Hanmi Financial Corporation Reports 2007 Financial Results
-- Net Loss Includes a Non-Cash Goodwill Impairment Charge of $102.9 Million --
LOS ANGELES--(BUSINESS WIRE)--
Hanmi Financial Corporation (NASDAQ:HAFC) ("we," "our" or "Hanmi"), the holding company for Hanmi Bank (the "Bank"), today reported a fourth-quarter 2007 net loss of $100.0 million, or ($2.15) per share, which includes a non-cash goodwill impairment charge of $102.9 million, compared to net income of $17.3 million, or $0.35 per diluted share, for the comparable period in 2006.
In addition, fourth-quarter 2007 results include a $1.1 million other-than-temporary impairment charge on a Community Reinvestment Act ("CRA") preferred security, $1.7 million separation expenses associated with the former Chief Executive Officer's retirement, and a $20.7 million provision for credit losses.
For the year, we reported a net loss of $60.5 million, or ($1.27) per share, compared to net income of $65.6 million, or $1.33 per diluted share, in 2006. Excluding three unusual charges - goodwill impairment charge, other-than-temporary impairment charge and separation expenses, 2007 net income was $44.1 million, or $0.92 per diluted share.
"The goodwill impairment charge was occasioned by the decline in the market value of our common stock, which we believe reflects, in part, recent turmoil in the financial markets that has adversely affected the market value of the common stock of many banks," stated Chung Hoon Youk, Chief Credit Officer and Interim Chief Executive Officer. "It is important to note that the fourth-quarter loss, attributable primarily to the goodwill impairment charge, does not affect our tangible equity or our liquidity position. Further, our regulatory capital ratios are unaffected by this goodwill write-off, and we believe that we continue to have a level of capital that is sufficient to support current operations and foreseeable future growth."
For the fourth quarter and full year ended December 31, 2007, we believe the following components to be of significance with regard to the net loss:
Three Months Ended December 31, 2007
-------------------------------------
Weighted-
Income Average Per
(Loss) Shares Share
(Numerator) (Denominator) Amount
-------------- ------------- --------
(Dollars in Thousands, Except Per
Share Amounts)
GAAP Net Loss $ (99,986) 46,465,973 $(2.15)
Impairment Loss on Goodwill 102,891
Other-Than-Temporary
Impairment Loss on Securities 1,074
Separation Expenses for Former
CEO's Retirement 1,683
Tax Effect (1,009)
Dilutive Securities - Options
and Warrants 180,751 $ 2.25
-------------- ------------- --------
Non-GAAP Net Income, Excluding
Impairment Loss on Goodwill,
Other-Than-Temporary
Impairment Loss on
Securities, Net of Taxes, and
Separation Expenses for
Former CEO's Retirement, Net
of Taxes $ 4,653 46,646,724 $ 0.10
============== ============= ========
Year Ended December 31, 2007
---------------------------------
Weighted-
Income Average Per
(Loss) Shares Share
(Numerator) (Denominator) Amount
----------- ------------- -------
(Dollars in Thousands, Except Per
Share Amounts)
GAAP Net Loss $ (60,520) 47,787,213 $(1.27)
Impairment Loss on Goodwill 102,891
Other-Than-Temporary Impairment
Loss on Securities 1,074
Separation Expenses for Former
CEO's Retirement 1,683
Tax Effect (1,009)
Dilutive Securities - Options and
Warrants 306,504 $ 2.19
----------- ------------- -------
Non-GAAP Net Income, Excluding
Impairment Loss on Goodwill,
Other-Than-Temporary Impairment
Loss on Securities, Net of Taxes,
and Separation Expenses for Former
CEO's Retirement, Net of Taxes $ 44,119 48,093,717 $ 0.92
=========== ============= =======
Mr. Youk noted, "In the fourth quarter, the economic conditions in the markets in which our borrowers operate continued to deteriorate and the levels of loan delinquency and default experienced by the Bank continued at higher than historical levels. In response, the Bank has increased its allowance for loan losses and significantly expanded its portfolio monitoring activities well beyond the normal level of portfolio monitoring to attempt to identify potential weaknesses in performing loans. For loans with identified weaknesses, we have created individual action plans to mitigate, to the extent possible, such weaknesses. This intensive effort resulted, in part, in additional downgrades in the classification of loans, primarily to 'special mention.' We will continue our intensive monitoring of the loan portfolio until the Bank's credit risk profile returns to a normalized level. The fourth-quarter provision for credit losses reflects the increased migration of loans into more adverse risk rating categories and increases in net charge-offs and non-performing loans during the quarter."
"Although the direction of the economy is beyond our control," said Mr. Youk, "we are committed to increasing profitability and reducing the volatility of our own financial performance. In addition to taking a very prudent stance towards the assessment of credit quality we recently inaugurated a campaign to increase core deposits with the objective of stronger margins."
NET INTEREST INCOME AND MARGIN
For the fourth quarter of 2007, average loans increased $148.7 million, or 4.7%, compared to the prior quarter, and increased $402.7 million, or 14.0%, compared to the same quarter in the previous year. Average deposits increased $13.7 million, or 0.5%, compared to the prior quarter, and increased $76.6 million, or 2.6%, compared to the same quarter in the previous year. In order to fill the funding gap, the Bank utilized FHLB advances and other borrowings, which increased to $487 million from $169 million a year ago.
Despite the growth in loans, net interest income in the fourth quarter of 2007 was essentially flat at $37.7 million compared to $37.9 million last quarter and $38.8 million in the fourth quarter of 2006 due to compression in the net interest margin. As a result of the Federal Reserve Bank lowering short-term interest rates and intense competition for loans and deposits, the Bank's net interest margin has decreased relative to prior periods. The Bank's net interest margin was 4.08% for the fourth quarter of 2007, compared to 4.26% in the prior quarter and 4.59% a year ago.
NON-INTEREST INCOME
Non-interest income increased in the fourth quarter to $10.9 million from $9.5 million in the prior quarter, excluding the fourth-quarter pre-tax non-cash impairment charge of $1.1 million on the CRA preferred security, but lower than the $11.1 million reported in the fourth quarter of 2006, due largely to fluctuations in gain on sales of loans. For the year, non-interest income increased to $40.0 million from $37.0 million in 2006, due mainly to an increase in insurance commissions from the acquisition of two insurance companies in January 2007.
NON-INTEREST EXPENSE
Non-interest expense for the fourth-quarter and year ended 2007 were $126.2 million and $189.9 million, respectively, which includes the goodwill impairment charge and separation expenses. Excluding the goodwill impairment charge and separation expenses, fourth-quarter non-GAAP non-interest expenses were $21.6 million, and full-year non-GAAP non-interest expenses were $85.4 million, compared to $19.9 million and $77.3 million, respectively for the prior year periods. These increases were mainly derived from an increase in operating expenses from the acquisition of two insurance companies.
Three Months Year
Ended Ended
December 31, December 31,
2007 2007
------------ ------------
(In Thousands)
GAAP Non-Interest Expenses $ 126,221 $ 189,929
Impairment Loss on Goodwill (102,891) (102,891)
Separation Expenses for Former CEO's
Retirement (1,683) (1,683)
------------ ------------
Non-GAAP Non-Interest Expenses, Excluding
Impairment Loss on Goodwill and Separation
Expenses for Former CEO's Retirement $ 21,647 $ 85,355
============ ============
GOODWILL IMPAIRMENT
As previously noted, in the fourth quarter we recorded a charge of $102.9 million for impairment of goodwill. Generally accepted accounting principles in the United States ("GAAP") require that when a company's fair value becomes less than the carrying amount of stockholders' equity, an assessment of impairment of goodwill must be performed. The Bank's goodwill was primarily associated with the acquisition of Pacific Union Bank in April 2004. The twelve branches acquired continue to be significant contributors to our operations and have been integrated into our core operations. GAAP requires that we use the most readily available indicator of market value, which is the market price of our stock, as part of our assessment of goodwill impairment. While we believe that our current market trading value is in part indicative of concerns in the economy and financial markets generally, we decided that the current fair value of our stock was not sufficient to support the carrying value of goodwill. This charge is not expected to affect our ongoing operations.
ASSET QUALITY
The total provision for credit losses for the three months ended December 31, 2007 was $20.7 million. By comparison, the provision for credit losses was $8.5 million for the three months ended September 30, 2007 and $1.6 million for the three months ended December 31, 2006. The increase in the provision for credit losses is attributable to increases in net charge-offs, non-performing loans and criticized and classified loans.
The provision for credit losses, net of the charge-offs, increased the allowance for loan losses to $43.6 million, or 1.33%, of the gross loan portfolio, at December 31, 2007. We also have an allowance for off-balance sheet exposure, primarily unfunded loan commitments, of $1.8 million (recorded in other liabilities). Based on management's evaluation and analysis of portfolio credit quality and prevailing economic conditions, we believe these reserves are adequate for losses inherent in the loan portfolio and off-balance sheet exposure at December 31, 2007.
CAPITAL
Our capital exceeds the levels defined as "well capitalized" by our regulators. Hanmi Bank's Tier 1 leverage ratio, Tier 1 risk-based capital ratio and total risk-based capital ratios were 8.47%, 9.31% and 10.58%, respectively, at December 31, 2007. Hanmi Financial's Tier 1 leverage ratio, Tier 1 risk-based capital ratio and total risk-based capital ratios were 8.52%, 9.38% and 10.63%, respectively, at December 31, 2007.
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 24 full-service offices in Los Angeles, Orange, San Bernardino, Santa Clara, San Francisco and San Diego counties, and eight loan production offices in California, Colorado, Georgia, Illinois, Texas, Virginia and Washington. 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.hanmifinancial.com.
This release includes non-GAAP net income, non-GAAP earnings per share data, shares used in non-GAAP earnings per share calculation and non-GAAP non-interest expenses.
These non-GAAP measures are not in accordance with, or an alternative for measures prepared in accordance with, GAAP and may be different from non-GAAP measures used by other companies. In addition, these non-GAAP measures are not based on any comprehensive set of accounting rules or principles. We believe that non-GAAP measures have limitations in that they do not reflect all of the amounts associated with our results of operations as determined in accordance with GAAP and that these measures should only be used to evaluate our results of operations in conjunction with the corresponding GAAP measures.
We believe that the presentation of non-GAAP net income, non-GAAP earnings per share data, shares used in non-GAAP earnings per share calculation and non-GAAP non-interest expenses, when shown in conjunction with the corresponding GAAP measures, provides useful information to investors and management regarding financial and business trends relating to its financial condition and results of operations. In addition, we believe that the presentation of non-GAAP income provides useful information to investors and management regarding operating activities for the periods presented.
For the internal budgeting process, our management uses financial statements that do not include impairment losses on goodwill, other-than-temporary impairment losses on securities and separation expenses. Our management also uses the foregoing non-GAAP measures, in addition to the corresponding GAAP measures, in reviewing our financial results.
FORWARD-LOOKING STATEMENTS
This 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. 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: general economic and business conditions in those areas in which we operate; demographic changes; competition for loans and deposits; fluctuations in interest rates; risks of natural disasters related to our real estate portfolio; risks associated with SBA loans; changes in governmental regulation; credit quality; the ability of borrowers to perform under the terms of their loans and other terms of credit agreements; our ability to successfully integrate acquisitions we may make; the availability of capital to fund the expansion of our business; and changes in securities markets. In addition, we set forth certain risks in our reports filed with the Securities and Exchange Commission, including our Annual Report on Form 10-K for the fiscal year ended December 31, 2006, 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)
December 31, September 30, %
2007 2007 Change
------------ ------------- -------
ASSETS
-----------------------------------
Cash and Due from Banks $ 105,898 $ 103,789 2.0%
Federal Funds Sold 16,500 -- --
------------ ------------- -------
Cash and Cash Equivalents 122,398 103,789 17.9%
------------ ------------- -------
Term Federal Funds Sold -- -- --
Investment Securities 350,457 357,616 (2.0)%
Loans:
Gross Loans, Net of Deferred
Loan Fees 3,284,708 3,219,871 2.0%
Allowance for Loan Losses (43,611) (34,503) 26.4%
------------ ------------- -------
Loans Receivable, Net 3,241,097 3,185,368 1.7%
------------ ------------- -------
Customers' Liability on Acceptances 5,387 5,357 0.6%
Premises and Equipment, Net 20,800 20,597 1.0%
Accrued Interest Receivable 17,500 17,619 (0.7)%
Other Real Estate Owned 287 287 --
Deferred Income Taxes 34,573 13,480 156.5%
Servicing Assets 4,336 4,328 0.2%
Goodwill 107,100 209,991 (49.0)%
Other Intangible Assets 6,909 7,457 (7.3)%
Federal Reserve Bank and Federal
Home Loan Bank Stock 33,479 25,525 31.2%
Bank-Owned Life Insurance 24,524 24,285 1.0%
Other Assets 25,371 35,916 (29.4)%
------------ ------------- -------
TOTAL ASSETS $ 3,994,218 $ 4,011,615 (0.4)%
============ ============= =======
LIABILITIES AND SHAREHOLDERS'
EQUITY
-----------------------------------
Liabilities:
Deposits:
Noninterest-Bearing $ 680,282 $ 690,513 (1.5)%
Interest-Bearing 2,321,417 2,357,044 (1.5)%
------------ ------------- -------
Total Deposits 3,001,699 3,047,557 (1.5)%
Accrued Interest Payable 21,828 20,449 6.7%
Acceptances Outstanding 5,387 5,357 0.6%
FHLB Advances and Other
Borrowings 487,164 361,344 34.8%
Junior Subordinated Debentures 82,406 82,406 --
Other Liabilities 24,189 11,593 108.7%
------------ ------------- -------
Total Liabilities 3,622,673 3,528,706 2.7%
Shareholders' Equity 371,545 482,909 (23.1)%
------------ ------------- -------
TOTAL LIABILITIES AND SHAREHOLDERS'
EQUITY $ 3,994,218 $ 4,011,615 (0.4)%
============ ============= =======
December 31, %
2006 Change
------------ --------
ASSETS
------------------------------------------------
Cash and Due from Banks $ 97,501 8.6%
Federal Funds Sold 41,000 (59.8)%
------------ --------
Cash and Cash Equivalents 138,501 (11.6)%
------------ --------
Term Federal Funds Sold 5,000 (100.0)%
Investment Securities 391,579 (10.5)%
Loans:
Gross Loans, Net of Deferred Loan Fees 2,864,947 14.7%
Allowance for Loan Losses (27,557) 58.3%
------------ --------
Loans Receivable, Net 2,837,390 14.2%
------------ --------
Customers' Liability on Acceptances 8,403 (35.9)%
Premises and Equipment, Net 20,075 3.6%
Accrued Interest Receivable 16,919 3.4%
Other Real Estate Owned -- --
Deferred Income Taxes 13,064 164.6%
Servicing Assets 4,579 (5.3)%
Goodwill 207,646 (48.4)%
Other Intangible Assets 6,312 9.5%
Federal Reserve Bank and Federal Home Loan Bank
Stock 24,922 34.3%
Bank-Owned Life Insurance 23,592 4.0%
Other Assets 27,261 (6.9)%
------------ --------
TOTAL ASSETS $ 3,725,243 7.2%
============ ========
LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------------------
Liabilities:
Deposits:
Noninterest-Bearing $ 728,347 (6.6)%
Interest-Bearing 2,216,368 4.7%
------------ --------
Total Deposits 2,944,715 1.9%
Accrued Interest Payable 22,582 (3.3)%
Acceptances Outstanding 8,403 (35.9)%
FHLB Advances and Other Borrowings 169,037 188.2%
Junior Subordinated Debentures 82,406 --
Other Liabilities 10,983 120.2%
------------ --------
Total Liabilities 3,238,126 11.9%
Shareholders' Equity 487,117 (23.7)%
------------ --------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 3,725,243 7.2%
============ ========
HANMI FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(Dollars in Thousands, Except Per Share Data)
Three Months Ended
-------------------------------------
Dec. 31, Sept. 30, %
2007 2007 Change
------------ ----------- -----------
INTEREST INCOME:
Interest and Fees on Loans $ 67,505 $ 66,714 1.2%
Interest on Investments 4,309 4,422 (2.6)%
Interest on Federal Funds
Sold 69 61 13.1%
Interest on Term Federal
Funds Sold -- -- --
------------ ----------- -----------
Total Interest Income 71,883 71,197 1.0%
------------ ----------- -----------
INTEREST EXPENSE:
Interest on Deposits 27,446 27,882 (1.6)%
Interest on FHLB Advances and
Other Borrowings 5,074 3,785 34.1%
Interest on Junior
Subordinated Debentures 1,670 1,675 (0.3)%
------------ ----------- -----------
Total Interest Expense 34,190 33,342 2.5%
------------ ----------- -----------
NET INTEREST INCOME BEFORE
PROVISION FOR CREDIT LOSSES 37,693 37,855 (0.4)%
--
Provision for Credit Losses 20,704 8,464 144.6%
------------ ----------- -----------
NET INTEREST INCOME AFTER
PROVISION FOR CREDIT LOSSES 16,989 29,391 (42.2)%
------------ ----------- -----------
NON-INTEREST INCOME:
Service Charges on Deposit
Accounts 4,672 4,463 4.7%
Insurance Commissions 1,419 1,131 25.5%
Trade Finance Fees 944 1,082 (12.8)%
Remittance Fees 546 512 6.6%
Other Service Charges and
Fees 646 691 (6.5)%
Bank-Owned Life Insurance
Income 240 234 2.6%
Increase in Fair Value of
Derivatives 162 207 (21.7)%
Other Income 479 457 4.8%
Gain on Sales of Loans 1,767 523 237.9%
Gain on Sales of Other Real
Estate Owned -- 226 (100.0)%
Gain on Sales of Securities
Available for Sale -- -- --
Other-Than-Temporary
Impairment Loss on
Securities (1,074) -- --
------------ ----------- -----------
Total Non-Interest
Income 9,801 9,526 2.9%
------------ ----------- -----------
NON-INTEREST EXPENSES:
Salaries and Employee
Benefits 13,075 11,418 14.5%
Occupancy and Equipment 2,754 2,657 3.7%
Data Processing 1,622 1,540 5.3%
Advertising and Promotion 1,137 943 20.6%
Supplies and Communications 596 704 (15.3)%
Professional Fees 782 565 38.4%
Amortization of Other
Intangible Assets 548 570 (3.9)%
Decrease in Fair Value of
Embedded Option -- 37 (100.0)%
Other Operating Expenses 2,816 2,815 --
Impairment Loss on Goodwill 102,891 -- --
------------ ----------- -----------
Total Non-Interest
Expenses 126,221 21,249 494.0%
------------ ----------- -----------
INCOME (LOSS) BEFORE PROVISION
FOR INCOME TAXES (99,431) 17,668 (662.8)%
Provision for Income Taxes 555 6,580 (91.6)%
------------ ----------- -----------
NET INCOME (LOSS) $ (99,986) $ 11,088 (1,001.7)%
============ =========== ===========
EARNINGS (LOSS) PER SHARE:
Basic $ (2.15) $ 0.23 (1,034.8)%
Diluted $ (2.15) $ 0.23 (1,034.8)%
WEIGHTED-AVERAGE SHARES
OUTSTANDING:
Basic 46,465,973 47,355,143
Diluted 46,465,973 47,536,078
SHARES OUTSTANDING AT PERIOD-END 45,860,941 46,986,341
Three Months Ended
-----------------------
Dec. 31, %
2006 Change
----------- ---------
INTEREST INCOME:
Interest and Fees on Loans $ 63,666 6.0%
Interest on Investments 4,762 (9.5)%
Interest on Federal Funds Sold 654 (89.4)%
Interest on Term Federal Funds Sold 2 (100.0)%
----------- ---------
Total Interest Income 69,084 4.1%
----------- ---------
INTEREST EXPENSE:
Interest on Deposits 26,346 4.2%
Interest on FHLB Advances and Other
Borrowings 2,278 122.7%
Interest on Junior Subordinated Debentures 1,682 (0.7)%
----------- ---------
Total Interest Expense 30,306 12.8%
----------- ---------
NET INTEREST INCOME BEFORE PROVISION FOR CREDIT
LOSSES 38,778 (2.8)%
--
Provision for Credit Losses 1,631 1,169.4%
----------- ---------
NET INTEREST INCOME AFTER PROVISION FOR CREDIT
LOSSES 37,147 (54.3)%
----------- ---------
NON-INTEREST INCOME:
Service Charges on Deposit Accounts 4,471 4.5%
Insurance Commissions 124 1,044.4%
Trade Finance Fees 1,153 (18.1)%
Remittance Fees 519 5.2%
Other Service Charges and Fees 620 4.2%
Bank-Owned Life Insurance Income 225 6.7%
Increase in Fair Value of Derivatives 351 (53.8)%
Other Income 248 93.1%
Gain on Sales of Loans 3,367 (47.5)%
Gain on Sales of Other Real Estate Owned -- --
Gain on Sales of Securities Available for
Sale -- --
Other-Than-Temporary Impairment Loss on
Securities -- --
----------- ---------
Total Non-Interest Income 11,078 (11.5)%
----------- ---------
NON-INTEREST EXPENSES:
Salaries and Employee Benefits 10,303 26.9%
Occupancy and Equipment 2,521 9.2%
Data Processing 1,543 5.1%
Advertising and Promotion 875 29.9%
Supplies and Communications 543 9.8%
Professional Fees 360 117.2%
Amortization of Other Intangible Assets 564 (2.8)%
Decrease in Fair Value of Embedded Option 290 (100.0)%
Other Operating Expenses 2,916 (3.4)%
Impairment Loss on Goodwill -- --
----------- ---------
Total Non-Interest Expenses 19,915 533.8%
----------- ---------
INCOME (LOSS) BEFORE PROVISION FOR INCOME TAXES 28,310 (451.2)%
Provision for Income Taxes 11,000 (95.0)%
----------- ---------
NET INCOME (LOSS) $ 17,310 (677.6)%
=========== =========
EARNINGS (LOSS) PER SHARE:
Basic $ 0.35 (714.3)%
Diluted $ 0.35 (714.3)%
WEIGHTED-AVERAGE SHARES OUTSTANDING:
Basic 48,969,795
Diluted 49,567,778
SHARES OUTSTANDING AT PERIOD-END 49,076,613
Year Ended
---------------------------------
Dec. 31, Dec. 31, %
2007 2006 Change
------------ ----------- --------
INTEREST INCOME:
Interest and Fees on Loans $ 261,992 $ 239,075 9.6%
Interest on Investments 17,867 19,710 (9.4)%
Interest on Federal Funds Sold 1,032 1,402 (26.4)%
Interest on Term Federal Funds
Sold 5 2 150.0%
------------ ----------- --------
Total Interest Income 280,896 260,189 8.0%
------------ ----------- --------
INTEREST EXPENSE:
Interest on Deposits 108,100 93,036 16.2%
Interest on FHLB Advances and
Other Borrowings 13,949 6,977 99.9%
Interest on Junior Subordinated
Debentures 6,644 6,416 3.6%
------------ ----------- --------
Total Interest Expense 128,693 106,429 20.9%
------------ ----------- --------
NET INTEREST INCOME BEFORE PROVISION
FOR CREDIT LOSSES 152,203 153,760 (1.0)%
--
Provision for Credit Losses 38,323 7,173 434.3%
------------ ----------- --------
NET INTEREST INCOME AFTER PROVISION
FOR CREDIT LOSSES 113,880 146,587 (22.3)%
------------ ----------- --------
NON-INTEREST INCOME:
Service Charges on Deposit
Accounts 18,061 17,134 5.4%
Insurance Commissions 4,954 770 543.4%
Trade Finance Fees 4,493 4,567 (1.6)%
Remittance Fees 2,049 2,056 (0.3)%
Other Service Charges and Fees 2,527 2,359 7.1%
Bank-Owned Life Insurance Income 933 879 6.1%
Increase in Fair Value of
Derivatives 683 1,074 (36.4)%
Other Income 1,702 1,157 47.1%
Gain on Sales of Loans 5,452 6,917 (21.2)%
Gain on Sales of Other Real
Estate Owned 226 48 370.8%
Gain on Sales of Securities
Available for Sale -- 2 (100.0)%
Other-Than-Temporary Impairment
Loss on Securities (1,074) -- --
------------ ----------- --------
Total Non-Interest
Income 40,006 36,963 8.2%
------------ ----------- --------
NON-INTEREST EXPENSES:
Salaries and Employee Benefits 47,036 40,512 16.1%
Occupancy and Equipment 10,494 9,643 8.8%
Data Processing 6,390 5,857 9.1%
Advertising and Promotion 3,630 2,997 21.1%
Supplies and Communications 2,592 2,391 8.4%
Professional Fees 2,468 1,910 29.2%
Amortization of Other Intangible
Assets 2,324 2,379 (2.3)%
Decrease in Fair Value of
Embedded Option 233 582 (60.0)%
Other Operating Expenses 11,871 11,042 7.5%
Impairment Loss on Goodwill 102,891 -- --
------------ ----------- --------
Total Non-Interest
Expenses 189,929 77,313 145.7%
------------ ----------- --------
INCOME (LOSS) BEFORE PROVISION FOR
INCOME TAXES (36,043) 106,237 (133.9)%
Provision for Income Taxes 24,477 40,588 (39.7)%
------------ ----------- --------
NET INCOME (LOSS) $ (60,520) $ 65,649 (192.2)%
============ =========== ========
EARNINGS (LOSS) PER SHARE:
Basic $ (1.27) $ 1.34 (194.8)%
Diluted $ (1.27) $ 1.33 (195.5)%
WEIGHTED-AVERAGE SHARES OUTSTANDING:
Basic 47,787,213 48,850,221
Diluted 47,787,213 49,435,128
SHARES OUTSTANDING AT PERIOD-END 45,860,941 49,076,613
HANMI FINANCIAL CORPORATION AND SUBSIDIARIES
SELECTED FINANCIAL DATA (UNAUDITED)
(Dollars in Thousands)
Three Months Ended
-----------------------------------
Dec. 31, Sept. 30, %
2007 2007 Change
------------ ----------- ---------
AVERAGE BALANCES:
Average Gross Loans, Net of
Deferred Loan Fees $3,284,222 $3,135,531 4.7%
Average Investment Securities 350,147 360,626 (2.9)%
Average Interest-Earning
Assets 3,669,436 3,526,493 4.1%
Average Total Assets 4,053,474 3,915,517 3.5%
Average Deposits 3,029,804 3,016,118 0.5%
Average Borrowings 496,513 367,605 35.1%
Average Interest-Bearing
Liabilities 2,845,775 2,683,930 6.0%
Average Shareholders' Equity 485,607 487,006 (0.3)%
Average Tangible Equity 269,496 269,255 0.1%
PERFORMANCE RATIOS:
Return on Average Assets (9.79)% 1.12%
Return on Average
Shareholders' Equity (81.69)% 9.03%
Return on Average Tangible
Equity (147.19)% 16.34%
Efficiency Ratio 265.76% 44.85%
Net Interest Margin 4.08% 4.26%
ALLOWANCE FOR LOAN LOSSES:
Balance at the Beginning of
Period $ 34,503 $ 32,190 7.2%
Provision Charged to Operating
Expense 20,736 8,397 146.9%
Charge-Offs, Net of Recoveries (11,628) (6,084) 91.1%
------------ ----------- ---------
Balance at the End of
Period $ 43,611 $ 34,503 26.4%
============ =========== =========
Allowance for Loan Losses to
Total Gross Loans 1.33% 1.07%
Allowance for Loan Losses to
Total Non-Performing Loans 80.05% 77.19%
ALLOWANCE FOR OFF-BALANCE SHEET
ITEMS:
Balance at the Beginning of
Period $ 1,797 $ 1,730 3.9%
Provision Charged to Operating
Expense (32) 67 (147.8)%
------------ ----------- ---------
Balance at the End of
Period $ 1,765 $ 1,797 (1.8)%
============ =========== =========
Three Months Ended
-----------------------
Dec. 31, %
2006 Change
----------- ---------
AVERAGE BALANCES:
Average Gross Loans, Net of Deferred Loan
Fees $2,881,515 14.0%
Average Investment Securities 395,313 (11.4)%
Average Interest-Earning Assets 3,349,911 9.5%
Average Total Assets 3,735,578 8.5%
Average Deposits 2,953,226 2.6%
Average Borrowings 255,700 94.2%
Average Interest-Bearing Liabilities 2,480,902 14.7%
Average Shareholders' Equity 482,486 0.6%
Average Tangible Equity 268,201 0.5%
PERFORMANCE RATIOS:
Return on Average Assets 1.84%
Return on Average Shareholders' Equity 14.23%
Return on Average Tangible Equity 25.61%
Efficiency Ratio 39.95%
Net Interest Margin 4.59%
ALLOWANCE FOR LOAN LOSSES:
Balance at the Beginning of Period $ 28,276 22.0%
Provision Charged to Operating Expense 1,631 1,171.4%
Charge-Offs, Net of Recoveries (2,350) 394.8%
----------- ---------
Balance at the End of Period $ 27,557 58.3%
=========== =========
Allowance for Loan Losses to Total Gross
Loans 0.96%
Allowance for Loan Losses to Total Non-
Performing Loans 193.86%
ALLOWANCE FOR OFF-BALANCE SHEET ITEMS:
Balance at the Beginning of Period $ 2,130 (15.6)%
Provision Charged to Operating Expense -- --
----------- ---------
Balance at the End of Period $ 2,130 (17.1)%
=========== =========
Year Ended
--------------------------------
Dec. 31, Dec. 31, %
2007 2006 Change
------------ ----------- -------
AVERAGE BALANCES:
Average Gross Loans, Net of
Deferred Loan Fees $3,080,544 $2,747,922 12.1%
Average Investment Securities 368,144 414,672 (11.2)%
Average Interest-Earning Assets 3,494,758 3,214,761 8.7%
Average Total Assets 3,882,891 3,602,181 7.8%
Average Deposits 2,989,806 2,881,448 3.8%
Average Borrowings 355,819 221,347 60.8%
Average Interest-Bearing
Liabilities 2,643,296 2,367,389 11.7%
Average Shareholders' Equity 492,637 458,227 7.5%
Average Tangible Equity 275,036 242,362 13.5%
PERFORMANCE RATIOS:
Return on Average Assets (1.56)% 1.82%
Return on Average Shareholders'
Equity (12.28)% 14.33%
Return on Average Tangible Equity (22.00)% 27.09%
Efficiency Ratio 98.81% 40.54%
Net Interest Margin 4.36% 4.78%
ALLOWANCE FOR LOAN LOSSES:
Balance at the Beginning of
Period $ 27,557 $ 24,963 10.4%
Provision Charged to Operating
Expense 38,688 7,173 439.4%
Charge-Offs, Net of Recoveries (22,634) (4,579) 394.3%
------------ ----------- -------
Balance at the End of Period $ 43,611 $ 27,557 58.3%
============ =========== =======
Allowance for Loan Losses to
Total Gross Loans 1.33% 0.96%
Allowance for Loan Losses to
Total Non-Performing Loans 80.05% 193.86%
ALLOWANCE FOR OFF-BALANCE SHEET
ITEMS:
Balance at the Beginning of
Period $ 2,130 $ 2,130 --
Provision Charged to Operating
Expense (365) -- --
------------ ----------- -------
Balance at the End of Period $ 1,765 $ 2,130 (17.1)%
============ =========== =======
HANMI FINANCIAL CORPORATION AND SUBSIDIARIES
SELECTED FINANCIAL DATA (UNAUDITED) (Continued)
(Dollars in Thousands)
Dec. 31, Sept. 30, %
2007 2007 Change
----------- ----------- -------
NON-PERFORMING ASSETS:
Non-Accrual Loans $ 54,252 $ 44,497 21.9%
Loans 90 Days or More Past Due and
Still Accruing 227 199 14.1%
----------- ----------- -------
Total Non-Performing Loans 54,479 44,696 21.9%
Other Real Estate Owned 287 287 --
----------- ----------- -------
Total Non-Performing
Assets $ 54,766 $ 44,983 21.7%
=========== =========== =======
Total Non-Performing Loans/Total
Gross Loans 1.66% 1.39%
Total Non-Performing Assets/Total
Assets 1.37% 1.12%
Total Non-Performing
Assets/Allowance for Loan Losses 125.6% 130.4%
DELINQUENT LOANS $ 45,086 $ 54,954 (18.0)%
=========== =========== =======
Delinquent Loans/Total Gross Loans 1.37% 1.71%
LOAN PORTFOLIO:
Real Estate Loans $1,101,907 $1,099,100 0.3%
Commercial and Industrial Loans 2,094,719 2,033,009 3.0%
Consumer Loans 90,449 90,416 --
----------- ----------- -------
Total Gross Loans 3,287,075 3,222,525 2.0%
Deferred Loan Fees (2,367) (2,654) (10.8)%
----------- ----------- -------
Gross Loans, Net of Deferred
Loan Fees 3,284,708 3,219,871 2.0%
Allowance for Loan Losses (43,611) (34,503) 26.4%
----------- ----------- -------
Loans Receivable, Net $3,241,097 $3,185,368 1.7%
=========== =========== =======
LOAN MIX:
Real Estate Loans 33.5% 34.1%
Commercial and Industrial Loans 63.7% 63.1%
Consumer Loans 2.8% 2.8%
----------- -----------
Total Gross Loans 100.0% 100.0%
=========== ===========
DEPOSIT PORTFOLIO:
Noninterest-Bearing $ 680,282 $ 690,513 (1.5)%
Savings 93,099 94,150 (1.1)%
Money Market Checking and NOW
Accounts 445,806 476,257 (6.4)%
Time Deposits of $100,000 or More 1,441,683 1,474,764 (2.2)%
Other Time Deposits 340,829 311,873 9.3%
----------- ----------- -------
Total Deposits $3,001,699 $3,047,557 (1.5)%
=========== =========== =======
DEPOSIT MIX:
Noninterest-Bearing 22.7% 22.7%
Savings 3.1% 3.1%
Money Market Checking and NOW
Accounts 14.9% 15.6%
Time Deposits of $100,000 or More 48.0% 48.4%
Other Time Deposits 11.3% 10.2%
----------- -----------
Total Deposits 100.0% 100.0%
=========== ===========
Dec. 31, %
2006 Change
----------- ----------
NON-PERFORMING ASSETS:
Non-Accrual Loans $ 14,213 281.7%
Loans 90 Days or More Past Due and Still
Accruing 2 11,250.0%
----------- ----------
Total Non-Performing Loans 14,215 283.3%
Other Real Estate Owned -- --
----------- ----------
Total Non-Performing Assets $ 14,215 285.3%
=========== ==========
Total Non-Performing Loans/Total Gross
Loans 0.50%
Total Non-Performing Assets/Total Assets 0.38%
Total Non-Performing Assets/Allowance for
Loan Losses 51.6%
DELINQUENT LOANS $ 19,616 129.8%
=========== ==========
Delinquent Loans/Total Gross Loans 0.68%
LOAN PORTFOLIO:
Real Estate Loans $1,041,393 5.8%
Commercial and Industrial Loans 1,726,434 21.3%
Consumer Loans 100,121 (9.7)%
----------- ----------
Total Gross Loans 2,867,948 14.6%
Deferred Loan Fees (3,001) (21.1)%
----------- ----------
Gross Loans, Net of Deferred Loan Fees 2,864,947 14.7%
Allowance for Loan Losses (27,557) 58.3%
----------- ----------
Loans Receivable, Net $2,837,390 14.2%
=========== ==========
LOAN MIX:
Real Estate Loans 36.3%
Commercial and Industrial Loans 60.2%
Consumer Loans 3.5%
-----------
Total Gross Loans 100.0%
===========
DEPOSIT PORTFOLIO:
Noninterest-Bearing $ 728,347 (6.6)%
Savings 99,255 (6.2)%
Money Market Checking and NOW Accounts 438,267 1.7%
Time Deposits of $100,000 or More 1,383,358 4.2%
Other Time Deposits 295,488 15.3%
----------- ----------
Total Deposits $2,944,715 1.9%
=========== ==========
DEPOSIT MIX:
Noninterest-Bearing 24.7%
Savings 3.4%
Money Market Checking and NOW Accounts 14.9%
Time Deposits of $100,000 or More 47.0%
Other Time Deposits 10.0%
-----------
Total Deposits 100.0%
===========
HANMI FINANCIAL CORPORATION AND SUBSIDIARIES
AVERAGE BALANCES, AVERAGE YIELDS EARNED AND AVERAGE RATES PAID
(UNAUDITED)
(Dollars in Thousands)
Three Months Ended
--------------------------------
December 31, 2007
------------------------------
Interest Average
Average Income/ Yield/
Balance Expense Rate
----------- --------- --------
INTEREST-EARNING ASSETS
LOANS:
Real Estate Loans:
Commercial Property $ 787,721 $15,483 7.80%
Construction 235,851 5,471 9.20%
Residential Property 89,184 1,160 5.16%
----------- --------- -------
Total Real Estate Loans 1,112,756 22,114 7.88%
Commercial and Industrial Loans 2,081,945 43,658 8.32%
Consumer Loans 91,378 1,624 7.05%
----------- --------- -------
Total Gross Loans 3,286,079 67,396 8.14%
Prepayment Penalty Income -- 109 --
Unearned Income on Loans, Net of
Costs (1,857) -- --
----------- --------- -------
Gross Loans, Net $3,284,222 $67,505 8.15%
=========== ========= =======
INVESTMENT SECURITIES:
Municipal Bonds $ 72,097 $ 765 4.24%
U.S. Government Agency Securities 110,194 1,188 4.31%
Mortgage-Backed Securities 97,566 1,190 4.88%
Collateralized Mortgage Obligations 52,883 570 4.31%
Corporate Bonds 12,709 154 4.85%
Other Securities 4,698 84 7.15%
----------- --------- -------
Total Investment Securities $ 350,147 $ 3,951 4.51%
=========== ========= =======
OTHER INTEREST-EARNING ASSETS:
Equity Securities (FHLB and FRB
Stock) $ 29,149 $ 358 4.91%
Federal Funds Sold 5,918 69 4.66%
Term Federal Funds Sold -- -- --
Interest-Earning Deposits -- -- --
----------- --------- -------
Total Other Interest-Earning
Assets $ 35,067 $ 427 4.87%
=========== ========= =======
TOTAL INTEREST-EARNING ASSETS $3,669,436 $71,883 7.77%
=========== ========= =======
INTEREST-BEARING LIABILITIES
INTEREST-BEARING DEPOSITS:
Savings $ 93,413 $ 622 2.64%
Money Market Checking and NOW
Accounts 478,501 3,996 3.31%
Time Deposits of $100,000 or More 1,465,551 18,977 5.14%
Other Time Deposits 311,797 3,851 4.90%
----------- --------- -------
Total Interest-Bearing Deposits $2,349,262 $27,446 4.64%
=========== ========= =======
BORROWINGS:
FHLB Advances and Other Borrowings $ 414,107 $ 5,074 4.86%
Junior Subordinated Debentures 82,406 1,670 8.04%
----------- --------- -------
Total Borrowings $ 496,513 $ 6,744 5.39%
=========== ========= =======
TOTAL INTEREST-BEARING LIABILITIES $2,845,775 $34,190 4.77%
=========== ========= =======
NET INTEREST INCOME $37,693
=========
NET INTEREST SPREAD 3.00%
=======
NET INTEREST MARGIN 4.08%
=======
Three Months Ended
---------------------------------
September 30, 2007
-------------------------------
Interest Average
Average Income/ Yield/
Balance Expense Rate
------------ --------- ----------
INTEREST-EARNING ASSETS
LOANS:
Real Estate Loans:
Commercial Property $ 775,605 $15,678 8.02%
Construction 227,779 4,814 8.38%
Residential Property 87,864 1,124 5.08%
------------ --------- --------
Total Real Estate Loans 1,091,248 21,616 7.86%
Commercial and Industrial Loans 1,951,478 43,169 8.78%
Consumer Loans 94,751 1,798 7.53%
------------ --------- --------
Total Gross Loans 3,137,477 66,583 8.42%
Prepayment Penalty Income -- 131 --
Unearned Income on Loans, Net of
Costs (1,946) -- --
------------ --------- --------
Gross Loans, Net $3,135,531 $66,714 8.44%
============ ========= ========
INVESTMENT SECURITIES:
Municipal Bonds $ 70,984 $ 764 4.31%
U.S. Government Agency Securities 119,704 1,286 4.30%
Mortgage-Backed Securities 101,688 1,237 4.87%
Collateralized Mortgage Obligations 55,619 612 4.40%
Corporate Bonds 7,811 89 4.56%
Other Securities 4,820 84 6.97%
------------ --------- --------
Total Investment Securities $ 360,626 $ 4,072 4.52%
============ ========= ========
OTHER INTEREST-EARNING ASSETS:
Equity Securities (FHLB and FRB
Stock) $ 25,431 $ 350 5.51%
Federal Funds Sold 4,905 61 4.97%
Term Federal Funds Sold -- -- --
Interest-Earning Deposits -- -- --
------------ --------- --------
Total Other Interest-Earning
Assets $ 30,336 $ 411 5.42%
============ ========= ========
TOTAL INTEREST-EARNING ASSETS $3,526,493 $71,197 8.01%
============ ========= ========
INTEREST-BEARING LIABILITIES
INTEREST-BEARING DEPOSITS:
Savings $ 95,147 $ 567 2.36%
Money Market Checking and NOW
Accounts 471,756 4,164 3.50%
Time Deposits of $100,000 or More 1,438,711 19,263 5.31%
Other Time Deposits 310,711 3,888 4.96%
------------ --------- --------
Total Interest-Bearing Deposits $2,316,325 $27,882 4.78%
============ ========= ========
BORROWINGS:
FHLB Advances and Other Borrowings $ 285,199 $ 3,785 5.27%
Junior Subordinated Debentures 82,406 1,675 8.06%
------------ --------- --------
Total Borrowings $ 367,605 $ 5,460 5.89%
============ ========= ========
TOTAL INTEREST-BEARING LIABILITIES $2,683,930 $33,342 4.93%
============ ========= ========
NET INTEREST INCOME $37,855
=========
NET INTEREST SPREAD 3.08%
========
NET INTEREST MARGIN 4.26%
========
Three Months Ended
--------------------------------
December 31, 2006
--------------------------------
Interest Average
Average Income/ Yield/
Balance Expense Rate
------------ --------- ---------
INTEREST-EARNING ASSETS
LOANS:
Real Estate Loans:
Commercial Property $ 756,961 $15,724 8.24%
Construction 189,948 4,662 9.74%
Residential Property 80,762 1,066 5.24%
------------ --------- -------
Total Real Estate Loans 1,027,671 21,452 8.28%
Commercial and Industrial Loans 1,758,498 39,986 9.02%
Consumer Loans 98,570 2,222 8.94%
------------ --------- -------
Total Gross Loans 2,884,739 63,660 8.76%
Prepayment Penalty Income 6 --
Unearned Income on Loans, Net of
Costs (3,224) -- --
------------ --------- -------
Gross Loans, Net $2,881,515 $63,666 8.77%
============ ========= =======
INVESTMENT SECURITIES:
Municipal Bonds $ 72,670 $ 766 4.22%
U.S. Government Agency Securities 118,103 1,261 4.27%
Mortgage-Backed Securities 123,283 1,461 4.74%
Collateralized Mortgage Obligations 68,368 744 4.35%
Corporate Bonds 7,914 89 4.50%
Other Securities 4,975 84 6.75%
------------ --------- -------
Total Investment Securities $ 395,313 $ 4,405 4.46%
============ ========= =======
OTHER INTEREST-EARNING ASSETS:
Equity Securities (FHLB and FRB
Stock) $ 24,877 $ 357 5.74%
Federal Funds Sold 48,043 654 5.45%
Term Federal Funds Sold 163 2 4.91%
Interest-Earning Deposits -- -- --
------------ --------- -------
Total Other Interest-Earning
Assets $ 73,083 $ 1,013 5.54%
============ ========= =======
TOTAL INTEREST-EARNING ASSETS $3,349,911 $69,084 8.18%
============ ========= =======
INTEREST-BEARING LIABILITIES
INTEREST-BEARING DEPOSITS:
Savings $ 98,892 $ 451 1.81%
Money Market Checking and NOW
Accounts 442,747 3,675 3.29%
Time Deposits of $100,000 or More 1,392,240 18,650 5.31%
Other Time Deposits 291,323 3,570 4.86%
------------ --------- -------
Total Interest-Bearing Deposits $2,225,202 $26,346 4.70%
============ ========= =======
BORROWINGS:
FHLB Advances and Other Borrowings $ 173,294 $ 2,278 5.22%
Junior Subordinated Debentures 82,406 1,682 8.10%
------------ --------- -------
Total Borrowings $ 255,700 $ 3,960 6.14%
============ ========= =======
TOTAL INTEREST-BEARING LIABILITIES $2,480,902 $30,306 4.85%
============ ========= =======
NET INTEREST INCOME $38,778
=========
NET INTEREST SPREAD 3.33%
=======
NET INTEREST MARGIN 4.59%
=======
Year Ended
--------------------------------
December 31, 2007
--------------------------------
Interest Average
Average Income/ Yield/
Balance Expense Rate
------------ --------- ---------
INTEREST-EARNING ASSETS
LOANS:
Real Estate Loans:
Commercial Property $ 771,386 $ 61,863 8.02%
Construction 223,017 20,359 9.13%
Residential Property 87,180 4,537 5.20%
------------ --------- ---------
Total Real Estate Loans 1,081,583 86,759 8.02%
Commercial and Industrial Loans 1,905,625 166,802 8.75%
Consumer Loans 95,463 7,611 7.97%
------------ --------- ---------
Total Gross Loans 3,082,671 261,172 8.47%
Prepayment Penalty Income -- 820 --
Unearned Income on Loans, Net of
Costs (2,127) -- --
------------ --------- ---------
Gross Loans, Net $ 3,080,544 $261,992 8.51%
============ ========= =========
INVESTMENT SECURITIES:
Municipal Bonds $ 71,937 $ 3,055 4.25%
U.S. Government Agency Securities 116,701 4,963 4.25%
Mortgage-Backed Securities 107,356 5,148 4.80%
Collateralized Mortgage Obligations 58,189 2,530 4.35%
Corporate Bonds 9,084 422 4.65%
Other Securities 4,877 336 6.89%
------------ --------- ---------
Total Investment Securities $ 368,144 $ 16,454 4.47%
============ ========= =========
OTHER INTEREST-EARNING ASSETS:
Equity Securities (FHLB and FRB
Stock) $ 26,228 $ 1,413 5.39%
Federal Funds Sold 19,746 1,032 5.23%
Term Federal Funds Sold 96 5 5.21%
Interest-Earning Deposits -- -- --
------------ --------- ---------
Total Other Interest-Earning
Assets $ 46,070 $ 2,450 5.32%
============ ========= =========
TOTAL INTEREST-EARNING ASSETS $ 3,494,758 $280,896 6.31%
============ ========= =========
INTEREST-BEARING LIABILITIES
INTEREST-BEARING DEPOSITS:
Savings $ 97,173 $ 2,152 2.21%
Money Market Checking and NOW
Accounts 452,825 15,298 3.38%
Time Deposits of $100,000 or More 1,430,603 75,516 5.28%
Other Time Deposits 306,876 15,134 4.93%
------------ --------- ---------
Total Interest-Bearing Deposits $ 2,287,477 $108,100 4.73%
============ ========= =========
BORROWINGS:
FHLB Advances and Other Borrowings $ 273,413 $ 13,949 5.10%
Junior Subordinated Debentures 82,406 6,644 8.06%
------------ --------- ---------
Total Borrowings $ 355,819 $ 20,593 5.79%
============ ========= =========
TOTAL INTEREST-BEARING LIABILITIES $ 2,643,296 $128,693 4.87%
============ ========= =========
NET INTEREST INCOME $152,203
=========
NET INTEREST SPREAD 1.44%
=========
NET INTEREST MARGIN 4.36%
=========
Year Ended
-------------------------------
December 31, 2006
-----------------------------
Interest Average
Average Income/ Yield/
Balance Expense Rate
------------- --------- -------
INTEREST-EARNING ASSETS
LOANS:
Real Estate Loans:
Commercial Property $ 756,771 $ 61,773 8.16%
Construction 176,265 17,047 9.67%
Residential Property 84,381 4,369 5.18%
----------- --------- -------
Total Real Estate Loans 1,017,417 83,189 8.18%
Commercial and Industrial Loans 1,637,133 146,803 8.97%
Consumer Loans 97,015 8,441 8.70%
----------- --------- -------
Total Gross Loans 2,751,565 238,433 8.67%
Prepayment Penalty Income -- 642 --
Unearned Income on Loans, Net of Costs (3,643) -- --
----------- --------- -------
Gross Loans, Net $2,747,922 $239,075 8.70%
=========== ========= =======
INVESTMENT SECURITIES:
Municipal Bonds $ 72,694 $ 3,087 4.25%
U.S. Government Agency Securities 122,503 5,148 4.20%
Mortgage-Backed Securities 132,845 6,248 4.70%
Collateralized Mortgage Obligations 73,765 3,178 4.31%
Corporate Bonds 7,908 357 4.51%
Other Securities 4,957 337 6.80%
----------- --------- -------
Total Investment Securities $ 414,672 $ 18,355 4.43%
=========== ========= =======
OTHER INTEREST-EARNING ASSETS:
Equity Securities (FHLB and FRB Stock) $ 24,684 $ 1,354 5.49%
Federal Funds Sold 27,410 1,402 5.11%
Term Federal Funds Sold 41 2 4.88%
Interest-Earning Deposits 32 1 4.01%
----------- --------- -------
Total Other Interest-Earning Assets $ 52,167 $ 2,759 5.29%
=========== ========= =======
TOTAL INTEREST-EARNING ASSETS $3,214,761 $260,189 6.35%
=========== ========= =======
INTEREST-BEARING LIABILITIES
INTEREST-BEARING DEPOSITS:
Savings $ 107,811 $ 1,853 1.72%
Money Market Checking and NOW Accounts 471,780 14,539 3.08%
Time Deposits of $100,000 or More 1,286,202 64,184 4.99%
Other Time Deposits 280,249 12,460 4.45%
----------- --------- -------
Total Interest-Bearing Deposits $2,146,042 $ 93,036 4.34%
=========== ========= =======
BORROWINGS:
FHLB Advances and Other Borrowings $ 138,941 $ 6,977 5.02%
Junior Subordinated Debentures 82,406 6,416 7.79%
----------- --------- -------
Total Borrowings $ 221,347 $ 13,393 6.05%
=========== ========= =======
TOTAL INTEREST-BEARING LIABILITIES $2,367,389 $106,429 4.50%
=========== ========= =======
NET INTEREST INCOME $153,760
=========
NET INTEREST SPREAD 1.86%
=======
NET INTEREST MARGIN 4.78%
=======
Source: Hanmi Financial Corporation
Released February 12, 2008