Hanmi Financial Corporation Reports Net Income of $13.1 Million for First Quarter of 2007
Year-over-Year Earnings Per Share Decrease 13% to $0.26
LOS ANGELES--(BUSINESS WIRE)--
Hanmi Financial Corporation (NASDAQ:HAFC), the holding company for Hanmi Bank, reported that for the three months ended March 31, 2007, it earned net income of $13.1 million, a decrease of 24.6 percent compared to net income of $17.3 million in the fourth quarter of 2006, and a decrease of 11.8 percent compared to net income of $14.8 million in the comparable period a year ago. Earnings per share were $0.26 (diluted), a decrease of 13.3 percent compared to $0.30 (diluted) for the same period in 2006.
"Financial results for the quarter point to solid performance within our core operations that unfortunately was offset by a handful of problem loans," noted Sung Won Sohn, Ph.D., President and Chief Executive Officer. "These problem loans required a $6.1 million provision for credit losses during the quarter and reflect an increase in non-performing assets to $19.5 million from $14.2 million at December 31, 2006."
"Without minimizing the effect of the increase in provision for credit losses," added Dr. Sohn, "it is worth noting that whereas fourth-quarter 2006 net income included a pre-tax gain of $1.9 million on the sale of the unguaranteed portion of approximately $15.5 million in SBA loans, no comparable gain was realized in the first quarter of 2007."
"On a positive note, both loans and deposits were up during the quarter, by $48.3 million and $39.3 million, respectively, from December 31, 2006," said Dr. Sohn, "as was net interest margin, which was 4.61 percent compared to 4.59 percent in the fourth quarter of 2006. We look for further growth in loans and deposits in the second quarter and hope to maintain net margin at or near current levels."
FIRST-QUARTER HIGHLIGHTS
-- Net interest margin for the first quarter of 2007 was 4.61
percent, compared to 4.59 percent for the fourth quarter of
2006 and 4.92 percent for the first quarter of 2006. Net
interest income before provision for credit losses was $38.1
million for the first quarter of 2007, compared to $38.8
million for the fourth quarter of 2006 and $36.9 million for
the first quarter of 2006, declining slightly sequentially
because of the smaller number of days in the quarter.
-- The loan portfolio increased by $48.3 million, or 1.7 percent,
to $2.89 billion at March 31, 2007, compared to $2.84 billion
at December 31, 2006, reflecting balanced growth of the
commercial real estate and commercial and industrial portions
of the portfolio.
-- Non-performing assets increased by $5.3 million to $19.5
million, or 0.67 percent of the portfolio, at March 31, 2007,
compared to $14.2 million, or 0.50 percent of the portfolio,
at December 31, 2006.
-- The provision for credit losses was $6.1 million for the first
quarter of 2007, compared to $1.6 million for the fourth
quarter of 2006 and $3.0 million for the first quarter of
2006.
-- The allowance for loan losses was 1.08 percent, 0.96 percent
and 1.00 percent of the gross loan portfolio at March 31,
2007, December 31, 2006 and March 31, 2006, respectively.
-- Non-interest income and non-interest expenses reflect the
acquisitions of Chun-Ha Insurance Services, Inc. ("Chun-Ha")
and All World Insurance Services, Inc. ("All World"). The
acquisition was marginally accretive to earnings per share.
ACQUISITIONS
Effective January 2, 2007, the Company completed the acquisitions of Chun-Ha and All World. The acquisitions increased first quarter non-interest income by $984,000 and increased total non-interest expenses by $848,000. The insurance agencies' first quarter net income (after recognizing amortization of acquired intangible assets) of $85,000 is included in the Company's consolidated net income.
NET INTEREST INCOME BEFORE PROVISION FOR CREDIT LOSSES
Net interest income before provision for credit losses was $38.1 million for the first quarter of 2007, a decrease of $713,000, or 1.8 percent, compared to $38.8 million for the fourth quarter of 2006, and an increase of $1.2 million, or 3.3 percent, compared to $36.9 million for the first quarter of 2006.
The yield on the loan portfolio was 8.80 percent for the first quarter of 2007, an increase of 3 basis points compared to 8.77 percent for the fourth quarter of 2006, and an increase of 34 basis points compared to 8.46 percent for the first quarter of 2006. Interest income on loans in the first quarter of 2007 included prepayment penalties of $417,000, or 0.06 percent of average loans, compared to $6,000 for the fourth quarter of 2006. The yield on investment securities was 4.44 percent for the first quarter of 2007, a decrease of 2 basis points compared to 4.46 percent for the fourth quarter of 2006, and an increase of 8 basis points compared to 4.36 percent for the first quarter of 2006.
The yield on average interest-earning assets was 8.23 percent for the first quarter of 2007, an increase of 5 basis points compared to 8.18 percent for the fourth quarter of 2006, and an increase of 41 basis points compared to 7.82 percent for the first quarter of 2006. The cost of interest-bearing liabilities was 4.87 percent for the first quarter of 2007, an increase of 2 basis points compared to 4.85 percent for the fourth quarter of 2006, and an increase of 90 basis points compared to 3.97 percent for the first quarter of 2006, as the competitive deposit rate environment stabilized.
The year-over-year increase of $9.4 million in interest income was primarily due to: 1) an increase in average interest-earning assets, which increased from $3.04 billion to $3.35 billion, an increase of $314.0 million that provided an additional $7.0 million of interest income compared to the first quarter of 2006; and 2) an increase in the yield on average interest-earning assets, which increased from 7.82 percent to 8.23 percent, an increase of 41 basis points that provided an additional $2.4 million of interest income compared to the first quarter of 2006. The majority of this growth was funded by a $135.0 million, or 4.8 percent, increase in average deposits. Average borrowings also increased by $113.2 million, or 81.8 percent, compared to the first quarter of 2006. During 2006, the Company borrowed $130.0 million from the Federal Home Loan Bank for terms of 12 to 24 months to allow it to fund fixed-rate loans, but maintain the desired level of asset sensitivity.
PROVISION FOR CREDIT LOSSES
The provision for credit losses was $6.1 million for the first quarter of 2007, compared to $1.6 million for the fourth quarter of 2006 and $3.0 million for the same quarter last year. In the first quarter of 2007, net charge-offs were $2.4 million, compared to $2.4 million for the fourth quarter of 2006 and $1.2 million for the same quarter last year.
The increase in the provision for credit losses is attributable primarily to the migration of loans among the Company's risk rating categories. In the first quarter of 2007, three large loans, two of which became delinquent in the first quarter and one of which remained current as to principal and interest payments, migrated to higher risk categories. A fourth loan was deemed to be impaired, and a partial charge-off was recorded to bring its carrying balance to the level supported by real estate collateral. Together, the migration of these four loans required a provision for credit losses of $3.4 million. The migration of other loans accounted for the remainder of the provision.
The increase in the provision for credit losses also reflects increases in non-performing assets, which increased from $14.2 million at December 31, 2006 to $19.5 million at March 31, 2007, and delinquent loans, which increased from $19.6 million at December 31, 2006 to $37.3 million at March 31, 2007. While the level of non-performing assets and delinquent loans are indicators of the credit quality of the portfolio, the provision for credit losses is determined based primarily on loan classifications and the Company's historical loss experience with similarly situated credits.
NON-INTEREST INCOME
Non-interest income decreased by $1.1 million, or 9.8 percent, to $10.0 million for the first quarter of 2007, compared to $11.1 million for the fourth quarter of 2006, and increased by $2.0 million, or 24.1 percent, compared to $8.0 million for the first quarter of 2006. The changes in non-interest income are primarily attributable to a decrease in the amount of gain on sales of loans to $1.4 million for the first quarter of 2007, compared to $3.4 million for the fourth quarter of 2006 and $839,000 for the first quarter of 2006. In the fourth quarter of 2006, the Company recognized a pre-tax gain of $1.9 million on the sale of the unguaranteed portion of SBA loans. There were no such sales in the first quarter of 2007.
NON-INTEREST EXPENSES
Non-interest expenses increased by $1.1 million, or 5.3 percent, to $21.0 million for the first quarter of 2007, compared to $19.9 million for the fourth quarter of 2006, and increased by $3.3 million, or 18.2 percent, compared to $17.7 million for the first quarter of 2006. Such increases were primarily attributable to increased salaries and benefits associated with the acquisitions of Chun-Ha and All World, offset by decreased advertising and promotion expense in the first quarter of 2007, due to seasonal promotional activities in the fourth quarter of 2006.
The efficiency ratio (non-interest expenses divided by the sum of net interest income before provision for credit losses and non-interest income) for the first quarter of 2007 was 43.64 percent, compared to 39.95 percent for the fourth quarter of 2006 and 39.51 percent for the first quarter of 2006, reflecting the reduced level of gain on sale of loans and the acquisitions of Chun-Ha and All World.
PROVISION FOR INCOME TAXES
The provision for income taxes was $7.9 million at a 37.7 percent effective tax rate for the first quarter of 2007, compared to $11.0 million at a 38.9 percent effective tax rate for the fourth quarter of 2006 and $9.4 million at a 38.8 percent effective tax rate for the first quarter of 2006. This reflects a stable level of Enterprise Zone and low-income housing tax credits in a period in which there was a decline in taxable income.
FINANCIAL POSITION
Total assets were $3.78 billion at March 31, 2007, an increase of $52.3 million, or 1.4 percent, compared to $3.73 billion at December 31, 2006, and an increase of $263.3 million, or 7.5 percent, from the March 31, 2006 balance of $3.51 billion.
At March 31, 2007, net loans totaled $2.89 billion, an increase of $48.3 million, or 1.7 percent, from $2.84 billion at December 31, 2006. Real estate loans increased by $20.5 million, or 2.0 percent, to $1.06 billion at March 31, 2007, compared to $1.04 billion at December 31, 2006. Commercial and industrial loans grew by $32.4 million, or 1.9 percent, to $1.76 billion at March 31, 2007, compared to $1.73 billion at December 31, 2006.
The growth in total assets was primarily funded by an increase in deposits of $39.3 million, up 1.3 percent to $2.98 billion at March 31, 2007, compared to $2.94 billion at December 31, 2006. The increase in deposits included increases in time deposits of $100,000 or more of $35.0 million, up 2.5 percent to $1.42 billion, in noninterest-bearing demand deposits of $10.0 million, up 1.4 percent to $738.4 million, in other time deposits of $5.5 million, up 1.9 percent to $301.0 million, and in savings accounts of $2.3 million, up 2.3 percent to $101.5 million, partially offset by a decrease in money market checking accounts of $13.5 million, down 3.1 percent to $424.8 million.
At March 31, 2007, goodwill totaled $209.9 million, an increase of $2.3 million, or 1.1 percent, from $207.6 million at December 31, 2006, due to the acquisitions of Chun-Ha and All World.
ASSET QUALITY
Total non-performing assets, including loans 90 days or more past due and still accruing, non-accrual loans and other real estate owned ("OREO") assets, increased by $5.3 million to $19.5 million at March 31, 2007 from $14.2 million at December 31, 2006, and increased by $8.7 million from $10.8 million at March 31, 2006. Non-performing loans as a percentage of gross loans increased to 0.67 percent at March 31, 2007 from 0.50 percent at December 31, 2006 and 0.38 percent at March 31, 2006.
At March 31, 2007, delinquent loans were $37.3 million, or 1.28 percent of gross loans, compared to $19.6 million, or 0.68 percent of gross loans, at December 31, 2006, and $15.6 million, or 0.58 percent of gross loans, at March 31, 2006.
At March 31, 2007, the Company maintained an allowance for loan losses of $31.5 million and a liability for off-balance sheet exposure, primarily unfunded loan commitments, of $1.9 million. The allowance for loan losses represented 1.08 percent of gross loans at March 31, 2007, compared to 0.96 percent and 1.00 percent at December 31, 2006 and March 31, 2006, respectively. As of March 31, 2007, the allowance for loan losses was 161.6 percent of non-performing loans, compared to 193.9 percent at December 31, 2006 and 259.5 percent at March 31, 2006.
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 23 full-service offices in Los Angeles, Orange, San Francisco, Santa Clara and San Diego counties, and nine loan production offices in California, Colorado, Georgia, Illinois, Texas, Virginia and Washington. Hanmi Bank specializes in commercial, SBA, trade finance and consumer 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.
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; 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.
HANMI FINANCIAL CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(Dollars in Thousands)
March Dec. March
31, 31, % 31, %
2007 2006 Change 2006 Change
----------- ----------- -------- ----------- --------
ASSETS
----------------
Cash and Cash
Equivalents $148,174 $138,501 7.0 % $97,780 51.5 %
Term Federal
Funds Sold -- 5,000 (100.0)% -- --
Investment
Securities 381,237 391,579 (2.6)% 430,884 (11.5)%
Loans:
Loans, Net of
Deferred Loan
Fees 2,917,187 2,864,947 1.8 % 2,668,785 9.3 %
Allowance for
Loan Losses (31,527) (27,557) 14.4 % (26,703) 18.1 %
----------- ----------- -------- ----------- --------
Net Loans 2,885,660 2,837,390 1.7 % 2,642,082 9.2 %
----------- ----------- -------- ----------- --------
Customers'
Liability on
Acceptances 10,974 8,403 30.6 % 14,010 (21.7)%
Premises and
Equipment, Net 20,324 20,075 1.2 % 20,565 (1.2)%
Accrued Interest
Receivable 16,739 16,919 (1.1)% 14,398 16.3 %
Other Real
Estate Owned -- -- -- 545 (100.0)%
Deferred Income
Taxes 10,683 13,064 (18.2)% 8,688 23.0 %
Servicing Asset 4,528 4,579 (1.1)% 4,035 12.2 %
Goodwill 209,941 207,646 1.1 % 209,058 0.4 %
Other Intangible
Assets 8,619 6,312 36.5 % 8,066 6.9 %
Federal Reserve
Bank and
Federal Home
Loan Bank Stock 25,115 24,922 0.8 % 24,730 1.6 %
Bank-Owned Life
Insurance 23,822 23,592 1.0 % 22,932 3.9 %
Other Assets 31,768 27,261 16.5 % 16,555 91.9 %
----------- ----------- -------- ----------- --------
Total Assets $3,777,584 $3,725,243 1.4 % $3,514,328 7.5 %
=========== =========== ======== =========== ========
LIABILITIES AND
SHAREHOLDERS'
EQUITY
----------------
Liabilities:
Deposits:
Noninterest-
Bearing $738,396 $728,348 1.4 % $748,530 (1.4)%
Interest-
Bearing 2,245,611 2,216,367 1.3 % 2,070,336 8.5 %
----------- ----------- -------- ----------- --------
Total
Deposits 2,984,007 2,944,715 1.3 % 2,818,866 5.9 %
Accrued
Interest
Payable 22,379 22,582 (0.9)% 12,734 75.7 %
Acceptances
Outstanding 10,974 8,403 30.6 % 14,010 (21.7)%
FHLB Advances
and Other
Borrowings 168,114 169,037 (0.5)% 131,533 27.8 %
Junior
Subordinated
Debentures 82,406 82,406 -- 82,406 --
Other
Liabilities 16,571 10,983 50.9 % 16,231 2.1 %
----------- ----------- -------- ----------- --------
Total
Liabilities 3,284,451 3,238,126 1.4 % 3,075,780 6.8 %
Shareholders'
Equity 493,133 487,117 1.2 % 438,548 12.4 %
----------- ----------- -------- ----------- --------
Total
Liabilities and
Shareholders'
Equity $3,777,584 $3,725,243 1.4 % $3,514,328 7.5 %
=========== =========== ======== =========== ========
HANMI FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(Dollars in Thousands, Except Per Share Data)
For the Three Months Ended
---------------------------------------------------
March Dec. March
31, 31, % 31, %
2007 2006 Change 2006 Change
----------- ----------- ---------------------------
INTEREST INCOME:
Interest and
Fees on Loans $62,561 $63,666 (1.7)% $53,147 17.7 %
Interest on
Investments 4,664 4,762 (2.1)% 5,099 (8.5)%
Interest on
Federal Funds
Sold 726 654 11.0 % 289 151.2 %
Interest on Term
Federal Funds
Sold 5 2 150.0 % -- --
----------- ----------- ---------------------------
Total
Interest
Income 67,956 69,084 (1.6)% 58,535 16.1 %
----------- ----------- ---------------------------
INTEREST EXPENSE:
Interest on
Deposits 26,081 26,346 (1.0)% 19,591 33.1 %
Interest on FHLB
Advances and
Other Borrowings 2,171 2,278 (4.7)% 614 253.6 %
Interest on
Junior
Subordinated
Debentures 1,639 1,682 (2.6)% 1,475 11.1 %
----------- ----------- ---------------------------
Total
Interest
Expense 29,891 30,306 (1.4)% 21,680 37.9 %
----------- ----------- ---------------------------
NET INTEREST
INCOME BEFORE
PROVISION FOR
CREDIT LOSSES 38,065 38,778 (1.8)% 36,855 3.3 %
-- --
Provision for
Credit Losses 6,132 1,631 276.0 % 2,960 107.2 %
----------- ----------- ---------------------------
NET INTEREST
INCOME AFTER
PROVISION FOR
CREDIT LOSSES 31,933 37,147 (14.0)% 33,895 (5.8)%
----------- ----------- ---------------------------
NON-INTEREST
INCOME:
Service Charges
on Deposit
Accounts 4,488 4,471 0.4 % 4,231 6.1 %
Trade Finance
Fees 1,290 1,153 11.9 % 1,071 20.4 %
Remittance Fees 471 519 (9.2)% 488 (3.5)%
Other Service
Charges and
Fees 616 620 (0.6)% 534 15.4 %
Bank-Owned Life
Insurance
Income 230 225 2.2 % 218 5.5 %
Increase in Fair
Value of
Derivatives 92 351 (73.8)% 225 (59.1)%
Other Income 1,400 372 276.3 % 434 222.6 %
Gain on Sales of
Loans 1,400 3,367 (58.4)% 839 66.9 %
Gain on Sales of
Securities
Available for
Sale -- -- -- 5 (100.0)%
----------- ----------- ---------------------------
Total
Non-
Interest
Income 9,987 11,078 (9.8)% 8,045 24.1 %
----------- ----------- ---------------------------
NON-INTEREST
EXPENSES:
Salaries and
Employee
Benefits 11,761 10,303 14.2 % 9,161 28.4 %
Occupancy and
Equipment 2,512 2,521 (0.4)% 2,206 13.9 %
Data Processing 1,563 1,543 1.3 % 1,429 9.4 %
Advertising and
Promotion 661 875 (24.5)% 646 2.3 %
Supplies and
Communications 588 543 8.3 % 636 (7.5)%
Professional
Fees 474 360 31.7 % 668 (29.0)%
Amortization of
Other
Intangible
Assets 614 564 8.9 % 625 (1.8)%
Decrease in Fair
Value of
Embedded Option -- 290 (100.0)% 102 (100.0)%
Other Operating
Expenses 2,796 2,916 (4.1)% 2,267 23.3 %
----------- ----------- ---------------------------
Total
Non-
Interest
Expenses 20,969 19,915 5.3 % 17,740 18.2 %
----------- ----------- ---------------------------
INCOME BEFORE
PROVISION FOR
INCOME TAXES 20,951 28,310 (26.0)% 24,200 (13.4)%
Provision for
Income Taxes 7,896 11,000 (28.2)% 9,398 (16.0)%
----------- ----------- ---------------------------
NET INCOME $13,055 $17,310 (24.6)% $14,802 (11.8)%
=========== =========== ===========================
EARNINGS PER
SHARE:
Basic $0.27 $0.35 (22.9)% $0.30 (10.0)%
Diluted $0.26 $0.35 (25.7)% $0.30 (13.3)%
WEIGHTED-AVERAGE
SHARES
OUTSTANDING:
Basic 48,962,089 48,969,795 48,714,435
Diluted 49,500,312 49,567,778 49,318,397
SHARES OUTSTANDING
AT PERIOD-END 48,825,537 49,076,613 48,856,216
HANMI FINANCIAL CORPORATION AND SUBSIDIARIES
SELECTED FINANCIAL DATA (UNAUDITED)
(Dollars in Thousands)
For the Three Months Ended
---------------------------------------------------
March 31, Dec. 31, % March 31, %
2007 2006 Change 2006 Change
----------- ----------- ------- ----------- -------
AVERAGE
BALANCES:
Average Gross
Loans, Net of
Deferred Loan
Fees $2,882,632 $2,881,515 -- $2,547,421 13.2 %
Average
Investment
Securities 386,688 395,313 (2.2)% 437,576 (11.6)%
Average
Interest-
Earning
Assets 3,350,245 3,349,911 -- 3,036,300 10.3 %
Average Total
Assets 3,740,936 3,735,578 0.1 % 3,423,419 9.3 %
Average
Deposits 2,945,386 2,953,226 (0.3)% 2,810,313 4.8 %
Average
Borrowings 251,594 255,700 (1.6)% 138,362 81.8 %
Average
Interest-
Bearing
Liabilities 2,487,429 2,480,902 0.3 % 2,215,781 12.3 %
Average
Shareholders'
Equity 495,832 482,486 2.8 % 434,220 14.2 %
Average
Tangible
Equity 276,918 268,201 3.3 % 216,723 27.8 %
PERFORMANCE
RATIOS:
Return on
Average
Assets 1.42% 1.84% 1.75%
Return on
Average
Shareholders'
Equity 10.68% 14.23% 13.83%
Return on
Average
Tangible
Equity 19.12% 25.61% 27.70%
Efficiency
Ratio 43.64% 39.95% 39.51%
Net Interest
Margin 4.61% 4.59% 4.92%
ALLOWANCE FOR
LOAN LOSSES:
Balance at the
Beginning of
Period $27,557 $28,276 (2.5)% $24,963 10.4 %
Provision
Charged to
Operating
Expense 6,374 1,631 290.8 % 2,960 115.3 %
Charge-Offs,
Net of
Recoveries (2,404) (2,350) 2.3 % (1,220) 97.0 %
----------- ----------- ------- ----------- -------
Balance at
the End
of Period $31,527 $27,557 14.4 % $26,703 18.1 %
=========== =========== ======= =========== =======
Allowance for
Loan Losses
to Total
Gross Loans 1.08% 0.96% 1.00%
Allowance for
Loan Losses
to Total Non-
Performing
Loans 161.55% 193.86% 259.48%
ALLOWANCE FOR
OFF-BALANCE
SHEET ITEMS:
Balance at the
Beginning of
Period $2,130 $2,130 -- $2,130 --
Provision
Charged to
Operating
Expense (242) -- -- -- --
----------- ----------- ------- ----------- -------
Balance at
the End
of Period $1,888 $2,130 (11.4)% $2,130 (11.4)%
=========== =========== ======= =========== =======
HANMI FINANCIAL CORPORATION AND SUBSIDIARIES
SELECTED FINANCIAL DATA (UNAUDITED) (Continued)
(Dollars in Thousands)
March Dec. March
31, 31, % 31, %
2007 2006 Change 2006 Change
----------- ----------- ------- ----------- -------
NON-PERFORMING
ASSETS:
Non-Accrual
Loans $19,509 $14,213 37.3 % $10,282 89.7 %
Loans 90 Days or
More Past Due
and Still
Accruing 6 2 200.0 % 9 (33.3)%
----------- ----------- ------- ----------- -------
Total Non-
Performing
Loans 19,515 14,215 37.3 % 10,291 89.6 %
Other Real
Estate
Owned -- -- -- 545 --
----------- ----------- ------- ----------- -------
Total Non-
Performing
Assets $19,515 $14,215 37.3 % $10,836 80.1 %
=========== =========== ======= =========== =======
Total Non-
Performing
Loans/Total
Gross Loans 0.67% 0.50% 0.38%
Total Non-
Performing
Assets/Total
Assets 0.52% 0.38% 0.31%
Total Non-
Performing
Assets/Allowance
for Loan Losses 61.9% 51.6% 40.6%
DELINQUENT LOANS $37,280 $19,616 90.0 % $15,551 139.7 %
=========== =========== ======= =========== =======
Delinquent
Loans/Total
Gross Loans 1.28% 0.68% 0.58%
LOAN PORTFOLIO:
Real Estate
Loans $1,061,890 $1,041,393 2.0 % $1,021,026 4.0 %
Commercial and
Industrial
Loans 1,758,801 1,726,434 1.9 % 1,558,535 12.8 %
Consumer Loans 98,909 100,121 (1.2)% 93,828 5.4 %
----------- ----------- ------- ----------- -------
Total Gross
Loans 2,919,600 2,867,948 1.8 % 2,673,389 9.2 %
Deferred Loan
Fees (2,413) (3,001) (19.6)% (4,604) (47.6)%
Allowance for
Loan Losses (31,527) (27,557) 14.4 % (26,703) 18.1 %
----------- ----------- ------- ----------- -------
Loans
Receivable,
Net $2,885,660 $2,837,390 1.7 % $2,642,082 9.2 %
=========== =========== ======= =========== =======
LOAN MIX:
Real Estate
Loans 36.4% 36.3% 38.2%
Commercial and
Industrial
Loans 60.2% 60.2% 58.3%
Consumer Loans 3.4% 3.5% 3.5%
----------- ----------- -----------
Total Gross
Loans 100.0% 100.0% 100.0%
=========== =========== ===========
DEPOSIT
PORTFOLIO:
Demand -
Noninterest-
Bearing $738,396 $728,348 1.4 % $748,530 (1.4)%
Savings 101,526 99,254 2.3 % 114,336 (11.2)%
Money Market
Checking and
NOW Accounts 424,774 438,267 (3.1)% 495,365 (14.3)%
Time Deposits
of $100,000 or
More 1,418,335 1,383,358 2.5 % 1,188,982 19.3 %
Other Time
Deposits 300,976 295,488 1.9 % 271,653 10.8 %
----------- ----------- ------- ----------- -------
Total
Deposits $2,984,007 $2,944,715 1.3 % $2,818,866 5.9 %
=========== =========== ======= =========== =======
DEPOSIT MIX:
Demand -
Noninterest-
Bearing 24.7% 24.7% 26.6%
Savings 3.4% 3.4% 4.1%
Money Market
Checking and
NOW Accounts 14.2% 14.9% 17.6%
Time Deposits
of $100,000 or
More 47.5% 47.0% 42.2%
Other Time
Deposits 10.2% 10.0% 9.5%
----------- ----------- -----------
Total
Deposits 100.0% 100.0% 100.0%
=========== =========== ===========
HANMI FINANCIAL CORPORATION AND SUBSIDIARIES
AVERAGE BALANCES, AVERAGE YIELDS EARNED AND AVERAGE RATES PAID
(UNAUDITED)
(Dollars in Thousands)
For the Three Months Ended
----------------------------
March 31, 2007
---------------------------
Interest Average
Average Income/ Yield/
Balance Expense Rate
----------------------------
INTEREST-EARNING ASSETS
LOANS:
Real Estate Loans:
Commercial Property $752,673 $15,168 8.17%
Construction 212,370 4,937 9.43%
Residential Property 85,022 1,097 5.23%
---------------------------
Total Real Estate Loans 1,050,065 21,202 8.19%
Commercial and Industrial Loans 1,736,530 38,769 9.05%
Consumer Loans 98,634 2,173 8.93%
---------------------------
Total Loans - Gross 2,885,229 62,144 8.74%
Prepayment Penalty Income -- 417
Unearned Income on Loans, Net of
Costs (2,597) --
--------------------
Gross Loans, Net $2,882,632 $62,561 8.80%
===========================
INVESTMENT SECURITIES:
Municipal Bonds $72,396 $764 4.22%
U.S. Government Agency Securities 118,267 1,256 4.25%
Mortgage-Backed Securities 118,899 1,404 4.72%
Collateralized Mortgage Obligations 64,208 697 4.34%
Corporate Bonds 7,869 90 4.57%
Other Securities 5,049 84 6.65%
---------------------------
Total Investment
Securities $386,688 $4,295 4.44%
===========================
OTHER INTEREST-EARNING ASSETS:
Equity Securities (FHLB and FRB
Stock) $25,008 $369 5.90%
Federal Funds Sold 55,528 726 5.23%
Term Federal Funds Sold 389 5 5.14%
Interest-Earning Deposits -- -- 0.00%
---------------------------
Total Other Interest-
Earning Assets $80,925 $1,100 5.44%
===========================
TOTAL INTEREST-EARNING ASSETS $3,350,245 $67,956 8.23%
===========================
INTEREST-BEARING LIABILITIES
DEPOSITS:
Savings $100,777 $461 1.86%
Money Market Checking and NOW
Accounts 427,871 3,472 3.29%
Time Deposits of $100,000 or More 1,406,311 18,498 5.33%
Other Time Deposits 300,876 3,650 4.92%
---------------------------
Total Interest-Bearing
Deposits $2,235,835 $26,081 4.73%
===========================
BORROWINGS:
FHLB Advances and Other Borrowings $169,188 $2,171 5.20%
Junior Subordinated Debentures 82,406 1,639 8.07%
---------------------------
Total Borrowings $251,594 $3,810 6.14%
===========================
TOTAL INTEREST-BEARING LIABILITIES $2,487,429 $29,891 4.87%
===========================
NET INTEREST SPREAD 3.36%
=======
NET INTEREST MARGIN 4.61%
=======
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 Loans - Gross 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 -- -- 0.00%
---------------------------
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
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 SPREAD 3.33%
=======
NET INTEREST MARGIN 4.59%
=======
March 31, 2006
----------------------------
Interest Average
Average Income/ Yield/
Balance Expense Rate
----------------------------
INTEREST-EARNING ASSETS
LOANS:
Real Estate Loans:
Commercial Property $733,101 $14,506 8.02%
Construction 160,895 3,766 9.49%
Residential Property 86,614 1,082 5.07%
----------------------------
Total Real Estate Loans 980,610 19,354 8.00%
Commercial and Industrial Loans 1,477,652 31,833 8.74%
Consumer Loans 92,966 1,882 8.21%
----------------------------
Total Loans - Gross 2,551,228 53,069 8.44%
Prepayment Penalty Income 78
Unearned Income on Loans, Net of
Costs (3,807) --
--------------------
Gross Loans, Net $2,547,421 $53,147 8.46%
============================
INVESTMENT SECURITIES:
Municipal Bonds $73,770 $778 4.22%
U.S. Government Agency Securities 126,498 1,303 4.12%
Mortgage-Backed Securities 144,554 1,671 4.62%
Collateralized Mortgage Obligations 79,699 846 4.25%
Corporate Bonds 8,034 90 4.48%
Other Securities 5,021 85 6.77%
----------------------------
Total Investment
Securities $437,576 $4,773 4.36%
============================
OTHER INTEREST-EARNING ASSETS:
Equity Securities (FHLB and FRB
Stock) $24,610 $325 5.28%
Federal Funds Sold 26,593 289 4.35%
Term Federal Funds Sold -- -- 0.00%
Interest-Earning Deposits 100 1 0.00%
----------------------------
Total Other Interest-
Earning Assets $51,303 $615 4.80%
============================
TOTAL INTEREST-EARNING ASSETS $3,036,300 $58,535 7.82%
============================
INTEREST-BEARING LIABILITIES
DEPOSITS:
Savings $117,761 $482 1.66%
Money Market Checking and NOW
Accounts 519,628 3,714 2.90%
Time Deposits of $100,000 or More 1,167,270 12,784 4.44%
Other Time Deposits 272,760 2,611 3.88%
----------------------------
Total Interest-Bearing
Deposits $2,077,419 $19,591 3.82%
============================
BORROWINGS:
FHLB Advances and Other Borrowings $55,956 $614 4.45%
Junior Subordinated Debentures 82,406 1,475 7.26%
----------------------------
Total Borrowings $138,362 $2,089 6.12%
============================
TOTAL INTEREST-BEARING LIABILITIES $2,215,781 $21,680 3.97%
============================
NET INTEREST SPREAD 3.85%
========
NET INTEREST MARGIN 4.92%
========
Source: Hanmi Financial Corporation
Released May 3, 2007