    
                                       
 
  For the Three Months Ended
  June 30, 2017   March 31, 2017   December 31, 2016   September 30, 2016   June 30, 2016
   Amount     Rate     Amount     Rate     Amount     Rate     Amount     Rate     Amount     Rate 
Net interest income and net interest margin excluding acquisition accounting (1) $    43,129     3.76 %   $    42,230     3.84 %   $    41,489     3.86 %   $    38,874     3.75 %   $    38,671     3.84 %
Accretion of discount on Non-PCI loans   457     0.04 %     527     0.05 %     781     0.07 %     648     0.06 %     994     0.10 %
Accretion of discount on PCI loans   52     0.00 %     54     0.00 %     78     0.01 %     26     0.00 %     97     0.01 %
Accretion of time deposits premium   116     0.01 %     126     0.01 %     314     0.03 %     610     0.06 %     791     0.08 %
Amortization of subordinated debentures discount   (81 )   -0.01 %     (77 )   -0.01 %     (90 )   -0.01 %     (67 )   -0.01 %     (62 )   -0.01 %
Net impact   544     0.05 %     630     0.05 %     1,083     0.10 %     1,217     0.11 %     1,820     0.18 %
As reported, on a fully taxable equivalent basis (1) $ 43,673     3.81 %   $    42,860     3.89 %   $ 42,572     3.96 %   $ 40,091     3.86 %   $ 40,491     4.02 %
(1)  Amounts calculated on a fully taxable equivalent basis using the current statutory federal tax rate:  rates may not sum due to rounding.                    
                                       


Tangible Common Equity to Tangible Assets Ratio

Tangible common equity to tangible assets ratio is supplemental financial information determined by a method other than in accordance with U.S. generally accepted accounting principles (“GAAP”). This non-GAAP measure is used by management in the analysis of Hanmi’s capital strength. Tangible equity is calculated by subtracting goodwill and other intangible assets from stockholders’ equity. Banking and financial institution regulators also exclude goodwill and other intangible assets from stockholders’ equity when assessing the capital adequacy of a financial institution. Management believes the presentation of this financial measure excluding the impact of these items provides useful supplemental information that is essential to a proper understanding of the capital strength of Hanmi. This disclosure should not be viewed as a substitution for results determined in accordance with GAAP, nor is it necessarily comparable to non-GAAP performance measures that may be presented by other companies.

The following table reconciles this non-GAAP performance measure to the GAAP performance measure for the periods indicated:

Tangible Common Equity to Tangible Assets Ratio (Unaudited)
(In thousands, except share, per share data and ratios)
                     
                     
  June 30,   March 31,   December 31,   September 30,   June 30,  
Hanmi Financial Corporation   2017       2017       2016       2016       2016    
Assets $   4,973,346     $   4,811,821     $   4,701,346     $   4,402,180     $   4,441,333    
Less goodwill     (11,031 )       (11,031 )       (11,031 )       -          -     
Less other intangible assets,net     (1,681 )       (1,766 )       (1,858 )       (1,456 )       (1,537 )  
Tangible assets $   4,960,634     $   4,799,024     $   4,688,457     $   4,400,724     $   4,439,796    
                     
Common Stockholders' equity $   550,140     $   539,542     $   531,025     $   531,198     $   525,185    
Less goodwill     (11,031 )       (11,031 )       (11,031 )       -         -    
Less other intangible assets     (1,681 )       (1,766 )       (1,858 )       (1,456 )       (1,537 )  
Tangible Common stockholders' equity $   537,428     $   526,745     $   518,136     $   529,742     $   523,648    
                     
Common Stockholders' equity to assets   11.06 %     11.21 %     11.30 %     12.07 %     11.82 %  
Tangible common equity to tangible assets   10.83 %     10.98 %     11.05 %     12.04 %     11.79 %  
                     
Common shares outstanding     32,393,856         32,392,580         32,330,747         32,252,774         32,260,320    
Tangible common equity per common share $   16.59     $   16.26     $   16.03     $   16.42     $   16.23    
                      
Investor Contacts:
Romolo (Ron) Santarosa
Senior Executive Vice President & Chief Financial Officer
213-427-5636

Richard Pimentel
Senior Vice President & Corporate Finance Officer
213-427-3191

Lasse Glassen
Investor Relations
Addo Investor Relations
310-829-5400

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Source: Hanmi Bank

Released July 18, 2017