Hanmi Financial Earns $8.0 Million, or $0.05 per Share in 2Q11; Continues Profitability for Third Consecutive Quarter

LOS ANGELES, July 21, 2011 (GLOBE NEWSWIRE) -- Hanmi Financial Corporation (Nasdaq:HAFC), the holding company for Hanmi Bank, today reported it earned $8.0 million, or $0.05 per diluted share, for the second quarter of 2011. These results include a $2.2 million non-recurring expense related to its unconsummated capital raising efforts which involve Woori Finance Holdings, Ltd. and a planned equity offering that it declined to complete. Hanmi's performance marks the third consecutive profitable quarter following the $10.4 million, or $0.07 per diluted share, earned in the first quarter of 2011 and $5.3 million, or $0.04 per diluted share, earned in the fourth quarter of 2010. In the first six months of 2011, Hanmi earned $18.4 million, or $0.12 per diluted share, compared to a loss of $78.7 million, or $1.54 per share in the first six months of 2010.

"Our second quarter further established the recovery of our core franchise with continued profitability and solid investor interest in the equity offering we previously initiated," said Jay S. Yoo, President and Chief Executive Officer. "Although the offering was fully subscribed, with excess demand, our Board of Directors was not satisfied with the pricing offered and did not believe it to be in the best interest of our shareholders to complete the offering at that time. Our capital ratios, including the Bank's tangible equity ratio, exceed all regulatory requirements, and our continuing profitability and the gradual improvement of our asset quality give us the flexibility to wait for more favorable market conditions."

Second Quarter and First Half 2011 Highlights (at or for the period ended June 30, 2011)

 
  Hanmi's second quarter net income of $8.0 million, or $0.05 per diluted share, was the third consecutive quarterly profit and brought earnings for the first half of 2011 to $18.4 million, or $0.12 per diluted share. These results include a one-time $2.2 million expense related to unconsummated capital raising efforts.
 
  Non-performing assets (NPAs) declined 40% year-over-year to $159.8 million, or 5.90% of total assets, from $266.2 million, or 9.13% of total assets in the second quarter of 2010. NPAs increased by $5.5 million from the immediately preceding quarter. The ratio of non-performing loans (NPLs) current on payments to total NPLs was 48.6% compared to 35.2% at March 31, 2011, and 23.9% at June 30, 2010.
 
  Delinquent loans in accrual status, which are 30 to 89 days past due, were $15.6 million, down from $20.7 million in the preceding quarter and down from $21.7 million a year ago, reflecting the positive trend of lesser loans migrating to delinquent status.
 
  There was no provision for credit losses recorded during the second quarter and first-half of 2011. Improving credit quality of the loan portfolio and reductions in net charge-offs allowed for the reduction of the allowance for loan losses this quarter. Total net charge-offs declined to $16.5 million in the second quarter of 2011 from $21.6 million in the first quarter of 2011, and down from $38.9 million in the second quarter of 2010. For the first half of 2011, net charge-offs totaled $38.1 million, down from $65.3 million in the first six months of 2010.
 
  The ratio of the loan loss allowance to gross loans stood at 5.16%, compared to 7.05% a year ago.
 
  Total assets were $2.71 billion, a decline of $168.8 million, or 5.9%, on a sequential quarter basis.
 
  Due to the success of recent marketing initiatives together with a reinvigorated loan production, core deposits, which are total deposits less time deposits greater than $100,000, increased to $1.52 billion, up $66.3 million, or 4.6%, on a sequential quarter basis. Core deposits as of June 30, 2011, increased by $61.4 million when compared to the prior year period. Total deposits decreased slightly by $32.6 million, or 1.3%, to $2.40 billion during the second quarter from $2.43 billion for the preceding quarter.
 
  Net interest margin (NIM) was 3.65% in the second quarter of 2011, down 1 basis point from 3.66% in the preceding quarter and up 9 basis points from 3.56% in the second quarter of 2010. Year-to-date NIM was up 4 basis points to 3.66% from 3.62% in the first six months of 2010.
 
  The Bank's tangible equity to tangible assets and total risk-based capital to assets were at 10.33% and 14.02%, respectively, at June 30, 2011.

Capital Management

At June 30, 2011, the Bank's total risk-based capital ratio was 14.02% compared to 13.00% at March 31, 2011, and 7.35% at June 30, 2010. Tier 1 risk-based capital ratio at June 30, 2011, was 12.72% compared to 11.70% at March 31, 2011, and 6.02% at June 30, 2010. Tier 1 leverage ratio at June 30, 2011, was 9.70% compared to 9.08% at March 31, 2011, and 4.99% at June 30, 2010. The Bank's tangible common equity to tangible assets ratio at June 30, 2011, was 10.33% compared to 9.10% at March 31, 2011, and 5.20% at June 30, 2010. All of the Bank's capital ratios were above the minimum regulatory standards for being considered to be "well-capitalized" for regulatory purposes. The Bank's tangible common equity to tangible assets ratio at June 30, 2011, now exceeds the 9.5% requirement set forth in the Final Order issued to Hanmi Bank by the California Department of Financial Institutions.

Asset Quality

NPLs increased to $158.5 million at June 30, 2011, up 4.5% from $151.7 million at March 31, 2011, and are down 34.5% from $242.1 million at June 30, 2010. Of the total NPLs, non-performers current on payments were $76.9 million, or 48.6% compared to $53.4 million or 35.2% at March 31, 2011, and $57.8 million or 23.9% at June 30, 2010. In addition, $22.6 million, or 14.3% of the total NPLs, were recorded at the lower of cost or fair value as they were classified as held for sale. Out of the total NPLs, $13.4 million is guaranteed by the Small Business Administration (SBA) and the State of California.

The following table shows NPLs by loan category:

Total Non-Performing Loans                                                                                                                                                                 
                 (Dollars in Thousands)          6/30/2011     % of
    Total NPL          3/31/2011     % of
    Total NPL          12/31/2010     % of
    Total NPL          6/30/2010     % of
    Total NPL
                  Real Estate Loans:                                                                                                                                                                  
                  Commercial Property                                                                                                                                                                  
                               Retail             14,335                   9.0%             8,669                   5.7%             10,998                   6.5%            24,459                  10.1%
                                 Land             25,184                  15.9%            22,523                  14.8%             26,808                  15.9%            35,806                  14.8%
                                Other              3,672                   2.3%             5,108                   3.4%             10,131                   6.0%            17,601                   7.3%
                         Construction             12,298                   7.8%            23,421                  15.4%             19,097                  11.3%             9,823                   4.1%
                 Residential Property              1,726                   1.1%             2,014                   1.3%              1,926                   1.1%             2,612                   1.1%
                                                                                                                                                                                                       
      Commercial & Industrial Loans:                                                                                                                                                                  
                      Commercial Term                                                                                                                                                                  
                            Unsecured              8,389                   5.3%            10,435                   6.9%             17,065                  10.1%            22,283                   9.2%
               Secured by Real Estate             54,754                  34.5%            45,763                  30.2%             45,946                  27.2%            93,826                  38.7%
           Commercial Lines of Credit              2,905                   1.8%             2,169                   1.4%              2,798                   1.7%             4,038                   1.7%
                                  SBA             31,163                  19.7%            30,539                  20.1%             33,085                  19.6%            30,601                  12.6%
                  International Loans              3,243                   2.0%               123                   0.1%                127                   0.1%               566                   0.2%
                                                                                                                                                                                                       
                       Consumer Loans                824                   0.5%               966                   0.6%              1,047                   0.6%               518                   0.2%
                          TOTAL NPL (1)           158,493                 100.0%           151,730                 100.0%            169,028                 100.0%           242,133                 100.0%
                                                                                                                                                                                                       
                     (1) Includes loans held for sale of $22.6 million, $26.9 million, $26.6 million and $23.7 million as of June 30, 2011, March 31, 2011, December 31, 2010 and June 30, 2010, respectively.

"While NPLs did not decline as anticipated in the second quarter, our top priority is to work down NPLs through proactive note sales and to move delinquent loans through the collection process," said J.H. Son, Executive Vice President and Chief Credit Officer. "The market conditions for note sales were temporarily softened in the second quarter. Consequently, we did not meet our target NPL sales in the quarter. With expectations that the NPL market will improve in the coming quarters, we plan to pursue a more intense note sales strategy."

Sale of OREO continued during the second quarter of 2011, with five properties valued at $2.4 million sold for net proceeds of $1.8 million, resulting in a $462,000 net loss. In the first half of 2011, Hanmi sold eight properties valued at $4.4 million for net proceeds of $3.6 million resulting in a net loss of $681,000. OREO totaled $1.3 million at June 30, 2011, down from $2.6 million at March 31, 2011, and down from $24.1 million at June 30, 2010.

"The number and severity of loans that are just beginning to show stress, specifically those less than 90 days delinquent, continues to decline," Son said. Delinquent loans on accrual status, which are not included in total NPLs, decreased to $15.6 million, or 0.74% of gross loans at June 30, 2011, down from $20.7 million, or 0.95% of gross loans at March 31, 2011.

The following table shows delinquent loans on accrual status by loan category: 

Delinquent Loans on Accrual Status                                                                                                                                                   
                   (Dollars in Thousands)          6/30/2011     % of
    Total          3/31/2011     % of
    Total          12/31/2010     % of
    Total          6/30/2010     % of
    Total
                     Real Estate Loans:                                                                                                                                                  
                    Commercial Property                                                                                                                                                  
                                 Retail                                                    295               1.4%                                                                         
                                   Land                                                  1,000               4.8%                                                                         
                                  Other              4,082              26.1%             2,247              10.8%                                                  3,020              13.9%
                           Construction                                                                                       4,894              22.8%                                    
                   Residential Property              2,778              17.8%             2,069              10.0%                522               2.4%             1,708               7.9%
                                                                                                                                                                                         
        Commercial & Industrial Loans:                                                                                                                                                  
                        Commercial Term                                                                                                                                                  
                              Unsecured              2,079              13.3%             3,142              15.2%              3,620              16.9%             5,373              24.8%
                 Secured by Real Estate              4,625              29.6%             5,026              24.3%              7,251              33.8%             8,692              40.1%
             Commercial Lines of Credit                                                  1,457               7.0%                160               0.7%                50               0.2%
                                    SBA              1,412               9.0%             5,295              25.6%              4,381              20.4%             2,409              11.1%
                    International Loans                 99               0.6%                                                                                                             
                                                                                                                                                                                         
                         Consumer Loans                569               3.6%               180               0.9%                629               2.9%               450               2.1%
                                TOTAL (1)            15,644             100.0%            20,711             100.0%             21,457             100.0%            21,702             100.0%
                                                                                                                                                                                         
                               (1) Includes loans held for sale of $774,000 as of March 31, 2011.                                                                                           

The following table shows Hanmi's credit quality trends since the second quarter of 2007: 

Credit Quality Trends (Dollars in Thousands)                                                                                                                                                              
                   Provision for
    Credit Losses     Net Charge-offs      Allowance for Loan
    Losses to Gross
    Loans (%)     30-89 Days Past
    Due to Gross
    Loans(%)     Non-performing
    Assets to Total
    Assets (%)
      6/30/2011                                                  16,501                                                     5.16                                              0.74                                                  5.90
      3/31/2011                                                  21,555                                                     5.79                                              0.95                                                  5.36
     12/31/2010                              5,000               35,249                                                     6.44                                              0.95                                                  5.95
      9/30/2010                             22,000               21,304                                                     7.35                                              1.00                                                  7.25
      6/30/2010                             37,500               38,946                                                     7.06                                              0.87                                                  9.13
      3/31/2010                             57,996               26,393                                                     6.63                                              2.56                                                  9.43
     12/31/2009                             77,000               57,312                                                     5.14                                              1.46                                                  7.76
      9/30/2009                             49,500               29,875                                                     4.19                                              0.96                                                  5.83
      6/30/2009                             23,934               23,597                                                     3.33                                              1.51                                                  5.20
      3/31/2009                             45,953               11,813                                                     3.16                                              1.45                                                  4.04
     12/31/2008                             25,450               18,622                                                     2.11                                              1.23                                                  3.14
      9/30/2008                             13,176               11,831                                                     1.91                                              0.68                                                  3.04
      6/30/2008                             19,229                8,220                                                     1.88                                              0.94                                                  2.91
      3/31/2008                             17,821                7,297                                                     1.60                                              0.73                                                  2.25
     12/31/2007                             20,704               11,628                                                     1.33                                              0.61                                                  1.37
      9/30/2007                              8,464                6,084                                                     1.07                                              0.52                                                  1.12
      6/30/2007                              3,023                2,518                                                     1.05                                              0.52                                                  0.61

One of the factors that have contributed to the improvement of asset quality is the on-going program for loan sales. During the second quarter of 2011, Hanmi sold 21 NPLs valued at $17.0 million for net proceeds of $17.6 million. In the first half of 2011, it sold 39 NPLs valued at $44.4 million with net proceeds of $45.5 million. At June 30, 2011, loans held for sale (LHFS) totaled $44.1 million, a reduction of $3.5 million, or 7.4%, from $47.6 million at March 31, 2011. For the first half of 2011, LHFS increased by $7.2 million, or 30.1%, from $36.6 million to $44.1 million, reflecting efforts to improve asset quality through the disposition of problem assets. 

The following table presents the details of loans held for sale:

Loans Held for Sale                                                                                                                                  
                                                                                                                                                                     
               (Dollars in Thousands)     6/30/2011     3/31/2011       $ Change     % Change     12/31/2010      $ Change     % Change     6/30/2010      $ Change     % Change
                 Real Estate Loans:                                                                                                                                  
                Commercial Property                                                                                                                                  
                             Retail                        295         (295)                                                           8,917      (8,917)      -100.0%
                               Land                                                              1,082      (1,082)        -100%                                      
                              Other           708        3,217       (2,509)       -78.0%         1,177        (469)       -39.8%        5,936      (5,228)       -88.1%
                       Construction                                                              1,406      (1,406)      -100.0%                                      
               Residential Property           266                        266                                                                          266            
                                                                                                                                                                     
     Commercial & Industrial Loans:                                                                                                                                  
                    Commercial Term                                                                                                                                  
                          Unsecured                         65          (65)                                                                                         
             Secured by Real Estate        12,857       24,979      (12,122)       -48.5%        14,893      (2,036)       -13.7%        8,810        4,047        45.9%
                                SBA        30,274       19,093        11,181        58.6%        18,062       12,212        67.6%        6,881       23,393       340.0%
                                TOTAL       44,105       47,649       (3,544)        -7.4%        36,620        7,219        30.1%       30,544       13,561        56.0%

At June 30, 2011, the allowance for loan losses was $109.0 million or 5.16% of gross loans. The ratio of loan loss reserves to loans peaked in September of 2010 at 7.35%, and has steadily declined over the past few quarters as credit metrics improved. The ratio of loan loss allowance to non-performing loans at June 30, 2011, was down to 69% from 73% at June 30, 2010. Second quarter charge-offs, net of recoveries, were $16.5 million, compared to $21.6 million in the first quarter of 2011 and $38.9 million in the second quarter of 2010.

Hanmi did not record a provision for credit losses due to the overall improvement in credit quality and existing high levels of reserves. Of the total $109.0 million of reserves, $250,000 was allocated to cover off-balance sheet items bringing the off-balance sheet reserve total to $2.4 million. The Company recorded a provision for credit losses of $37.5 million and $95.5 million in the second quarter and first half of 2010, respectively.  With the improvement in overall credit metrics, provision expense in relations to loans has been minimal for the past two quarters. This assessment also takes into account many factors, including net loan charge-offs, non-accrual loans, specific reserves, risk-rating migration and changes in the portfolio composition and size.

Balance Sheet

Total assets decreased to $2.71 billion at the end of the second quarter of 2011, down 5.9% from $2.88 billion at March 31, 2011, and down 7.0% from $2.91 billion at June 30, 2010. The second quarter decrease in total assets was attributable to reductions in both investment securities and Federal Home Loan Bank (FHLB) borrowings. The main proceeds from the called bonds of $102.2 million in low yield callable agencies and from the sale of $95.6 million in longer duration bonds were used to pay off the $150 million of FHLB advance that came due in June 2011.

Gross loans, net of deferred loan fees, were $2.11 billion at June 30, 2011, down 2.8% from $2.17 billion at March 31, 2011, and down 15.6% from $2.50 billion at June 30, 2010. Average gross loans, net of deferred loan fees, decreased to $2.14 billion for the second quarter of 2011, down 18.2% from $2.61 billion for the second quarter of 2010, and declined 4.3% from $2.23 billion for the first quarter of 2011. The slight decline in loan balance in the second quarter of 2011 reflects continued progress in reducing the number of problem loans, partially offset by new loans originated and a lower level of charge-offs made in the quarter. 

Average investment securities portfolio more than tripled to $497.1 million for the second quarter of 2011 from $158.5 million for the second quarter of 2010. However, the investment portfolio decreased $148.1 million, or 27.5%, to $391 million at June 30, 2011, from $539.2 million at March 31, 2011. The decline was the direct result of Hanmi's rate risk minimization strategy where longer-duration securities were sold and shorter-duration securities were purchased in anticipation of rising rates. The securities portfolio contains mostly high-quality short and mid-term investments that are selected to provide a relatively stable source of interest income, while maintaining sufficient liquidity. U.S. Government agency bonds, mortgage backed securities and securities collateralized by residential mortgages guaranteed by U.S. Government sponsored entities account for 90% of the securities portfolio. "To minimize interest rate risk, we will continue to invest at the short end of the yield curve," said Yoo. 

Including secured off-balance sheet lines of credit, total available liquidity to Hanmi was $951 million at June 30, 2011, representing 35.1% of total assets and 39.7% of total deposits.

Average deposits decreased by 1.3% to $2.43 billion for the second quarter of 2011 compared to $2.46 billion for the preceding quarter, and decreased 7.3% from $2.62 billion for the second quarter of 2010. The reduction in average deposits was almost entirely due to the successful strategy to reduce time deposits, particularly non-retail deposits, including brokered time deposits and funds raised from rate listing services. 

The improvement in the deposit mix which resulted from our new marketing campaign and renewed loan production efforts, contributed to lower interest costs.  "With our new marketing campaign and proactive loan production efforts, we have gotten off to a great start in rebuilding our core deposit base.  Core deposits now account for 49.9% of total deposits, up from, 44.2% a year ago, with many of our former customers now returning to bank with us," said Yoo.

Total deposits decreased by 1.3% from the preceding quarter and decreased 6.9% year-over-year. Both the quarterly and annual decline in total deposits was primarily due to reductions in time deposits over $100,000, including a $98.9 million, or 10.1% decrease for the second quarter and $238.1 million, or 21.3% decrease for the year. Total deposits were $2.40 billion at June 30, 2011, compared to $2.43 billion at March 31, 2011, and $2.58 billion at June 30, 2010. There are no brokered deposits in the deposit mix at quarter-end.

Results of Operations

Net interest income, before the provision for credit losses, totaled $25.5 million for the second quarter of 2011, and $51.6 million for the first six months of 2011, down 2.4% in the quarter and 3.8% year over year. Interest and dividend income was down 3.7% in the second quarter of 2011 while interest expense fell 8.0%. Year to date, interest and dividend income was down 10.4% and interest expense fell 27.6%.

The average yield on the loan portfolio improved 19 basis points to 5.49% in the second quarter of 2011 compared to 5.30% in the second quarter of 2010, and was down 12 basis points from 5.61% in the first quarter of 2011. The yield decline in the second quarter of 2011 compared to the preceding quarter was due to increases in interest reversals on non-accrual loans and decreases in recoveries on loans moving out of non-accrual status. The average yield on loans for the first six months of 2011 was up 21 basis points to 5.55% from 5.34% for the first six months of 2010.  

The cost of average interest-bearing deposits in the second quarter of 2011 was down 9 basis points to 1.35% from 1.44% in the preceding quarter and down 37 basis points from 1.72% in the second quarter of 2010. Year-to-date, the cost of deposits was down 40 basis points to 1.40% from 1.80% for the first six months of 2010. As a result, NIM of 3.65% was almost flat in the second quarter of 2011 compared to 3.66% in the first quarter of 2011, and was up 9 basis points from 3.56% in the second quarter of 2010. For the first six months of 2011, NIM was up 4 basis points to 3.66% from 3.62% for the first six months of 2010. 

Non-interest income in the second quarter of 2011 was $6.0 million, up 9.2% from $5.5 million in the first quarter of 2011, and down 9.9% from $6.7 million in the second quarter of 2010. For the first six months of 2011, non-interest income was down 15.8% to $11.5 million from $13.7 million for the first six months of 2010. The year-over-year decrease in non-interest income is due to decreases in service charges on deposit accounts and net gains on sales of loans and securities. Service charges on deposit accounts decreased to $6.4 million for the first half of 2011 compared to $7.3 million for the first half of 2010, reflecting a decrease in NSF service charges, due to better balance management by customers and regulatory reforms on these fees. For the first half of 2011, Hanmi recognized $2.9 million valuation adjustment on LHFS, the majority of which was offset by $2.5 million gains from the sales of LHFS. The net amount of $415,000 was recorded as net loss on sales of loans. For the first half of 2011, Hanmi posted a net loss on sales of investment securities of $70,000 compared to a gain of $105,000 in the first half of 2010. 

Non-interest expense in the second quarter of 2011 increased to $22.9 million, up 8.7% from $21.1 million in the preceding quarter and down 7.6% from $24.8 million in the second quarter of 2010. For the first six months of 2011, non-interest expense decreased 13.8% to $43.9 million from $51.0 million in the first six months of 2010. The notable year-over-year improvements were primarily attributable to lower OREO expenses, FDIC deposit insurance assessments and other regulatory costs. These savings were partially offset by the $2.2 million in expenses associated with the unconsummated capital raising efforts. 

Conference Call Information

Management will host a conference call today at 1:30 p.m. Pacific Time (4:30 p.m. ET) to discuss these results. This call will also be broadcast live via the internet. Investment professionals and all current and prospective shareholders are invited to access the live call by dialing (857) 350-1684 at 1:30 p.m. Pacific Time, 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. Shortly after the call concludes, the replay will also be available at (617) 801-6888, using access code #15398023 where it will be archived until August 11, 2011.

About Hanmi Financial Corporation

Headquartered in Los Angeles, Hanmi Bank, a wholly-owned subsidiary of Hanmi Financial Corporation, provides services to the multi-ethnic communities of California, with 27 full-service offices in Los Angeles, Orange, San Bernardino, San Francisco, Santa Clara and San Diego counties, and a loan production office in Washington State. Hanmi Bank specializes in commercial, SBA and trade finance lending, and is a recognized community leader. Hanmi Bank's mission is to provide a full range of quality products and premier services to its customers and to maximize shareholder value. 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 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: inability to continue as a going concern; inability to raise additional capital on acceptable terms or at all; failure to maintain adequate levels of capital and liquidity to support our operations; the effect of regulatory orders we have entered into and 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 to receive regulatory approval for Hanmi Bank to declare dividends to Hanmi Financial; adequacy of our allowance for loan losses, credit quality and the effect of credit quality on our provision for credit losses and allowance for loan 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 successfully integrate acquisitions we may make; 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 ("SEC"), including, in particular Item 1A of our Form 10K for the year ended March 31, 2011, as well as current and periodic reports filed with the U.S. Securities and Exchange Commission 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                                                                                                    
                                      CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)                                                                                 
                         (Dollars in Thousands)                                                                                                                       
                                                                                                                                                                     
                                                       June 30,         March 31,            %       December 31,            %          June 30,            % 
                                                           2011              2011       Change               2010       Change              2010       Change 
                                         ASSETS                                                                                                                       
                                                                                                                                                                     
                        Cash and Due from Banks          $ 67,166          $ 67,507        (0.5)%           $ 60,983        10.1 %          $ 60,034        11.9 %
       Interest-Bearing Deposits in Other Banks            131,757             83,354        58.1 %             158,737       (17.0)%            170,711       (22.8)%
                           Federal Funds Sold                 —             19,500         —               30,000         —              20,000         — 
                                                                                                                                                                     
                      Cash and Cash Equivalents            198,923            170,361        16.8 %             249,720       (20.3)%            250,745       (20.7)%
                                                                                                                                                                     
                          Investment Securities            391,045            539,194       (27.5)%             413,963        (5.5)%            191,094         — 
                                                                                                                                                                     
                                         Loans:                                                                                                                       
         Gross Loans, Net of Deferred Loan Fees          2,112,698          2,173,415        (2.8)%           2,267,126        (6.8)%          2,503,426       (15.6)%
                      Allowance for Loan Losses          (109,029)          (125,780)       (13.3)%           (146,059)       (25.4)%          (176,667)       (38.3)%
                                                                                                                                                                     
                          Loans Receivable, Net          2,003,669          2,047,635        (2.1)%           2,121,067        (5.5)%          2,326,759       (13.9)%
                                                                                                                                                                     
                    Accrued Interest Receivable              7,512              8,796       (14.6)%               8,048        (6.7)%              7,802        (3.7)%
                    Premises and Equipment, Net             16,869             17,165        (1.7)%              17,599        (4.1)%             17,917        (5.8)%
                   Other Real Estate Owned, Net              1,340              2,642       (49.3)%               4,089       (67.2)%             24,064       (94.4)%
              Due from Customers on Acceptances              1,629                805         —                  711         —               1,072        52.0 %
                               Servicing Assets              2,545              2,698        (5.7)%               2,890       (11.9)%              3,356       (24.2)%
                   Other Intangible Assets, Net              1,825              2,015        (9.4)%               2,233       (18.3)%              2,754       (33.7)%
      Investment in FHLB and FRB Stock, at Cost             32,565             33,649        (3.2)%              34,731        (6.2)%             36,339       (10.4)%
                      Bank-Owned Life Insurance             27,813             27,581         0.8 %              27,350         1.7 %             26,874         3.5 %
                        Income Taxes Receivable              9,188              9,188         —                9,188         —               9,697        (5.2)%
                                   Other Assets             15,912             17,937       (11.3)%              15,559         2.3 %             16,477        (3.4)%
                                                                                                                                                                     
                                   TOTAL ASSETS       $ 2,710,835       $ 2,879,666        (5.9)%        $ 2,907,148        (6.8)%       $ 2,914,950        (7.0)%
                                                                                                                                                                     
           LIABILITIES AND STOCKHOLDERS' EQUITY                                                                                                                       
                                                                                                                                                                     
                                   Liabilities:                                                                                                                       
                                      Deposits:                                                                                                                       
                            Noninterest-Bearing         $ 600,812         $ 576,733         4.2 %          $ 546,815         9.9 %         $ 574,843         4.5 %
                               Interest-Bearing          1,797,563          1,854,207        (3.1)%           1,919,906        (6.4)%          2,000,271       (10.1)%
                                                                                                                                                                     
                                 Total Deposits          2,398,375          2,430,940        (1.3)%           2,466,721        (2.8)%          2,575,114        (6.9)%
                                                                                                                                                                     
                       Accrued Interest Payable             14,226             14,184         0.3 %              15,966       (10.9)%             14,024         1.4 %
                   Bank Acceptances Outstanding              1,629                805         —                  711         —               1,072        52.0 %
                Federal Home Loan Bank Advances              3,479            153,565       (97.7)%             153,650       (97.7)%            153,816       (97.7)%
                               Other Borrowings              1,034              1,386       (25.4)%               1,570       (34.1)%              3,062       (66.2)%
                 Junior Subordinated Debentures             82,406             82,406         —               82,406         —              82,406         — 
                       Deferred Tax Liabilities                —                —         —                  —         —               1,203         — 
         Accrued Expenses and Other Liabilities             11,321             12,329        (8.2)%              12,868       (12.0)%             11,073         2.2 %
                                                                                                                                                                     
                              Total Liabilities          2,512,470          2,695,615        (6.8)%           2,733,892        (8.1)%          2,841,770       (11.6)%
                                                                                                                                                                     
                           Stockholders' Equity            198,365            184,051         7.8 %             173,256        14.5 %             73,180         — 
                                                                                                                                                                     
     TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY       $ 2,710,835       $ 2,879,666        (5.9)%        $ 2,907,148        (6.8)%       $ 2,914,950        (7.0)%
                                                                                                                                
                                                                                                                                                                                                     
                           HANMI FINANCIAL CORPORATION AND SUBSIDIARIES                                                                                                                               
                                        CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)                                                                                                              
                          (Dollars in Thousands, Except Per Share Data)                                                                                                                               
                                                                                                                                                                                                     
                                                                                                                                     Three Months Ended                                 Six Months Ended 
                                                                             June 30,         Mar 31,            %        June 30,            %        June 30,        June 30,            % 
                                                                                 2011            2011       Change            2010       Change            2011            2010       Change 
                                          INTEREST AND DIVIDEND INCOME:                                                                                                                               
                                            Interest and Fees on Loans        $ 29,249        $ 30,905        (5.4)%        $ 34,486       (15.2)%        $ 60,154        $ 71,181       (15.5)%
                             Taxable Interest on Investment Securities            3,094            2,673        15.8 %            1,359         —             5,767            2,443         — 
                          Tax-Exempt Interest on Investment Securities               37               40        (7.5)%               77       (51.9)%               77              154       (50.0)%
                                       Dividends on FRB and FHLB Stock              132              133        (0.8)%              123         7.3 %              265              248         6.9 %
                  Interest on Interest-Bearing Deposits in Other Banks               79               89       (11.2)%               99       (20.2)%              168              154         9.1 %
                                        Interest on Federal Funds Sold               27               35       (22.9)%               27         —                62               44        40.9 %
                                    Total Interest and Dividend Income           32,618           33,875        (3.7)%           36,171        (9.8)%           66,493           74,224       (10.4)%
                                                                                                                                                                                                     
                                                      INTEREST EXPENSE:                                                                                                                               
                                                  Interest on Deposits            6,192            6,735        (8.1)%            8,813       (29.7)%           12,927           18,517       (30.2)%
                            Interest on Junior Subordinated Debentures              711              698         1.9 %              692         2.7 %            1,409            1,361         3.5 %
      Interest on Federal Home Loan Bank Advances and Other Borrowings              240              333       (27.9)%              370       (35.1)%              573              716       (20.0)%
                                                Total Interest Expense            7,143            7,766        (8.0)%            9,875       (27.7)%           14,909           20,594       (27.6)%
                                                                                                                                                                                                     
                 NET INTEREST INCOME BEFORE PROVISION FOR CREDIT LOSSES           25,475           26,109        (2.4)%           26,296        (3.1)%           51,584           53,630        (3.8)%
                                                                                                                                                                                                     
                                            Provision for Credit Losses            —             —          —            37,500         —             —            95,496         — 
                                                                                                                                                                                                     
           NET INTEREST INCOME (LOSS) AFTER PROVISION FOR CREDIT LOSSES           25,475           26,109        (2.4)%         (11,204)         —            51,584         (41,866)         — 
                                                                                                                                                                                                     
                                                   NON-INTEREST INCOME:                                                                                                                               
                                   Service Charges on Deposit Accounts            3,278            3,141         4.4 %            3,602        (9.0)%            6,419            7,328       (12.4)%
                                                 Insurance Commissions            1,203            1,260        (4.5)%            1,206        (0.2)%            2,463            2,484        (0.8)%
                                                       Remittance Fees              499              462         8.0 %              523        (4.6)%              961              985        (2.4)%
                                                    Trade Finance Fees              328              297        10.4 %              412       (20.4)%              625              763       (18.1)%
                                        Other Service Charges and Fees              368              333        10.5 %              372        (1.1)%              701              784       (10.6)%
                                      Bank-Owned Life Insurance Income              233              230         1.3 %              235        (0.9)%              463              466        (0.6)%
                                     Net Gain (Loss) on Sales of Loans             (77)            (338)       (77.2)%              220         —             (415)              214         — 
                     Net Gain (Loss) on Sales of Investment Securities             (70)            —          —             —          —              (70)              105         — 
                                                Other Operating Income              255              123       107.3 %              106         —               378              552       (31.5)%
                                             Total Non-Interest Income            6,017            5,508         9.2 %            6,676        (9.9)%           11,525           13,681       (15.8)%
                                                                                                                                                                                                     
                                                  NON-INTEREST EXPENSE:                                                                                                                               
                                        Salaries and Employee Benefits            8,762            9,124        (4.0)%            9,011        (2.8)%           17,886           17,797         0.5 %
                                               Occupancy and Equipment            2,650            2,565         3.3 %            2,674        (0.9)%            5,215            5,399        (3.4)%
                                                       Data Processing            1,487            1,399         6.3 %            1,487         —             2,886            2,986        (3.3)%
                 Deposit Insurance Premiums and Regulatory Assessments            1,377            2,070       (33.5)%            4,075       (66.2)%            3,447            6,299       (45.3)%
                                                     Professional Fees            1,138              789        44.2 %            1,022        11.4 %            1,927            2,088        (7.7)%
                                       Other Real Estate Owned Expense              806              829        (2.8)%            1,718       (53.1)%            1,635            7,418       (78.0)%
                            Directors and Officers Liability Insurance              733              734        (0.1)%              716         2.4 %            1,467            1,433         2.4 %
                      Expenses Related to Unconsummated Capital Raises            2,220            —          —             —          —             2,220            —          — 
                                              Other Operating Expenses            3,713            3,551         4.6 %            4,062        (8.6)%            7,264            7,569        (4.0)%
                                            Total Non-Interest Expense           22,886           21,061         8.7 %           24,765        (7.6)%           43,947           50,989       (13.8)%
                                                                                                                                                                                                     
              INCOME (LOSS) BEFORE PROVISION (BENEFIT) FOR INCOME TAXES            8,606           10,556       (18.5)%         (29,293)         —            19,162         (79,174)         — 
                                   Provision (Benefit) for Income Taxes              605              119         —              (36)         —               724            (431)         — 
                                                                                                                                                                                                     
                                                      NET INCOME (LOSS)         $ 8,001        $ 10,437       (23.3)%      $ (29,257)         —         $ 18,438      $ (78,743)         — 
                                                                                                                                                                                                     
                                             EARNINGS (LOSS) PER SHARE:                                                                                                                               
                                                                 Basic          $ 0.05          $ 0.07       (28.6)%        $ (0.57)         —           $ 0.12        $ (1.54)         — 
                                                               Diluted          $ 0.05          $ 0.07       (28.6)%        $ (0.57)         —           $ 0.12        $ (1.54)         — 
                                                                                                                                                                                                     
                                   WEIGHTED-AVERAGE SHARES OUTSTANDING:                                                                                                                               
                                                                 Basic      151,104,636      151,061,012                     51,036,573                    151,082,945       51,017,885              
                                                               Diluted      151,258,390      151,287,573                     51,036,573                    151,257,350       51,017,885              
                                                                                                                                                                                                     
                                       SHARES OUTSTANDING AT PERIOD-END      151,258,390      151,258,390                     51,198,390                    151,258,390       51,198,390              
                                                                                                 
                                                                                                                                                                                                   
                                                        HANMI FINANCIAL CORPORATION AND SUBSIDIARIES                                                                                                
                           SELECTED FINANCIAL DATA (UNAUDITED)                                                                                                                                    
                                        (Dollars in Thousands)                                                                                                                                    
                                                                                                                               Three Months Ended                                   Six Months Ended 
                                                                     June 30,        March 31,            %         June 30,            %         June 30,         June 30,            % 
                                                                         2011             2011       Change             2010       Change             2011             2010       Change 
                                                                                                                                                                                                 
                                             AVERAGE BALANCES:                                                                                                                                    
               Average Gross Loans, Net of Deferred Loan Fees      $ 2,136,976      $ 2,234,110        (4.3)%      $ 2,611,178       (18.2)%      $ 2,185,274      $ 2,688,012       (18.7)%
                                Average Investment Securities           497,052           473,113         5.1 %           158,543         —            485,148           142,034         — 
                              Average Interest-Earning Assets         2,804,709         2,892,404        (3.0)%         2,965,975       (5.40)%         2,848,313         2,988,332        (4.7)%
                                         Average Total Assets         2,836,967         2,906,253        (2.4)%         2,978,245        (4.7)%         2,871,419         3,031,917        (5.3)%
                                             Average Deposits         2,427,934         2,458,836        (1.3)%         2,617,738        (7.3)%         2,443,299         2,640,224        (7.5)%
                                           Average Borrowings           190,447           237,452       (19.8)%           240,189       (20.7)%           213,820           248,614       (14.0)%
                         Average Interest-Bearing Liabilities         2,025,392         2,133,097        (5.0)%         2,292,121       (11.6)%         2,078,947         2,326,367       (10.6)%
                                 Average Stockholders' Equity           189,528           178,221         6.3 %            91,628         —            183,906           114,651        60.4 %
                                      Average Tangible Equity           187,595           176,082         6.5 %            88,692         —            181,871           111,558        63.0 %
                                                                                                                                                                                                 
                                                                                                                                                                                                 
                                               PER SHARE DATA:                                                                                                                                    
                            Earnings (Loss) Per Share - Basic           $ 0.05           $ 0.07                       $ (0.57)                         $ 0.12         $ (1.54)              
                          Earnings (Loss) Per Share - Diluted           $ 0.05           $ 0.07                       $ (0.57)                         $ 0.12         $ (1.54)              
                                    Book Value Per Share (1)           $ 1.31           $ 1.22                         $ 1.43                         $ 1.31           $ 1.43              
                           Tangible Book Value Per Share (2)           $ 1.30           $ 1.20                         $ 1.38                         $ 1.30           $ 1.38              
                                                                                                                                                                                                 
                              PERFORMANCE RATIOS (Annualized):                                                                                                                                    
                                     Return on Average Assets             1.13%             1.46%                         (3.94)%                           1.29%           (5.24)%              
                       Return on Average Stockholders' Equity            16.93%            23.75%                       (128.07)%                          20.22%         (138.50)%              
                            Return on Average Tangible Equity            17.11%            24.04%                       (132.31)%                          20.44%         (142.34)%              
                                             Efficiency Ratio            72.67%            66.61%                          75.11%                          69.64%            75.75%              
                                     Net Interest Spread (3)             3.26%             3.27%                           3.17%                           3.26%             3.22%              
                                     Net Interest Margin (3)             3.65%             3.66%                           3.56%                           3.66%             3.62%              
                                                                                                                                                                                                 
                                                                                                                                                                                                 
                                    ALLOWANCE FOR LOAN LOSSES:                                                                                                                                    
                               Balance at Beginning of Period        $ 125,780        $ 146,059       (13.9)%        $ 177,820       (29.3)%        $ 146,059        $ 144,996         0.7 %
                       Provision Charged to Operating Expense             (250)             1,276         —             37,793         —              1,026            97,010       (98.9)%
                               Charge-Offs, Net of Recoveries          (16,501)          (21,555)       (23.4)%          (38,946)       (57.6)%          (38,056)          (65,339)       (41.8)%
                                     Balance at End of Period        $ 109,029        $ 125,780       (13.3)%        $ 176,667       (38.3)%        $ 109,029        $ 176,667       (38.3)%
                                                                                                                                                                                                 
               Allowance for Loan Losses to Total Gross Loans              5.16%              5.79%                            7.05%                            5.16%              7.05%              
      Allowance for Loan Losses to Total Non-Performing Loans             68.79%             82.90%                           72.96%                           68.79%             72.96%              
                                                                                                                                                                                                 
                                                                                                                                                                                                 
                        ALLOWANCE FOR OFF-BALANCE SHEET ITEMS:                                                                                                                                    
                               Balance at Beginning of Period          $ 2,141          $ 3,417       (37.3)%          $ 2,655       (19.4)%          $ 3,417          $ 3,876       (11.8)%
                       Provision Charged to Operating Expense               250           (1,276)         —              (293)         —            (1,026)           (1,514)       (32.2)%
                                     Balance at End of Period          $ 2,391          $ 2,141        11.7 %          $ 2,362         1.2 %          $ 2,391          $ 2,362         1.2 %
                                                                                                                                                                                                 
            (1) Total stockholders' equity divided by common shares outstanding.                                                                                                                  
                      (2) Tangible equity divided by common shares outstanding. See "Non-GAAP Financial Measures."                                                                                  
          (3) Amounts calculated on a fully taxable equivalent basis using the current statutory federal tax rate.                                                                                  
                                                                                                          
                                                                                                                                                                                                                       
                                                                   HANMI FINANCIAL CORPORATION AND SUBSIDIARIES                                                                                                         
                                       SELECTED FINANCIAL DATA (UNAUDITED) (Continued)                                                                                                                                
                                         (Dollars in Thousands)                                                                                                                                                       
                                                                                                                                                                                                                     
                                                                           June 30,             March 31,                 %            December 31,                 %              June 30,                 % 
                                                                               2011                  2011            Change                    2010            Change                  2010            Change 
                                         NON-PERFORMING ASSETS:                                                                                                                                                       
                                              Non-Accrual Loans             $ 158,493             $ 151,730              4.5 %               $ 169,028             (6.2)%             $ 242,133            (34.5)%
              Loans 90 Days or More Past Due and Still Accruing                    —                    —              —                       —              —                     —              — 
                                     Total Non-Performing Loans                158,493                151,730              4.5 %                  169,028             (6.2)%                242,133            (34.5)%
                                   Other Real Estate Owned, Net                  1,340                  2,642            (49.3)%                    4,089            (67.2)%                 24,064            (94.4)%
                                    Total Non-Performing Assets             $ 159,833             $ 154,372              3.5 %               $ 173,117             (7.7)%             $ 266,197            (40.0)%
                                                                                                                                                                                                                     
                   Total Non-Performing Loans/Total Gross Loans                   7.50%                   6.98%                                        7.45%                                      9.67%                   
                       Total Non-Performing Assets/Total Assets                   5.90%                   5.36%                                        5.95%                                      9.13%                   
          Total Non-Performing Assets/Allowance for Loan Losses                  146.6%                  122.7%                                       118.5%                                     150.7%                   
                                                                                                                                                                                                                     
                              DELINQUENT LOANS (Accrual Status)              $ 15,644              $ 20,711            (24.5)%                $ 21,457            (27.1)%              $ 21,702            (27.9)%
                                                                                                                                                                                                                     
            Delinquent Loans (Accrual Status)/Total Gross Loans                   0.74%                   0.95%                                        0.95%                                      0.87%                   
                                                                                                                                                                                                                     
                                                LOAN PORTFOLIO:                                                                                                                                                       
                                              Real Estate Loans             $ 788,559             $ 815,928             (3.4)%               $ 856,527             (7.9)%             $ 928,819            (15.1)%
                            Commercial and Industrial Loans (4)              1,277,650              1,309,644             (2.4)%                1,360,865             (6.1)%              1,519,639            (15.9)%
                                                 Consumer Loans                 46,500                 48,120             (3.4)%                   50,300             (7.6)%                 55,790            (16.7)%
                                              Total Gross Loans              2,112,709              2,173,692             (2.8)%                2,267,692             (6.8)%              2,504,248            (15.6)%
                                             Deferred Loan Fees                   (11)                  (277)            (96.0)%                    (566)            (98.1)%                  (822)            (98.7)%
                         Gross Loans, Net of Deferred Loan Fees              2,112,698              2,173,415             (2.8)%                2,267,126             (6.8)%              2,503,426            (15.6)%
                                      Allowance for Loan Losses              (109,029)              (125,780)            (13.3)%                (146,059)            (25.4)%              (176,667)            (38.3)%
                                          Loans Receivable, Net           $ 2,003,669           $ 2,047,635             (2.1)%             $ 2,121,067             (5.5)%           $ 2,326,759            (13.9)%
                                                                                                                                                                                                                     
                                                      LOAN MIX:                                                                                                                                                       
                                              Real Estate Loans                  37.3%                  37.5%                                       37.8%                                     37.1%                   
                                Commercial and Industrial Loans                  60.5%                  60.2%                                       60.0%                                     60.7%                   
                                                 Consumer Loans                   2.2%                   2.3%                                        2.2%                                      2.2%                   
                                              Total Gross Loans                 100.0%                 100.0%                                      100.0%                                    100.0%                   
                                                                                                                                                                                                                     
                                             DEPOSIT PORTFOLIO:                                                                                                                                                       
                                   Demand - Noninterest-Bearing             $ 600,812             $ 576,733              4.2 %               $ 546,815              9.9 %             $ 574,843              4.5 %
                                                        Savings                110,935                113,513             (2.3)%                  113,968             (2.7)%                127,848            (13.2)%
                         Money Market Checking and NOW Accounts                484,132                469,377              3.1 %                  402,481             20.3 %                434,533             11.4 %
                              Time Deposits of $100,000 or More                878,871                977,738            (10.1)%                1,118,621            (21.4)%              1,117,025            (21.3)%
                                            Other Time Deposits                323,625                293,579             10.2 %                  284,836             13.6 %                320,865              0.9 %
                                                 Total Deposits           $ 2,398,375           $ 2,430,940             (1.3)%             $ 2,466,721             (2.8)%           $ 2,575,114             (6.9)%
                                                                                                                                                                                                                     
                                                   DEPOSIT MIX:                                                                                                                                                       
                                   Demand - Noninterest-Bearing                  25.1%                  23.7%                                       22.2%                                     22.3%                   
                                                        Savings                   4.6%                   4.7%                                        4.6%                                      5.0%                   
                         Money Market Checking and NOW Accounts                  20.2%                  19.3%                                       16.3%                                     16.9%                   
                              Time Deposits of $100,000 or More                  36.6%                  40.2%                                       45.3%                                     43.4%                   
                                            Other Time Deposits                  13.5%                  12.1%                                       11.6%                                     12.4%                   
                                                 Total Deposits                 100.0%                 100.0%                                      100.0%                                    100.0%                   
                                                                                                                                                                                                                     
                                    CAPITAL RATIOS (Bank Only):                                                                                                                                                       
                                               Total Risk-Based                  14.02%                  13.00%                                       12.22%                                      7.35%                   
                                              Tier 1 Risk-Based                  12.72%                  11.70%                                       10.91%                                      6.02%                   
                                                Tier 1 Leverage                   9.70%                   9.08%                                        8.55%                                      4.99%                   
                                          Tangible equity ratio                  10.33%                   9.10%                                        8.59%                                      5.20%                   
                                                                                                                                                                                                                            
(4) Commercial and industrial loans include owner-occupied property loans of $848.8 million, $864.7 million, $894.8 million and $995.1 million as of June 30, 2011, March 31, 2011, December 31, 2010 and June 30, 2010, respectively.
                                                                                                                                                                                                                                                    
                                                                                                                                                                                                                                                                                                                                                         
                                                           HANMI FINANCIAL CORPORATION AND SUBSIDIARIES                                                                                                                                                                                                                                                   
                                                                                                                                            AVERAGE BALANCES, AVERAGE YIELDS EARNED AND AVERAGE RATES PAID (UNAUDITED)                                                                                                                                        
                          (Dollars in Thousands)                                                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                                                                                                               
                                                                                                                                                                                                                                                                                   Three Months Ended                                                         
                                                                                                                     June 30, 2011                                                                     March 31, 2011                                                                      June 30, 2010                                                        
                                                    Average Balance       Interest Income/ Expense       Average Yield/ Rate      Average Balance       Interest Income/ Expense       Average Yield/ Rate      Average Balance       Interest Income/ Expense       Average Yield/ Rate                                                         
                                                                                                                                                                                                                                                                                                                                                       
                         INTEREST-EARNING ASSETS                                                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                                                                                                       
                                          Loans:                                                                                                                                                                                                                                                                                                        
                              Real Estate Loans:                                                                                                                                                                                                                                                                                                 
                             Commercial Property           $ 688,142                        $ 9,386                       5.47%           $ 721,933                        $ 9,611                       5.40%           $ 811,063                       $ 10,351                       5.12%                                          
                                    Construction               50,192                             621                       4.96%               60,221                             508                       3.42%               81,067                             946                       4.68%                                          
                            Residential Property               59,323                             679                       4.59%               60,978                             683                       4.54%               69,937                             932                       5.35%                                          
                         Total Real Estate Loans              797,657                          10,686                       5.37%              843,132                          10,802                       5.20%              962,067                          12,229                       5.10%                                                 
             Commercial and Industrial Loans (1)            1,291,470                          17,914                       5.56%            1,342,271                          19,392                       5.86%            1,593,326                          21,484                       5.41%                                                 
                                  Consumer Loans               48,017                             562                       4.69%               49,167                             582                       4.80%               56,684                             738                       5.22%                                          
                               Total Gross Loans            2,137,144                          29,162                       5.47%            2,234,570                          30,776                       5.59%            2,612,077                          34,451                       5.29%                                          
                       Prepayment Penalty Income                —                               87                      —                 —                              129                      —                 —                               35                      —                                           
          Unearned Income on Loans, Net of Costs                (168)                           —                       —                 (460)                           —                       —                 (899)                           —                       —                                           
                                Gross Loans, Net            2,136,976                          29,249                       5.49%            2,234,110                          30,905                       5.61%            2,611,178                          34,486                       5.30%                                          
                                                                                                                                                                                                                                                                                                                                         
                          Investment Securities:                                                                                                                                                                                                                                                                                          
                     Municipal Bonds - Taxable                13,603                             140                       4.12%               17,531                             178                       4.06%                —                            —                       —                                                         
                 Municipal Bonds -Nontaxable (2)                4,125                              57                       5.53%                4,466                              62                       5.55%                7,484                             119                       6.36%                                          
               U.S. Government Agency Securities              152,438                             629                       1.65%              146,312                             623                       1.70%               65,894                             560                       3.40%                                          
                      Mortgage-Backed Securities              127,413                             946                       2.97%              114,830                             639                       2.23%               58,419                             577                       3.95%                                          
             Collateralized Mortgage Obligations              169,110                           1,113                       2.63%              156,583                             977                       2.50%               14,287                             129                       3.61%                                          
                                 Corporate Bonds               20,121                             165                       3.28%               20,205                             167                       3.31%                —                            —                       —                                           
                                Other Securities               10,242                             101                       3.94%               13,186                              89                       2.70%               12,459                              94                       3.02%                                          
                Total Investment Securities (2)              497,052                           3,151                       2.54%              473,113                           2,735                       2.31%              158,543                           1,479                       3.73%                                          
                                                                                                                                                                                                                                                                                                                                         
                  Other Interest-Earning Assets:                                                                                                                                                                                                                                                                                          
                               Equity Securities               34,078                             133                       1.56%               35,557                             132                       1.48%               37,979                             123                       1.30%                                                        
     Federal Funds Sold and Securities Purchased                                                                                                                                                                                                                                                                                                        
                         Under Resale Agreements                7,067                               9                       0.51%                6,699                               8                       0.48%               12,198                              16                       0.52%                                          
                         Term Federal Funds Sold               13,681                              18                       0.53%               19,778                              27                       0.55%                7,253                              11                      —                                           
        Interest-Bearing Deposits in Other Banks              115,855                              79                       0.27%              123,147                              89                       0.29%              138,824                              99                       0.29%                                          
             Total Other Interest-Earning Assets              170,681                             239                       0.56%              185,181                             256                       0.55%              196,254                             249                       0.51%                                          
                                                                                                                                                                                                                                                                                                                                         
              TOTAL INTEREST-EARNING ASSETS (2)          $ 2,804,709                       $ 32,639                       4.67%          $ 2,892,404                       $ 33,896                       4.75%         $ 2,965,975                        $ 36,214                       4.90%                                          
                                                                                                                                                                                                                                                                                                                                         
                    INTEREST-BEARING LIABILITIES                                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                                                                                         
                      Interest-Bearing Deposits:                                                                                                                                                                                                                                                                                          
                                         Savings           $ 111,723                          $ 734                       2.64%           $ 113,080                          $ 749                       2.69%           $ 125,016                          $ 922                       2.96%                                          
          Money Market Checking and NOW Accounts              488,723                           1,010                       0.83%              448,807                           1,002                       0.91%              458,137                           1,217                       1.07%                                          
             Time Deposits of $100,000 or More               926,024                           3,477                       1.51%            1,051,340                           4,059                       1.57%            1,090,412                           5,057                       1.86%                                          
                             Other Time Deposits              308,475                             971                       1.26%              282,418                             925                       1.33%              378,367                           1,617                       1.71%                                          
                 Total Interest-Bearing Deposits            1,834,945                           6,192                       1.35%            1,895,645                           6,735                       1.44%            2,051,932                           8,813                       1.72%                                          
                                                                                                                                                                                                                                                                                                                                         
                                     Borrowings:                                                                                                                                                                                                                                                                                          
                                   FHLB Advances              106,710                             239                       0.90%              153,609                             333                       0.88%              153,859                             339                       0.88%                                          
                                Other Borrowings                1,331                               1                       0.30%                1,437                           —                       —                 3,924                              31                      —                                           
                  Junior Subordinated Debentures               82,406                             711                       3.46%               82,406                             698                       3.44%               82,406                             692                       3.37%                                          
                                Total Borrowings              190,447                             951                       2.00%              237,452                           1,031                       1.76%              240,189                           1,062                       1.77%                                                 
                                                                                                                                                                                                                                                                                                                                         
              TOTAL INTEREST-BEARING LIABILITIES          $ 2,025,392                        $ 7,143                       1.41%          $ 2,133,097                        $ 7,766                       1.48%         $ 2,292,121                        $ 9,875                       1.73%                                                        
                                                                                                                                                                                                                                                                                                                                                       
                        NET INTEREST INCOME (2)                                            $ 25,496                                                                       $ 26,130                                                                        $ 26,339                                                                     
                                                                                                                                                                                                                                                                                                                                         
                        NET INTEREST SPREAD (2)                                                                            3.26%                                                                            3.27%                                                                            3.17%                                          
                                                                                                                                                                                                                                                                                                                           
                        NET INTEREST MARGIN (2)                                                                            3.65%                                                                            3.66%                                                                            3.56%                            
                                                                                                                                                                                                                                                                                                                           
                                                                                                                                                                                                                                                                                                                           
                                                                                                                                                                                    (1) Commercial and industrial loans include owner-occupied commercial real estate loans                                                                            
                                                                                                                                                                     (2) Amounts calculated on a fully taxable equivalent basis using the current statutory federal tax rate.                                                                           
                                                                                                                                                 
                                                                                                                                                                                                                                                        
                                                             HANMI FINANCIAL CORPORATION AND SUBSIDIARIES                                                                                                                                                
                                                                                                                                                AVERAGE BALANCES, AVERAGE YIELDS EARNED AND AVERAGE RATES PAID (UNAUDITED)                                   
                          (Dollars in Thousands)                                                                                                                                                                                                       
                                                                                                                                                                                                      Six Months Ended                                    
                                                                                                                       June 30, 2011                                                                        June 30, 2010                                   
                                                     Average Balance       Interest Income/ Expense       Average Yield/ Rate       Average Balance       Interest Income/ Expense       Average Yield/ Rate                                    
                                                                                                                                                                                                                                                      
                         INTEREST-EARNING ASSETS                                                                                                                                                                                                       
                                                                                                                                                                                                                                                      
                                          Loans:                                                                                                                                                                                                       
                              Real Estate Loans:                                                                                                                                                                                                       
                             Commercial Property             $ 704,944                       $ 18,997                       5.43%             $ 823,535                       $ 21,725                       5.32%                                   
                                    Construction                 55,178                           1,129                       4.13%                 97,003                           2,340                       4.86%                                   
                            Residential Property                 60,146                           1,362                       4.57%                 71,996                           1,715                       4.80%                                   
                         Total Real Estate Loans                820,268                          21,488                       5.28%                992,534                          25,780                       5.24%                                   
             Commercial and Industrial Loans (1)              1,316,730                          37,306                       5.71%              1,637,631                          43,719                       5.38%                                   
                                  Consumer Loans                 48,589                           1,144                       4.75%                 58,928                           1,587                       5.43%                                   
                               Total Gross Loans              2,185,587                          59,938                       5.53%              2,689,093                          71,086                       5.33%                                   
                       Prepayment Penalty Income                  —                              216                      —                   —                               95                      —                                    
          Unearned Income on Loans, Net of Costs                  (313)                           —                       —                 (1,081)                           —                       —                                    
                                Gross Loans, Net              2,185,274                          60,154                       5.55%              2,688,012                          71,181                       5.34%                                   
                                                                                                                                                                                                                                                      
                          Investment Securities:                                                                                                                                                                                                       
                     Municipal Bonds - Taxable                  15,556                             318                       4.09%                  —                            —                        0.00%                                   
                 Municipal Bonds -Nontaxable (2)                  4,294                             119                       5.54%                  7,517                             237                       6.31%                                   
               U.S. Government Agency Securities                149,392                           1,252                       1.68%                 49,100                             943                       3.84%                                   
                      Mortgage-Backed Securities                121,156                           1,585                       2.62%                 60,161                           1,067                       3.55%                                   
             Collateralized Mortgage Obligations                162,881                           2,090                       2.57%                 12,842                             242                       3.77%                                   
                                 Corporate Bonds                 20,163                             332                       3.29%                  —                            —                        0.00%                                   
                                Other Securities                 11,706                             190                       3.25%                 12,414                         146,059                       3.09%                                   
                Total Investment Securities (2)                485,148                           5,886                       2.43%                142,034                           2,681                       3.78%                                   
                                                                                                                                                                                                                                                      
                  Other Interest-Earning Assets:                                                                                                                                                                                                       
                               Equity Securities                 34,813                             265                       1.52%                 38,671                             248                       1.28%                                   
     Federal Funds Sold and Securities Purchased                                                                                                                                                                                                       
                         Under Resale Agreements                  6,884                              17                       0.49%                 13,152                              33                       0.50%                                   
                         Term Federal Funds Sold                 16,713                              45                       0.54%                  3,646                              11                       0.60%                                   
        Interest-Bearing Deposits in Other Banks                119,481                             168                       0.28%                102,817                             154                       0.30%                                   
             Total Other Interest-Earning Assets                177,891                             495                       0.56%                158,286                             446                       0.56%                                   
                                                                                                                                                                                                                                                      
              TOTAL INTEREST-EARNING ASSETS (2)            $ 2,848,313                       $ 66,535                       4.71%           $ 2,988,332                      $ (1,276)                       5.01%                                   
                                                                                                                                                                                                                                                      
                    INTEREST-BEARING LIABILITIES                                                                                                                                                                                                       
                                                                                                                                                                                                                                                      
                      Interest-Bearing Deposits:                                                                                                                                                                                                       
                                         Savings             $ 112,398                        $ 1,483                       2.66%             $ 120,347                        $ 1,746                       2.93%                                   
          Money Market Checking and NOW Accounts                468,875                           2,012                       0.87%                508,248                           2,839                       1.13%                                   
             Time Deposits of $100,000 or More                 988,336                           7,536                       1.54%              1,007,693                           9,734                       1.95%                                   
                             Other Time Deposits                295,518                           1,896                       1.29%                441,465                           4,198                       1.92%                                   
                 Total Interest-Bearing Deposits              1,865,127                          12,927                       1.40%              2,077,753                          18,517                       1.80%                                   
                                                                                                                                                                                                                                                      
                                     Borrowings:                                                                                                                                                                                                       
                                   FHLB Advances                130,030                             572                       0.89%                163,407                             685                       0.85%                                   
                                Other Borrowings                  1,384                               1                       0.15%                  2,801                              31                       2.23%                                   
                  Junior Subordinated Debentures                 82,406                           1,409                       3.45%                 82,406                           1,361                       3.33%                                   
                                Total Borrowings                213,820                           1,982                       1.87%                248,614                           2,077                       1.68%                                   
                                                                                                                                                                                                                                                      
              TOTAL INTEREST-BEARING LIABILITIES            $ 2,078,947                       $ 14,909                       1.45%           $ 2,326,367                       $ 20,594                       1.79%                                   
                                                                                                                                                                                                                                                      
                        NET INTEREST INCOME (2)                                              $ 51,626                                                                         $ 53,714                                                              
                                                                                                                                                                                                                                                      
                        NET INTEREST SPREAD (2)                                                                              3.26%                                                                              3.22%                                   
                                                                                                                                                                                                                                                      
                        NET INTEREST MARGIN (2)                                                                              3.66%                                                                              3.62%                                   
                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                      
                                                                                                     (1) Commercial and industrial loans include owner-occupied commercial real estate loans                                                          
                                                                                      (2) Amounts calculated on a fully taxable equivalent basis using the current statutory federal tax rate.                                                         

Non-GAAP Financial Measures

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 Bank and Hanmi Financial's capital strength. Tangible equity is calculated by subtracting goodwill and other intangible assets from total stockholders' equity. Banking and financial institution regulators also exclude goodwill and other intangible assets from total 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 Bank and Hanmi Financial. 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:

HANMI BANK                                                                          
                                                    NON-GAAP FINANCIAL MEASURES (UNAUDITED)                                      
                               (Dollars in Thousands)                                                                          
                                                                                                                              
                                                            June 30,        March 31,       December 31,         June 30, 
                                                                2011             2011               2010             2010 
                                                                                                                              
      TANGIBLE COMMON EQUITY TO TANGIBLE ASSETS RATIO                                                                            
                                                                                                                              
                                         Total Assets      $ 2,705,997      $ 2,872,804        $ 2,900,415      $ 2,907,089
                         Less Other Intangible Assets             (184)             (303)               (450)             (756)
                                      Tangible Assets      $ 2,705,813      $ 2,872,501        $ 2,899,965      $ 2,906,333
                                                                                                                              
                           Total Stockholders' Equity        $ 279,712        $ 261,639          $ 249,637        $ 151,836
                         Less Other Intangible Assets             (184)             (303)               (450)             (756)
                        Tangible Stockholders' Equity        $ 279,528        $ 261,336          $ 249,187        $ 151,080
                                                                                                                              
     Total Stockholders' Equity to Total Assets Ratio             10.34%              9.11%                8.61%              5.22%
      Tangible Common Equity to Tangible Assets Ratio             10.33%              9.10%                8.59%              5.20%
                   
                                                                                                                                 
                                                                    HANMI FINANCIAL CORPORATION AND SUBSIDIARIES                  
                                                    NON-GAAP FINANCIAL MEASURES (UNAUDITED)                                      
                               (Dollars in Thousands)                                                                          
                                                                                                                              
                                                            June 30,        March 31,       December 31,         June 30, 
                                                                2011             2011               2010             2010 
                                                                                                                              
      TANGIBLE COMMON EQUITY TO TANGIBLE ASSETS RATIO                                                                            
                                                                                                                              
                                         Total Assets      $ 2,710,835      $ 2,879,666        $ 2,907,148      $ 2,914,950
                         Less Other Intangible Assets           (1,825)           (2,015)             (2,233)           (2,754)
                                      Tangible Assets      $ 2,709,010      $ 2,877,651        $ 2,904,915      $ 2,912,196
                                                                                                                              
                           Total Stockholders' Equity        $ 198,365        $ 184,051          $ 173,256         $ 73,180
                         Less Other Intangible Assets           (1,825)           (2,015)             (2,233)           (2,754)
                        Tangible Stockholders' Equity        $ 196,540        $ 182,036          $ 171,023         $ 70,426
                                                                                                                              
     Total Stockholders' Equity to Total Assets Ratio              7.32%              6.39%                5.96%              2.51%
      Tangible Common Equity to Tangible Assets Ratio              7.26%              6.33%                5.89%              2.42%
CONTACT: Hanmi Financial Corporation
         David Yang
         Investor Relations Officer
         (213) 637-4798
Source: Hanmi Bank