EXHIBIT 99.1
HANMI FINANCIAL CORP. ANNOUNCES 3RD QUARTER OF YEAR 2003 RESULTS;
YEAR-TO-DATE NET INCOME OF $14.1 MILLION, OR $0.99 DILUTED EPS-
15.5% INCREASE OVER YEAR 2002
LOS ANGELES, CA. October 23, 2003 (MARKET WIRE) -- Hanmi Financial Corporation
(NASDAQ: HAFC), the holding company for Hanmi Bank, today announced the
unaudited results of its operations for the third quarter and nine months ended
September 30, 2003. Net income for the nine months ended September 30, 2003 was
$14.1 million, an increase of $1.9 million, or 15.5%, from net income of $12.2
million in the same period in 2002. On an earnings per share basis for the nine
months ended September 30, 2003, diluted earnings per share were $0.99, up
$0.12, or 13.8%, from the $0.87 reported in the same period in year 2002.
For the quarter ended September 30, 2003, net income was $4.9 million, a
decrease of approximately $200,000 or 3.9% compared to net income of $5.1
million for the same quarter in 2002. On an earnings per share basis, for the
quarter ended September 30, 2003, diluted earnings per share were $0.34, down by
$0.03, or 8.1%, from the $0.37 reported for the quarter ended September 30,
2002.
"We are pleased by the solid growth in the first nine months of the fiscal year
and will continue to work to improve this performance in the future," said Jae
Whan Yoo, President and CEO. "The nine month increase in total assets of 19
percent continues to prove that Hanmi is without question the leading Korean
community bank. This increase in assets, combined with our growth in net income,
net loans and total deposits, emphasizes the effectiveness of our strategic
business plan," continued Mr. Yoo.
THIRD QUARTER HIGHLIGHTS:
GENERAL
-- Appointed new President & CEO, Jae Whan Yoo
-- Completed a change of organizational structure to establish a solid
foundation for Hanmi's significant planned growth
FINANCIAL
-- Net income for the nine months ended September 30, 2003 increased by
15.5% to $14.1 million compared to $12.2 million for the nine months
ended September 30, 2002.
-- Net loans increased by 20.8%, or $203.1 million, to $1,177.2 million
compared to $974.1 million at December 31, 2002.
-- Total deposits increased by 17.0%, or $ 217.9 million, to $1.5 billion
compared to $1.3 billion at December 31, 2002.
-- Total assets increased by 19.1%, or $278.4 million, to $1.7 billion
compared to $1.4 billion at December 31, 2002.
-- On an earnings per share basis, for the nine months ended September
30, 2003, net income was $0.99 per diluted share, an increase of
13.8%, over $0.87 per diluted share a year ago.
NET INTEREST INCOME BEFORE PROVISION FOR LOAN LOSSES
Net interest income before provision for loan losses for the third quarter of
2003 increased by $1.6 million, or 12.5%, to $14.4 million compared to $12.8
million during the same quarter a year ago. Net interest income before provision
for loan losses for the nine months ended September 30, 2003 increased by $4.6
million, or 12.9%, to $40.5 million compared to $35.8 million during the same
period a year ago. The increase in net interest income was primarily due to an
increase of average interest-earning assets over average interest bearing
liabilities. The net interest margin was 3.69% for the third quarter of 2003.
Average interest-earning assets increased by $307.4 million, or 26.2%, over the
last year and provided an additional $4.5 million of interest income compared to
the same period in prior year. Interest income increased by $12.8 million due to
increase in volume, which was offset by $8.3 million due to decrease in yield.
Average interest-bearing liabilities increased $194.6 million, or 23.4%, over
2002, but the interest expense decreased by $146,000 or 0.9%. Interest expense
increased $3.4 million due to increase in volume, which was offset by $3.6
million decrease due to the decrease in interest rates.
PROVISION FOR LOAN LOSSES
The provision for loan losses represents the charge against current earnings
that is determined by management, through a disciplined credit review process,
as the amount needed to maintain an allowance that is sufficient to absorb loan
losses inherent in the bank's loan portfolio. In view of the still uncertain
economic picture, and the additional inherent risk resulting from the overall
increase of our loan portfolio, we increased the allowance for loan losses by
$1.2 million to $13.5 million, representing 1.13% of the gross loans, from $12.3
million or 1.24% of the gross loan at December 31, 2002. The provision for loan
losses was $4.4 million for the nine months ended September 30, 2003,
representing increase of $1.2 million or 39.0% compared to $3.2 million for the
same period in year 2002.
NON-INTEREST INCOME
For the quarter ended September 30, 2003, non-interest income decreased by
$669,000, or 13.1 %, to $4.5 million, compared to $5.1 million for the same
quarter in 2002. The majority of the decrease was due to gain recognized from
the sale of securities available-for-sale of $823,000 in year 2002. Excluding
this capital gain of $823,000, non-interest income for this quarter could have
actually increased by $154,000, or 3.6%, compared to $4.3 million for the same
quarter in year 2002. The majority increase was due to an increase in the
service charges on deposit accounts of $311,000, or 13.1 %, over the same
quarter in year 2002.
For the nine months ended September 30, 2003, non-interest income decreased by
$652,000, or 4.3%, to $14.6 million, compared to $15.3 million for the same
period in 2002. The majority of the decrease was due to decrease in gain on sale
of securities available-for-sale of $893,000 and the change in fair value of
interest rate swaps of $1.4 million recognized in 2002. Excluding these capital
gains of $2.3 million in 2002, non-interest income would have increased by $1.6
million mainly due to an increase in service charges on deposit accounts of
$826,000 and other non-interest income of $620,000.
NON-INTEREST EXPENSES
For the quarter ended September 30, 2003, non-interest expense increased by
$715,000 or 8.0 % to $9.7 million compared to $9.0 million for the same quarter
in 2002. The majority of the increase was due to an increase in salaries and
employee benefits of $688,000. Among the increase of salaries and employee
benefits, severance payments of $290,000 were included as a result of the
reorganization accomplished in the third quarter of 2003.
For the nine months ended September 30, 2003, non-interest expense decreased by
$170,000, or 0.6%, to $28.9 million compared to $29.1 million for the same
period in 2002. The majority of decrease was due to impairment charges made on
investment of $4.4 million in 2002, which was offset by the increase in salaries
and employee benefit of $2.4 million, increase in expense of premises and fixed
assets of $650,000 due to expansion of the branch network, and increase in other
non-interest expense of $1.2 million.
FINANCIAL POSITION
Total assets were $1,734.7 million at September 30, 2003, an increase of $278.4
million, or 19.1%, from December 31, 2002 of $1,456.3 billion, primarily
reflecting the growth in real estate loans, which includes both commercial and
residential loans and commercial loans. Hanmi's investment securities portfolio
increased by $166.8 million or 59.7% to $446.3 million at September 30, 2003
compared to $279.5 million at December 31, 2002.
At September 30, 2003, gross loans, net of unearned income totaled $1,190.7
million, an increase of $204.3 million, or 20.7%, from $986.4 million at
December 31, 2002. The majority of the growth was in real estate loans, which
increased by $102.7 million, or 27.6%, to $474.3 million at September 30, 2003,
compared to $371.6 million at December 31, 2002, and in commercial loans, which
increased by $93.1 million, or 16.3%, to $666.0 million at September 30, 2003,
compared to $572.9 million at December 31, 2002.
The increase in total assets was funded by increases in deposits and borrowings.
Total deposits increased by $217.9 million, or 17.0%, to $1.5 billion, compared
to $1.3 billion at December 31, 2002. The majority of the increase was led by an
increase in time certificates of deposit $100,000 or more of $119.0 million,
other time deposit of $38.7 million, and non-interest bearing deposits of $45.1
million. The other borrowed funds increased by $46.5 million to $81.0 million
from $34.5 million at December 31, 2002.
ASSET QUALITY
At September 30, 2003, accruing loans 90 days past due or more were $539,000,
decreased by $78,000 from $617,000 at December 31, 2002 and by $2.2 million from
$2.7 million at June 30, 2003. This decrease was due in a large part to the
payoff of two $1 million commercial loans during the third quarter of 2003.
Non-accrual loans were $7.8 million at September 30, 2003, an increase by $1.9
million from $5.9 million at December 31, 2002. The increase was due to three
commercial term loans to one borrower in the amount of $4.0 million that have
been placed on non-accrual in the second quarter of 2003. These loans have been
restructured and have been current on the restructured terms. Of the total
exposure for the foregoing loans, $2.4 million is fully secured by equipment and
commercial real estate, and, for the whole unsecured portion, a specific reserve
was allocated as of September 30, 2003.
ABOUT HANMI FINANCIAL CORPORATION
Headquartered in Los Angeles, Hanmi Bank, a wholly owned subsidiary of Hanmi
Financial Corporation, is one of the leading banks providing services to the
multi-ethnic communities of California, with 14 full-service offices in Los
Angeles, Orange, San Diego and Santa Clara counties. Hanmi Bank specializes in
commercial, SBA, trade finance and consumer lending, and is a recognized
community leader. The Bank's mission is to provide varied quality products and
premier services to its customers and to maximize shareholder value.
FORWARD-LOOKING STATEMENTS
This release may contain 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 the
Company operates; demographic changes; competition for loans and deposits;
fluctuation in interest rates; risks of natural disasters related to the
Company's real estate portfolio; risks associated with SBA loans; changes in
governmental regulation; credit quality; the availability of capital to fund the
expansion of the Company's business; and changes in securities markets.
Contact: Hyun-Kee Hong, acting CFO (213) 427-5612
Stephanie Yoon, Investor Relations (213) 427-5631
FINANCIAL HIGHLIGHTS
(Dollars in thousands, except per share data) For the quarter ended For the nine months ended
September 30, September 30,
------------------------------------------------ Change
CONDENSED INCOME STATEMENT 2003 2002 2003 2002 Amount Percentage
------------------------------------------------------------------------------
Interest income $ 19,560 $ 18,573 $ 56,138 $ 51,647 $ 4,491 8.7%
Interest expense 5,111 5,768 15,675 15,821 (146) -0.9%
-------- -------- -------- -------- -------- -------
Net interest income 14,449 12,805 40,463 35,826 4,637 12.9%
Provision for loan losses 1,700 1,050 4,380 3,150 1,230 39.0%
-------- -------- -------- -------- -------- -------
Net interest income after provision 12,749 11,755 36,083 32,676 3,407 10.4%
Service charges on deposit accounts 2,680 2,369 7,628 6,802 826 12.1%
Gain on sales of loans 307 583 1,629 1,466 163 11.1%
Gain on sale of available-for-sale securities -- 823 858 1,751 (893) -51.0%
Change in fair value of interest rate swaps -- -- 1,368 (1,368) -100.0%
All other non-interest income 1,465 1,346 4,484 3,864 620 16.0%
-------- -------- -------- -------- -------- -------
Non interest income 4,452 5,121 14,599 15,251 (652) -4.3%
Salaries and employee benefits 5,259 4,571 15,511 13,108 2,403 18.3%
Expenses of premises and fixed assets 1,387 1,074 3,855 3,205 650 20.3%
Impairment charges on investment -- 456 -- 4,406 (4,406) -100.0%
Other non-interest expense 3,037 2,867 9,565 8,382 1,183 14.1%
-------- -------- -------- -------- -------- -------
Non-interest expense 9,683 8,968 28,931 29,101 (170) -0.6%
-------- -------- -------- -------- -------- -------
Income before income taxes 7,518 7,908 21,751 18,826 2,925 15.5%
Income taxes 2,573 2,767 7,613 6,589 1,024 15.5%
-------- -------- -------- -------- -------- -------
Net Income $ 4,945 $ 5,141 $ 14,138 $ 12,237 1,901 15.5%
======== ======== ======== ======== ======== =======
Basic EPS $ 0.35 $ 0.37 $ 1.01 $ 0.89 $ 0.12 13.1%
Diluted EPS $ 0.34 $ 0.37 $ 0.99 $ 0.87 $ 0.12 13.8%
As of As of Change As of
CONDENSED BALANCE SHEET Sept. 30, 2003 Dec. 31, 2002 Amount Percentage Sept. 30, 2002
-------------------------------------------------------------------------------------
Assets
Cash and due from banks $ 53,314 $ 67,772 $ (14,458) -21.3% $ 72,833
Federal funds sold 0 55,000 (55,000) -100.0% 50,000
Term federal funds sold 5,000 30,000 (25,000) 26,000
Investment securities 446,344 279,548 166,796 59.7% 299,734
Loans:
Loans, net of unearned income 1,190,730 986,408 204,322 20.7% 940,150
Allowance for loan and lease losses (13,488) (12,269) (1,219) 9.9% (10,839)
----------- ----------- ----------- -------- -----------
Net loans 1,177,242 974,139 203,103 20.8% 929,311
Other assets 52,768 49,839 2,929 5.9% 47,300
----------- ----------- ----------- -------- -----------
Total assets $ 1,734,668 $ 1,456,298 $ 278,370 19.1% $ 1,425,178
=========== =========== =========== ======== ===========
Liabilities and Stockholders' equity
Non-interest bearing deposits $ 457,196 $ 412,060 $ 45,136 11.0% $ 346,647
Interest bearing deposits 1,044,682 871,919 172,763 19.8% 909,237
----------- ----------- ----------- -------- -----------
Total deposits 1,501,878 1,283,979 217,899 17.0% $ 1,255,884
Other borrowed funds 80,950 34,450 46,500 135.0% 40,450
Other liabilities 15,631 13,401 2,230 16.6% 9,425
----------- ----------- ----------- -------- -----------
Total Liabilities $ 1,598,459 $ 1,331,830 $ 266,629 20.0% 1,305,759
Shareholders' equity 136,209 124,468 11,741 9.4% 119,419
----------- ----------- ----------- -------- -----------
Total Liabilities and equity $ 1,734,668 $ 1,456,298 $ 278,370 19.1% $ 1,425,178
=========== =========== =========== ======== ===========
For the quarter ended, For the nine months ended, Change
AVERAGE BALANCES; Sept. 30, 2003 Sept. 30, 2002 Sept. 30, 2003 Sept. 30, 2002 Amount Percentage
--------------------------------------------------------------------------------------------
Average net loans $1,143,773 $ 909,244 $1,067,284 $ 859,379 $ 207,905 24.2%
Average interest-earning assets $1,567,484 $1,282,563 $1,481,770 $1,174,338 $ 307,432 26.2%
Average assets $1,663,538 $1,378,457 $1,578,044 $1,272,266 $ 305,778 24.0%
Average interest-bearing deposits $1,031,544 $ 879,935 $ 976,859 $ 815,170 $ 161,689 19.8%
Average deposits $1,473,048 $1,221,711 $1,388,007 $1,136,098 $ 251,909 22.2%
Average other borrowed funds $ 46,175 $ 32,655 $ 49,390 $ 16,505 $ 32,885 199.2%
Average interest-bearing liabilities $1,077,719 $ 912,589 $1,026,248 $ 831,675 $ 194,574 23.4%
Average equity $ 134,595 $ 114,595 $ 130,030 $ 110,092 $ 19,938 18.1%
For the quarter ended, For the nine months ended, Change
SELECTED PERFORMANCE RATIO; Sept. 30, 2003 Sept. 30, 2002 Sept. 30, 2003 Sept. 30, 2002 Amount Percentage
--------------------------------------------------------------------------------------------
Return on average assets 1.19% 1.49% 1.19% 1.28% -0.09% -6.85%
Return on average equity 14.70% 17.94% 14.50% 14.82% -0.32% -2.18%
Net interest margin 3.69% 3.99% 3.64% 4.07% -0.43% -10.49%
As of As of
ALLOWANCE FOR LOAN LOSSES Sept. 30, 2003 Sept. 30, 2002
----------------------------------------
Balance at the beginning of Year $ 12,269 $ 10,064
Provision for loan losses 4,380 3,150
Charge-offs, net of recoveries 3,161 2,375
-------- --------
Balance at the end of quarter $ 13,488 $ 10,839
======== ========
Loan loss allowance /Gross loans 1.13% 1.10%
Loan loss allowance/Non-performing loans 160.97% 253.13%
NON-PERFORMING ASSETS Sept. 30, 2003 Dec. 31, 2002 Sept. 30, 2002
-----------------------------------------------------
Accruing loans-90 days past due $ 539 $ 617 $ 205
Non accrual loans 7,840 5,858 4,077
------ ------- -------
Total Non performing loans 8,379 6,475 4,282
------ ------- -------
Total Non performing loans / Total loans 0.70% 0.66% 0.46%
Other real estate owned 122 - --
------- -- --
Total Non performing assets $ 8,501 $ 6,475 $ 4,282
======= ======= =======
Total Non performing assets / Total Assets 0.49% 0.44% 0.30%
Change
LOAN PORTFOLIO Sept. 30, 2003 Dec. 31, 2002 Amount Percentage
-------------------------------------------------------------------------
Real estate loans $ 474,266 $ 371,593 $ 102,673 27.6%
Commercial loans 666,012 572,910 93,102 16.3%
Consumer loans 53,477 44,416 9,061 20.4%
----------- --------- ---------
Total gross loans 1,193,755 988,919 204,836 20.7%
Unearned loan fees (3,025) (2,511) (514) 20.5%
Allowance for loan losses (13,488) (12,269) (1,219) 9.9%
----------- --------- --------- ----
Net loans $ 1,177,242 $ 974,139 $ 203,103 20.8%
=========== ========= ========= ====
LOAN MIX
Real estate loans 39.73% 37.58%
Commercial loans 55.79% 57.93%
Consumer loans 4.48% 4.49%
------- -------
Total gross loans 100.00% 100.00%
======= =======
As of As of Change
DEPOSIT PORTFOLIO Sept. 30, 2003 Dec. 31, 2002 Amount Percentage
-------------------------------------------------------------------------
Non-interest bearing $ 457,196 $ 412,060 $ 45,136 11.0%
Savings 95,478 98,121 (2,643) -2.7%
Time certificates of deposit $100,000 or more 442,567 323,544 119,023 36.8%
Other time deposits 298,591 259,940 38,651 14.9%
Money market checking 208,046 190,314 17,732 9.3%
----------- ----------- --------- ----
Total deposit $ 1,501,878 $ 1,283,979 $ 217,899 17.0%
=========== =========== ========= ====
DEPOSIT MIX
Non-interest bearing 30.44% 32.09%
Savings 6.36% 7.64%
Time certificates of deposit $100,000 or more 29.47% 25.20%
Other time deposits 19.88% 20.24%
Money market checking 13.85% 14.82%
------- -------
Total deposit 100.00% 100.00%
======= =======