Hanmi Reports Second Quarter 2022 Results

来源: Nasdaq GlobeNewswire / 26 7月 2022 16:05:03 America/New_York

LOS ANGELES, July 26, 2022 (GLOBE NEWSWIRE) -- Hanmi Financial Corporation (NASDAQ: HAFC, or “Hanmi”), the parent company of Hanmi Bank (the “Bank”), today reported financial results for the second quarter of 2022.

Net income for the second quarter of 2022 was $25.1 million, or $0.82 per diluted share, up 21.0% from $20.7 million, or $0.68 per diluted share for the first quarter of 2022. The sequential quarter increase in net income reflects growth in net interest income and noninterest income, carefully managed noninterest expenses and a modest credit loss expense. Return on average assets and return on average equity for the second quarter of 2022 were 1.45% and 14.92%, respectively.

CEO Commentary

“We delivered another quarter of solid results,” said Bonnie Lee, President and Chief Executive Officer of Hanmi Financial Corporation. “Our strong earnings were supported by record loan production, an increased net interest margin, and excellent asset quality, while we continued to exercise disciplined expense management. This outstanding performance for the quarter has made the first half of 2022 one of Hanmi’s strongest starts to a year.”

“During the quarter, we built strong momentum across our diverse business lines, which fueled our stellar loan production, driving 6.0% sequential growth in our loans. We generated record loan production in our residential mortgage platform, equipment finance and SBA group, validating the investments we have made in these key business lines. In addition, our deposit-gathering initiatives, designed to build and expand business banking relationships, continue to bear fruit. Deposits increased by 3.4% in the quarter, primarily driven by noninterest-bearing demand deposits, which grew by 3.9% in the quarter and 8.1% year-to-date. These core deposits now comprise 46.5% of total deposits and continue to help hold down our cost of deposits.”

“Our team remains focused on execution in both the pursuit of new customers and expanding our existing relationships. The strategic investments we made over the past several quarters in new talent and technology continue to fuel our strategic initiatives to grow and diversify our business. With a well-defined strategic plan in place and our ongoing focus on execution, we are well positioned to continue to deliver disciplined growth and attractive returns for our shareholders.”

Second Quarter 2022 Highlights:

Second quarter net income increased 21.0% to $25.1 million, or $0.82 per diluted share from $20.7 million, or $0.68 per share for the first quarter of 2022.
Loans receivable grew to $5.66 billion at June 30, 2022, up 6.0% sequentially from the end of the first quarter and 9.8% from year-end on record loan production of $642.2 million for the second quarter.
Deposits were $5.98 billion at June 30, 2022, up 3.4% sequentially from the end of the first quarter and 3.3% from year-end; noninterest-bearing demand deposits increased 3.9% sequentially and were 46.5% of the deposit portfolio.
Net interest income was $59.0 million for the second quarter, up 15.9% from the first quarter.
Net interest margin (taxable-equivalent) increased to 3.55% for the second quarter, up 45 basis points from the first quarter; the yield on loans increased 13 basis points sequentially while the cost of interest-bearing deposits rose five basis points.
Credit loss expense was $1.6 million for the second quarter and the allowance for credit losses was $73.1 million at June 30, 2022, up from $71.5 million at March 31, 2022; the ratio of the allowance to loans however declined to 1.29% on higher loan balances.
Nonaccrual loans improved 3.7% to $11.0 million and nonperforming assets were 0.17% of total assets at June 30, 2022.
Noninterest income increased 9.3% to $9.3 million for second quarter from the first quarter on higher SBA gain on sale income as well as on higher overall service charges, fees and other income.
Noninterest expense was $31.5 million for the second quarter, down 0.7% from the first quarter; the efficiency ratio for the second quarter improved to 46.05% from 53.29% for the first quarter.
Hanmi’s tangible common equity to tangible assets was 8.74% at the end of the second quarter and it had a Common equity Tier 1 capital ratio of 11.07% and a Total capital ratio of 14.32%.

For more information about Hanmi, please see the Q2 2022 Investor Update (and Supplemental Financial Information), which is available on the Bank’s website at www.hanmi.com and via a current report on Form 8-K on the website of the Securities and Exchange Commission at www.sec.gov. Also, please refer to “Non-GAAP Financial Measures” herein for further details of the presentation of certain non-GAAP financial measures.

Quarterly Results
(Dollars in thousands, except per share data)

	As of or for the Three Months Ended															Amount Change
	June 30,			March 31,			December 31,			September 30,			June 30,			Q2-22			Q2-22
		2022			2022			2021			2021			2021		vs. Q1-22			vs. Q2-21

Net income	$	25,050		$	20,695		$	33,331		$	26,565		$	22,122		$	4,355		$	2,928
Net income per diluted common share	$	0.82		$	0.68		$	1.09		$	0.86		$	0.72		$	0.14		$	0.10

Assets	$	6,955,968		$	6,737,052		$	6,858,587		$	6,776,533		$	6,578,856		$	218,916		$	377,112
Loans receivable	$	5,655,403		$	5,337,500		$	5,151,541		$	4,858,865		$	4,820,092		$	317,903		$	835,311
Deposits	$	5,979,390		$	5,783,170		$	5,786,269		$	5,729,536		$	5,629,830		$	196,220		$	349,560

Return on average assets		1.45	%		1.22	%		1.93	%		1.58	%		1.38	%		0.23			0.07
Return on average stockholders' equity		14.92	%		12.74	%		20.89	%		17.13	%		14.91	%		2.18			0.01

Net interest margin		3.55	%		3.10	%		2.96	%		3.07	%		3.19	%		0.45			0.36
Efficiency ratio⁽¹⁾		46.05	%		53.29	%		53.81	%		52.01	%		52.66	%		-7.24			-6.61

Tangible common equity to tangible assets⁽²⁾		8.74	%		9.07	%		9.23	%		8.98	%		9.01	%		-0.33			-0.27
Tangible common equity per common share⁽²⁾	$	19.91		$	20.02		$	20.79		$	19.96		$	19.27		$	(0.11	)	$	0.64


⁽¹⁾Noninterest expense divided by net interest income plus noninterest income.
^{(2 )}Refer to "Non-GAAP Financial Measures" for further details.

Results of Operations
Net interest income was $59.0 million for the second quarter of 2022 compared with $51.0 million for the first quarter of 2022. Second quarter interest and fees on loans receivable increased 11.0%, or $5.9 million, from the preceding quarter primarily due to a 6.5% increase in the average balance of loans receivable and a 13 basis point increase in average loan yields. Interest on securities in the second quarter increased $0.4 million from the first quarter primarily due to a $14.8 million increase in the average balance and a 16 basis point increase in the average yield. Second quarter loan prepayment penalties were $0.5 million compared with $0.4 million for the first quarter. Total interest expense for the second quarter decreased $1.8 million from the preceding quarter primarily due to the first quarter redemption of the 5.45% 2027 Subordinated Notes due March 30, 2027 (the “2027 Subordinated Notes”) and the related charge for unamortized debt issuance costs, partially offset by a five basis point increase in the average rate paid on interest-bearing deposits.


	As of or For the Three Months Ended(in thousands)										Percentage Change
	Jun 30,		Mar 31,		Dec 31,		Sep 30,		Jun 30,		Q2-22			Q2-22
Net Interest Income		2022		2022		2021		2021		2021	vs. Q1-22			vs. Q2-21

Interest and fees on loans receivable⁽¹⁾	$	59,855	$	53,924	$	52,240	$	52,961	$	52,785		11.0	%		13.4	%
Interest on securities		2,930		2,516		1,821		1,865		1,404		16.5	%		108.7	%
Dividends on FHLB stock		242		248		248		245		242		-2.4	%		0.0	%
Interest on deposits in other banks		193		216		302		329		176		-10.6	%		9.7	%
Total interest and dividend income	$	63,220	$	56,904	$	54,611	$	55,400	$	54,607		11.1	%		15.8	%

Interest on deposits		2,457		2,013		2,236		2,466		3,003		22.1	%		-18.2	%
Interest on borrowings		370		337		364		409		447		9.8	%		-17.2	%
Interest on subordinated debentures		1,349		3,598		2,515		2,545		1,585		-62.5	%		-14.9	%
Total interest expense		4,176		5,948		5,115		5,420		5,035		-29.8	%		-17.1	%
Net interest income	$	59,044	$	50,956	$	49,496	$	49,980	$	49,572		15.9	%		19.1	%

Net interest margin (taxable-equivalent) was 3.55% for the second quarter, up 45 basis points from the first quarter. The improvement was due to a combination of factors including lower subordinated debt costs, an increase in loan yields due to a shift in the composition of average loans together with a generally higher level of interest rates, and a significant decline in lower-yielding interest-bearing deposits held at other banks.

The yield on loans for the second quarter of 2022 increased 13 basis points to 4.31% from 4.18% for the first quarter of 2022 as average loans for the quarter increased 6.5% and average commercial and industrial loans grew to 12.7% of the average loan portfolio from 11.1%. Average interest-earning assets for the second quarter remained relatively unchanged sequentially at $6.67 billion: however, average interest-bearing deposits in other banks fell 72.4% quarter-over-quarter to $136.5 million from $494.9 million.

The cost of interest-bearing deposits increased five basis points to 0.31% for the second quarter compared with 0.26% for the previous quarter. Interest expense on subordinated debentures fell to $1.3 million for the second quarter from $3.6 million for the first quarter primarily due to the redemption of the 2027 Subordinated Notes and the related $1.1 million charge for unamortized debt issuance costs.


	For the Three Months Ended(in thousands)										Percentage Change
	Jun 30,		Mar 31,		Dec 31,		Sep 30,		Jun 30,		Q2-22			Q2-22
Average Earning Assets and Interest-bearing Liabilities		2022		2022		2021		2021		2021	vs. Q1-22			vs. Q2-21
Loans receivable⁽¹⁾	$	5,572,504	$	5,231,672	$	4,896,952	$	4,684,570	$	4,753,297		6.5	%		17.2	%
Securities⁽²⁾		945,291		930,505		914,148		878,866		812,805		1.6	%		16.3	%
FHLB stock		16,385		16,385		16,385		16,385		16,385		0.0	%		0.0	%
Interest-bearing deposits in other banks		136,473		494,887		802,901		872,783		659,934		-72.4	%		-79.3	%
Average interest-earning assets	$	6,670,653	$	6,673,449	$	6,630,386	$	6,452,604	$	6,242,421		-0.0	%		6.9	%

Demand: interest-bearing	$	122,771	$	124,892	$	122,602	$	115,233	$	112,252		-1.7	%		9.4	%
Money market and savings		2,139,488		2,106,008		2,078,659		2,033,876		2,032,102		1.6	%		5.3	%
Time deposits		894,345		937,044		1,013,681		1,061,359		1,136,903		-4.6	%		-21.3	%
Average interest-bearing deposits		3,156,604		3,167,944		3,214,942		3,210,468		3,281,257		-0.4	%		-3.8	%
Borrowings		140,245		130,556		137,500		143,750		150,091		7.4	%		-6.6	%
Subordinated debentures		129,029		213,171		214,899		163,340		119,170		-39.5	%		8.3	%
Average interest-bearing liabilities	$	3,425,878	$	3,511,671	$	3,567,341	$	3,517,558	$	3,550,518		-2.4	%		-3.5	%

Average Noninterest Bearing Deposits
Demand deposits - noninterest bearing	$	2,716,297	$	2,634,398	$	2,561,297	$	2,444,759	$	2,223,172		3.1	%		22.2	%

⁽¹⁾Includes loans held for sale.
⁽²⁾Amounts calculated on a fully taxable equivalent basis using the federal tax rate in effect for the periods presented.


	For the Three Months Ended															Amount Change
	Jun 30,			Mar 31,			Dec 31,			Sep 30,			Jun 30,			Q2-22		Q2-22
Average Yields and Rates		2022			2022			2021			2021			2021		vs. Q1-22		vs. Q2-21
Loans receivable⁽¹⁾		4.31	%		4.18	%		4.23	%		4.49	%		4.45	%		0.13		-0.14
Securities ⁽²⁾		1.27	%		1.11	%		0.83	%		0.87	%		0.69	%		0.16		0.58
FHLB stock		5.93	%		6.14	%		6.00	%		5.93	%		5.93	%		-0.21		0.00
Interest-bearing deposits in other banks		0.57	%		0.18	%		0.15	%		0.15	%		0.11	%		0.39		0.46
Interest-earning assets		3.80	%		3.46	%		3.27	%		3.41	%		3.51	%		0.34		0.29

Interest-bearing deposits		0.31	%		0.26	%		0.28	%		0.30	%		0.37	%		0.05		-0.06
Borrowings		1.10	%		1.05	%		1.05	%		1.13	%		1.19	%		0.05		-0.09
Subordinated debentures		4.14	%		6.75	%		4.68	%		6.23	%		5.32	%		-2.61		-1.18
Interest-bearing liabilities		0.49	%		0.69	%		0.57	%		0.61	%		0.57	%		-0.20		-0.08

Net interest margin (taxable equivalent basis)		3.55	%		3.10	%		2.96	%		3.07	%		3.19	%		0.45		0.36

Cost of deposits		0.17	%		0.14	%		0.15	%		0.17	%		0.22	%		0.03		-0.05

⁽¹⁾Includes loans held for sale.
⁽²⁾Amounts calculated on a fully taxable equivalent basis using the federal tax rate in effect for the periods presented.

For the second quarter of 2022, Hanmi recorded a $1.6 million credit loss expense comprised of a $1.6 million provision for loan losses and a $45,000 negative provision for off-balance sheet items. For the first quarter of 2022, the Company recorded a $1.4 million recovery of credit loss expense comprised of a $1.1 million negative provision for loan losses and a $0.3 million negative provision for off-balance sheet items.

Second quarter 2022 noninterest income increased to $9.3 million from $8.5 million for the first quarter of 2022 primarily due to a $0.3 million increase in gains on the sale of SBA 7(a) loans, a $0.3 million increase in trade finance and other service charges and fees, and a $0.3 million increase in other operating income. The volume of SBA loans sold in the second quarter increased 41.5% to $41.9 million from $29.6 million in the first quarter while trade premiums declined to 7.97% for the second quarter from 9.85% for the first quarter.


	For the Three Months Ended(in thousands)											Percentage Change
	Jun 30,		Mar 31,		Dec 31,			Sep 30,		Jun 30,		Q2-22			Q2-22
Noninterest Income		2022		2022		2021			2021		2021	vs. Q1-22			vs. Q2-21
Service charges on deposit accounts	$	2,875	$	2,875	$	3,007		$	3,437	$	2,344		0.0	%		22.7	%
Trade finance and other service charges and fees		1,416		1,142		1,160			1,188		1,259		24.0	%		12.5	%
Servicing income		663		734		666			768		540		-9.7	%		22.8	%
Bank-owned life insurance income		246		244		252			251		252		0.8	%		-2.4	%
All other operating income		1,336		1,004		1,017			978		908		33.1	%		47.1	%
Service charges, fees & other		6,536		5,999		6,102			6,622		5,303		9.0	%		23.3	%

Gain on sale of SBA loans		2,774		2,521		3,791			5,842		3,508		10.0	%		-20.9	%
Net gain (loss) on sales of securities		-		-		(598	)		-		-		0.0	%		0.0	%
Gain (loss) on sale of bank premises		-		-		-			45		-		0.0	%		0.0	%
Legal settlement		-		-		-			-		75		0.0	%		-100.0	%
Total noninterest income	$	9,310	$	8,520	$	9,295		$	12,509	$	8,886		9.3	%		4.8	%

Noninterest expense decreased slightly to $31.5 million for the second quarter of 2022 from $31.7 million for the first quarter. Salaries and employee benefits expense increased by $1.1 million reflecting annual merit increases and higher estimated incentive compensation for 2022 loan production. Offsetting this effect was a $0.2 million decline in professional fees, a $0.2 million decline in advertising and promotion expense, and a $0.7 million decrease in other operating expenses. The efficiency ratio improved to 46.05% for the second quarter from 53.29% for the prior quarter.


	For the Three Months Ended(in thousands)														Percentage Change
	Jun 30,		Mar 31,			Dec 31,			Sep 30,			Jun 30,			Q2-22			Q2-22
		2022		2022			2021			2021			2021		vs. Q1-22			vs. Q2-21
Noninterest Expense
Salaries and employee benefits	$	18,779	$	17,717		$	18,644		$	18,795		$	18,302			6.0	%		2.6	%
Occupancy and equipment		4,597		4,646			4,840			5,037			4,602			-1.1	%		-0.1	%
Data processing		3,114		3,236			3,228			2,934			2,915			-3.8	%		6.8	%
Professional fees		1,231		1,430			1,443			1,263			1,413			-13.9	%		-12.9	%
Supplies and communication		581		665			795			741			733			-12.6	%		-20.7	%
Advertising and promotion		660		817			964			953			374			-19.2	%		76.5	%
All other operating expenses		2,463		3,186			1,980			2,906			2,607			-22.7	%		-5.5	%
Subtotal		31,425		31,697			31,894			32,629			30,946			-0.9	%		1.5	%

Other real estate owned expense (income)		50		12			-			23			(47	)		-316.7	%		206.4	%
Repossessed personal property expense (income)		-		(17	)		(258	)		(150	)		(116	)		100.0	%		100.0	%
Total noninterest expense	$	31,475	$	31,692		$	31,636		$	32,502		$	30,783			-0.7	%		2.2	%

Hanmi recorded a provision for income taxes of $10.2 million for the second quarter of 2022, representing an effective tax rate of 29.0%, compared with $8.5 million, also representing an effective tax rate of 29.0% for the first quarter.

Financial Position
Total assets at June 30, 2022 increased 3.2%, or $218.9 million, to $6.96 billion from $6.74 billion at March 31, 2022. The increase reflects the 3.4%, or $196.6 million, growth in deposits as well as the $20.0 million increase in borrowings.

Loans receivable, before the allowance for credit losses, were $5.66 billion at June 30, 2022, up 6.0% from $5.34 billion at March 31, 2022. Loans held for sale, representing the guaranteed portion of SBA 7(a) loans, were $18.5 million at the end of the second quarter of 2022 compared with $15.6 million at the end of the first quarter.


	As of (in thousands)															Percentage Change
	Jun 30,			Mar 31,			Dec 31,			Sep 30,			Jun 30,			Q2-22			Q2-22
		2022			2022			2021			2021			2021		vs. Q1-22			vs. Q2-21
Loan Portfolio
Commercial real estate loans	$	3,829,656		$	3,771,453		$	3,701,864		$	3,528,506		$	3,452,014			1.5	%		10.9	%
Residential/consumer loans		521,576			432,805			400,548			354,860			348,730			20.5	%		49.6	%
Commercial and industrial loans		766,813			633,107			561,830			516,357			587,729			21.1	%		30.5	%
Leases		537,358			500,135			487,299			459,142			431,619			7.4	%		24.5	%
Loans receivable		5,655,403			5,337,500			5,151,541			4,858,865			4,820,092			6.0	%		17.3	%
Loans held for sale		18,528			15,617			13,342			17,881			36,030			18.6	%		-48.6	%
Total	$	5,673,931		$	5,353,117		$	5,164,883		$	4,876,746		$	4,856,122			6.0	%		16.8	%


	As of
	Jun 30,			Mar 31,			Dec 31,			Sep 30,			Jun 30,
		2022			2022			2021			2021			2021
Composition of Loan Portfolio
Commercial real estate loans		67.5	%		70.5	%		71.6	%		72.3	%		71.1	%
Residential/consumer loans		9.2	%		8.1	%		7.8	%		7.3	%		7.2	%
Commercial and industrial loans		13.5	%		11.8	%		10.9	%		10.6	%		12.1	%
Leases		9.5	%		9.3	%		9.4	%		9.4	%		8.9	%
Loans receivable		99.7	%		99.7	%		99.7	%		99.6	%		99.3	%
Loans held for sale		0.3	%		0.3	%		0.3	%		0.4	%		0.7	%
Total		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%

New loan production was a record $642.2 million for the second quarter at an average rate of 4.35% while $230.5 million of loans paid-off during the quarter at an average rate of 4.43%.

Commercial real estate loan production for the second quarter was $271.0 million. Commercial and industrial loan production was $96.2 million, SBA loan production was $67.9 million, equipment finance lease production was $95.4 million and residential mortgage loan production was $111.8 million. The strong loan growth for the second quarter was supported by the increase in core deposits, a reduction in excess liquidity (cash and due from banks), and to a lesser extent an increase in borrowings.

	For the Three Months Ended (in thousands)
	Jun 30,			Mar 31,			Dec 31,			Sep 30,			Jun 30,
		2022			2022			2021			2021			2021
New Loan Production
Commercial real estate loans	$	271,006		$	233,295		$	291,543		$	214,380		$	186,136
Commercial and industrial loans		96,187			98,432			116,365			114,263			99,429
SBA loans		67,900			42,632			47,397			46,264			42,560
Leases receivable		95,371			71,487			83,813			83,642			70,923
Residential/consumer loans		111,766			61,023			85,966			41,497			66,581
subtotal		642,230			506,869			625,084			500,046			465,629


Payoffs		(230,536	)		(181,026	)		(152,134	)		(291,686	)		(264,822	)
Amortization		(94,543	)		(96,852	)		(90,358	)		(63,435	)		(90,348	)
Loan sales		(41,937	)		(29,577	)		(41,274	)		(65,253	)		(35,760	)
Net line utilization		43,295			(12,620	)		(48,203	)		(39,941	)		(70,287	)
Charge-offs & OREO		(606	)		(835	)		(439	)		(958	)		(1,471	)

Loans receivable-beginning balance		5,337,500			5,151,541			4,858,865			4,820,092			4,817,151
Loans receivable-ending balance	$	5,655,403		$	5,337,500		$	5,151,541		$	4,858,865		$	4,820,092

Deposits were $5.98 billion at the end of the second quarter of 2022, up $196.2 million, or 3.4%, from $5.78 billion at the end of the preceding quarter. The change was primarily driven by a $104.0 million increase in noninterest-bearing demand deposits, a $21.2 million increase in money market and savings deposits and a $74.3 million increase in time deposits. Noninterest-bearing demand deposits represented 46.5% of total deposits at June 30, 2022 and the loan-to-deposit ratio was 94.6%.


	As of(in thousands)															Percentage Change
	Jun 30,			Mar 31,			Dec 31,			Sep 30,			Jun 30,			Q2-22			Q2-22
		2022			2022			2021			2021			2021		vs. Q1-22			vs. Q2-21
Deposit Portfolio
Demand: noninterest-bearing	$	2,782,737		$	2,678,726		$	2,574,517		$	2,548,591		$	2,354,671			3.9	%		18.2	%
Demand: interest-bearing		123,614			126,907			125,183			118,334			113,892			-2.6	%		8.5	%
Money market and savings		2,102,161			2,080,969			2,099,381			2,033,000			2,045,143			1.0	%		2.8	%
Time deposits		970,878			896,568			987,188			1,029,611			1,116,124			8.3	%		-13.0	%
Total deposits	$	5,979,390		$	5,783,170		$	5,786,269		$	5,729,536		$	5,629,830			3.4	%		6.2	%


	As of
	Jun 30,			Mar 31,			Dec 31,			Sep 30,			Jun 30,
		2022			2022			2021			2021			2021
Composition of Deposit Portfolio
Demand: noninterest-bearing		46.5	%		46.3	%		44.4	%		44.4	%		41.9	%
Demand: interest-bearing		2.1	%		2.2	%		2.2	%		2.1	%		2.0	%
Money market and savings		35.2	%		36.0	%		36.3	%		35.5	%		36.3	%
Time deposits		16.2	%		15.5	%		17.1	%		18.0	%		19.8	%
Total deposits		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%

Stockholders’ equity at June 30, 2022 was $618.3 million, compared with $621.5 million at March 31, 2022. The sequential decline was primarily due to the $21.7 million unrealized after-tax loss because of changes in the value of the securities portfolio resulting from increases in interest rates during the quarter which outpaced the $18.3 million contribution of second quarter net income less dividends. Tangible common stockholders’ equity was $607.0 million, or 8.74% of tangible assets, at June 30, 2022, compared with $610.1 million, or 9.07% of tangible assets at the end of the first quarter. Tangible book value per share decreased to $19.91 at June 30, 2022 from $20.02 at the end of the prior quarter.

Hanmi and the Bank exceeded the minimum regulatory capital requirements and the Bank continues to exceed the minimum for the “well capitalized” category. At June 30, 2022, Hanmi’s preliminary Common equity Tier 1 capital ratio was 11.07% and its Total risk-based capital ratio was 14.32% compared with 11.34% and 14.73%, respectively, at the end of the first quarter of 2022.

	As of															Amount Change
	Jun 30,			Mar 31,			Dec 31,			Sep 30,			Jun 30,			Q2-22		Q2-22
		2022			2022			2021			2021			2021		vs. Q1-22		vs. Q2-21
Regulatory Capital ratios⁽¹⁾
Hanmi Financial
Total risk-based capital		14.32	%		14.73	%		16.57	%		17.18	%		15.53	%		-0.41		-1.21
Tier 1 risk-based capital		11.42	%		11.71	%		11.93	%		12.18	%		12.30	%		-0.29		-0.88
Common equity tier 1 capital		11.07	%		11.34	%		11.55	%		11.78	%		11.88	%		-0.27		-0.81
Tier 1 leverage capital ratio		9.94	%		9.70	%		9.63	%		9.50	%		9.57	%		0.24		0.37
Hanmi Bank
Total risk-based capital		13.70	%		14.19	%		14.70	%		15.17	%		15.25	%		-0.49		-1.55
Tier 1 risk-based capital		12.64	%		13.09	%		13.59	%		13.91	%		13.99	%		-0.45		-1.35
Common equity tier 1 capital		12.64	%		13.09	%		13.59	%		13.91	%		13.99	%		-0.45		-1.35
Tier 1 leverage capital ratio		11.00	%		10.84	%		10.96	%		10.86	%		10.89	%		0.16		0.11

⁽¹⁾Preliminary ratios for June 30, 2022

Asset Quality
Loans and leases 30 to 89 days past due and still accruing were 0.07% of loans and leases at the end of the second quarter of 2022, compared with 0.10% at the end of the prior quarter.

Special mention loans were $80.5 million at the end of the second quarter, down from $141.0 million at March 31, 2022. The quarter-over-quarter change included increases from downgrades of pass loans of $1.9 million and upgrades from classified loans of $0.7 million. Reductions included upgrades to pass of $57.7 million, payoffs and paydowns of $5.3 million and $0.1 million of downgrades to classified.

Classified loans were $53.0 million at June 30, 2022, down from $57.4 million at the end of the first quarter.

Nonperforming loans were $11.0 million at June 30, 2022, or 0.20% of loans, down from $11.5 million at the end of the first quarter, or 0.21% of the portfolio.

Nonperforming assets were $11.7 million at the end of the second quarter of 2022, or 0.17% of total assets, down from $12.1 million, or 0.18% of assets, at the end of the prior quarter.

Gross charge-offs for the second quarter of 2022 were $0.6 million, compared with $0.8 million for the preceding quarter. Recoveries of previously charged-off loans for the second quarter of 2022 were $0.5 million, compared with $0.9 million for the preceding quarter. As a result, there were net charge-offs of $0.1 million for the second quarter of 2022, compared with net recoveries of $0.1 million for the prior quarter. For the second quarter of 2022, net charge-offs represented 0.01% of average loans on an annualized basis, compared with net recoveries of 0.01% of average loans for the first quarter on an annualized basis.

The allowance for credit losses was $73.1 million at June 30, 2022, up $1.6 million from $71.5 million at March 31, 2022. The ratio of the allowance for credit losses to loans however declined to 1.29% at the end of the second quarter on essentially higher loan balances. Specific allowances for loans declined $0.2 million while quantitative and qualitative allowances increased $1.8 million principally on higher loan balances. Qualitative loss factors remained essentially unchanged; however, they now begin to reflect the uncertainties of future economic conditions in a rising interest rate environment.


	As of or for the Three Months Ended(in thousands)															Amount Change
	Jun 30,			Mar 31,			Dec 31,			Sep 30,			Jun 30,			Q2-22			Q2-22
		2022			2022			2021			2021			2021		vs. Q1-22			vs. Q2-21
Asset Quality Data and Ratios

Delinquent loans:
Loans, 30 to 89 days past due and still accruing	$	4,174		$	5,493		$	5,881		$	6,017		$	4,332		$	(1,319	)	$	(158	)
Delinquent loans to total loans		0.07	%		0.10	%		0.11	%		0.12	%		0.09	%		-0.03			-0.02

Criticized loans:
Special mention	$	80,453		$	140,958		$	95,295		$	130,564		$	121,826		$	(60,505	)	$	(41,373	)
Classified		53,007			57,402			60,632			82,436			110,120			(4,395	)		(57,113	)
Total criticized loans	$	133,460		$	198,360		$	155,927		$	213,000		$	231,946		$	(64,900	)	$	(98,486	)

Nonperforming assets:
Nonaccrual loans	$	11,044		$	11,470		$	13,360		$	21,223		$	39,573		$	(426	)	$	(28,529	)
Loans 90 days or more past due and still accruing		-			-			-			13			12,446			-			(12,446	)
Nonperforming loans		11,044			11,470			13,360			21,236			52,019			(426	)		(40,975	)
Other real estate owned, net		675			675			675			675			712			-			(37	)
Nonperforming assets	$	11,719		$	12,145		$	14,035		$	21,911		$	52,731		$	(426	)	$	(41,012	)

Nonperforming loans to total loans		0.20	%		0.21	%		0.26	%		0.44	%		1.08	%
Nonperforming assets to assets		0.17	%		0.18	%		0.20	%		0.32	%		0.80	%

Allowance for credit losses:
Balance at beginning of period	$	71,512		$	72,557		$	76,613		$	83,372		$	88,392
Credit loss expense (recovery) on loans		1,640			(1,147	)		(13,375	)		(7,623	)		(4,112	)
Net loan (charge-offs) recoveries		(85	)		102			9,319			864			(908	)
Balance at end of period	$	73,067		$	71,512		$	72,557		$	76,613		$	83,372

Net loan charge-offs (recoveries) to average loans⁽¹⁾		0.01	%		-0.01	%		-0.76	%		-0.07	%		0.08	%
Allowance for credit losses to loans		1.29	%		1.34	%		1.41	%		1.58	%		1.73	%

Allowance for credit losses related to off-balance sheet items:
Balance at beginning of period	$	2,358		$	2,586		$	4,851		$	3,643		$	2,342
Credit loss expense (recovery) on off-balance sheet items		(45	)		(228	)		(2,265	)		1,208			1,301
Balance at end of period	$	2,313		$	2,358		$	2,586		$	4,851		$	3,643

Unused commitments to extend credit	$	613,804		$	626,615		$	626,474		$	536,149		$	552,773

Allowance for Losses on Accrued Interest Receivable:
Balance at beginning of period		-			-		$	311		$	680		$	1,196
Interest reversal for loans placed on nonaccrual		-			-			-			-			-
Credit loss expense (recovery) on interest accrued on CARES Act modifications		-			-			(311	)		(369	)		(516	)
Balance at end of period		-			-		$	-		$	311		$	680

⁽¹⁾Annualized

Corporate Developments
On April 28, 2022, Hanmi’s Board of Directors declared a cash dividend on its common stock for the 2022 second quarter of $0.22 per share. The dividend was paid on May 25, 2022, to stockholders of record as of the close of business on May 9, 2022.

Earnings Conference Call
Hanmi Bank will host its second quarter 2022 earnings conference call today, July 26, 2022 at 2:00 p.m. PST (5:00 p.m. EST) to discuss these results. This call will also be webcast. To access the event the call, please dial 1-877-407-9039 before 2:00 p.m. PST, using access code HANMI. To listen to the call online, either live or archived, please visit Hanmi’s Investor Relations website at www.hanmi.com.

About Hanmi Financial Corporation
Headquartered in Los Angeles, California, Hanmi Financial Corporation owns Hanmi Bank, which serves multi-ethnic communities through its network of 35 full-service branches and eight loan production offices in California, Texas, Illinois, Virginia, New Jersey, New York, Colorado, Washington and Georgia. Hanmi Bank specializes in real estate, commercial, SBA and trade finance lending to small and middle market businesses. Additional information is available at www.hanmi.com.

Forward-Looking Statements
This press release contains forward-looking statements, which are included in accordance with the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact are “forward–looking statements” for purposes of federal and state securities laws, including, but not limited to, statements about our anticipated future operating and financial performance, financial position and liquidity, business strategies, regulatory and competitive outlook, investment and expenditure plans, capital and financing needs and availability, plans and objectives of management for future operations, developments regarding our capital and strategic plans, and other similar forecasts and statements of expectation and statements of assumption underlying any of the foregoing. 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 our forward-looking statements to be reasonable, we cannot guarantee future results, levels of activity, performance or achievements.

Forward-looking 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 statements. These factors include the following:

a failure to maintain adequate levels of capital and liquidity to support our operations;
the effect of potential future supervisory action against us or Hanmi Bank;
the effect of our rating under the Community Reinvestment Act and our ability to address any issues raised in our regulatory exams;
general economic and business conditions internationally, nationally and in those areas in which we operate;
volatility and deterioration in the credit and equity markets;
changes in consumer spending, borrowing and savings habits;
availability of capital from private and government sources;
demographic changes;
competition for loans and deposits and failure to attract or retain loans and deposits;
inflation and fluctuations in interest rates and a decline in the level of our interest rate spread;
the current or anticipated impact of military conflict, terrorism or other geopolitical events;
risks of natural disasters;
legal proceedings and litigation brought against us;
a failure in or breach of our operational or security systems or infrastructure, including cyberattacks;
the failure to maintain current technologies;
the inability to successfully implement future information technology enhancements;
difficult business and economic conditions that can adversely affect our industry and business, including competition, fraudulent activity and negative publicity;
risks associated with Small Business Administration loans;
failure to attract or retain key employees;
our ability to access cost-effective funding;
fluctuations in real estate values;
changes in accounting policies and practices;
changes in governmental regulation, including, but not limited to, any increase in FDIC insurance premiums;
the continuing impact of the COVID-19 pandemic on our business and results of operation;
the ability of Hanmi Bank to make distributions to Hanmi Financial Corporation, which is restricted by certain factors, including Hanmi Bank’s retained earnings, net income, prior distributions made, and certain other financial tests;
strategic transactions we may enter into;
the adequacy of our allowance for credit losses;
our credit quality and the effect of credit quality on our credit losses expense and allowance for credit losses;
changes in the financial performance and/or condition of our borrowers and the ability of our borrowers to perform under the terms of their loans and other terms of credit agreements;
our ability to control expenses;
changes in securities markets; and
risks as it relates to cyber security against our information technology and those of our third-party providers and vendors.

In addition, we set forth certain risks in our reports filed with the U.S. Securities and Exchange Commission, including, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2021, our Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K that we will file hereafter, which could cause actual results to differ from those projected. We undertake no obligation to update such forward-looking statements except as required by law.

Investor Contacts:
Romolo (Ron) Santarosa
Senior Executive Vice President & Chief Financial Officer
213-427-5636

Larry Clark, CFA
Investor Relations
Financial Profiles, Inc.
lclark@finprofiles.com
310-622-8223

Hanmi Financial Corporation and Subsidiaries Consolidated Balance Sheets (Unaudited) (Dollars in thousands)

	June 30,			March 31,			Percentage		June 30,			Percentage
		2022			2022		Change			2021		Change
Assets
Cash and due from banks	$	217,237		$	312,491		-30.5	%	$	697,789		-68.9	%
Securities available for sale, at fair value		860,221			876,980		-1.9	%		862,119		-0.2	%
Loans held for sale, at the lower of cost or fair value		18,528			15,617		18.6	%		36,030		-48.6	%
Loans receivable, net of allowance for credit losses		5,582,335			5,265,988		6.0	%		4,736,720		17.9	%
Accrued interest receivable		14,044			12,289		14.3	%		14,397		-2.5	%
Premises and equipment, net		24,207			24,410		-0.8	%		26,225		-7.7	%
Customers' liability on acceptances		616			182		238.5	%		1,907		-67.7	%
Servicing assets		7,353			7,202		2.1	%		6,199		18.6	%
Goodwill and other intangible assets, net		11,310			11,353		-0.4	%		11,504		-1.7	%
Federal Home Loan Bank ("FHLB") stock, at cost		16,385			16,385		0.0	%		16,385		0.0	%
Bank-owned life insurance		55,395			55,149		0.4	%		54,402		1.8	%
Prepaid expenses and other assets		148,337			139,006		6.7	%		115,179		28.8	%
Total assets	$	6,955,968		$	6,737,052		3.2	%	$	6,578,856		5.7	%

Liabilities and Stockholders' Equity
Liabilities:
Deposits:
Noninterest-bearing	$	2,782,737		$	2,678,726		3.9	%	$	2,354,671		18.2	%
Interest-bearing		3,196,653			3,104,444		3.0	%		3,275,159		-2.4	%
Total deposits		5,979,390			5,783,170		3.4	%		5,629,830		6.2	%
Accrued interest payable		986			966		2.1	%		1,855		-46.8	%
Bank's liability on acceptances		616			182		238.5	%		1,907		-67.7	%
Borrowings		145,000			125,000		16.0	%		150,000		-3.3	%
Subordinated debentures		129,113			128,967		0.1	%		119,243		8.3	%
Accrued expenses and other liabilities		82,567			77,315		6.8	%		73,044		13.0	%
Total liabilities		6,337,672			6,115,600		3.6	%		5,975,879		6.1	%

Stockholders' equity:
Common stock		33			33		0.0	%		33		0.0	%
Additional paid-in capital		582,018			581,337		0.1	%		579,595		0.4	%
Accumulated other comprehensive income		(66,568	)		(44,819	)	-48.5	%		(2,859	)	-2228.3	%
Retained earnings		229,135			210,788		8.7	%		146,651		56.2	%
Less treasury stock		(126,322	)		(125,887	)	-0.3	%		(120,443	)	-4.9	%
Total stockholders' equity		618,296			621,452		-0.5	%		602,977		2.5	%
Total liabilities and stockholders' equity	$	6,955,968		$	6,737,052		3.2	%	$	6,578,856		5.7	%

Hanmi Financial Corporation and Subsidiaries Consolidated Statements of Income (Unaudited) (Dollars in thousands, except share and per share data)

	Three Months Ended
	June 30,		March 31,			Percentage		June 30,			Percentage
		2022		2022		Change			2021		Change
Interest and dividend income:
Interest and fees on loans receivable	$	59,855	$	53,924		11.0	%	$	52,785		13.4	%
Interest on securities		2,930		2,516		16.5	%		1,404		108.7	%
Dividends on FHLB stock		242		248		-2.4	%		242		0.0	%
Interest on deposits in other banks		193		216		-10.6	%		176		9.7	%
Total interest and dividend income		63,220		56,904		11.1	%		54,607		15.8	%
Interest expense:
Interest on deposits		2,457		2,013		22.1	%		3,003		-18.2	%
Interest on borrowings		370		337		9.8	%		447		-17.2	%
Interest on subordinated debentures		1,349		3,598		-62.5	%		1,585		-14.9	%
Total interest expense		4,176		5,948		-29.8	%		5,035		-17.1	%
Net interest income before credit loss expense		59,044		50,956		15.9	%		49,572		19.1	%
Credit loss expense (recovery)		1,596		(1,375	)	216.1	%		(3,327	)	-148.0	%
Net interest income after credit loss expense		57,448		52,331		9.8	%		52,899		8.6	%
Noninterest income:
Service charges on deposit accounts		2,875		2,875		0.0	%		2,344		22.7	%
Trade finance and other service charges and fees		1,416		1,142		24.0	%		1,259		12.5	%
Gain on sale of Small Business Administration ("SBA") loans		2,774		2,521		10.0	%		3,508		-20.9	%
Other operating income		2,245		1,982		13.3	%		1,775		26.5	%
Total noninterest income		9,310		8,520		9.3	%		8,886		4.8	%
Noninterest expense:
Salaries and employee benefits		18,779		17,717		6.0	%		18,302		2.6	%
Occupancy and equipment		4,597		4,646		-1.1	%		4,602		-0.1	%
Data processing		3,114		3,236		-3.8	%		2,915		6.8	%
Professional fees		1,231		1,430		-13.9	%		1,413		-12.9	%
Supplies and communications		581		665		-12.6	%		733		-20.7	%
Advertising and promotion		660		817		-19.2	%		374		76.5	%
Other operating expenses		2,513		3,181		-21.0	%		2,444		2.8	%
Total noninterest expense		31,475		31,692		-0.7	%		30,783		2.2	%
Income before tax		35,283		29,159		21.0	%		31,002		13.8	%
Income tax expense		10,233		8,464		20.9	%		8,880		15.2	%
Net income	$	25,050	$	20,695		21.0	%	$	22,122		13.2	%

Basic earnings per share:	$	0.82	$	0.68				$	0.72
Diluted earnings per share:	$	0.82	$	0.68				$	0.72

Weighted-average shares outstanding:
Basic		30,296,897		30,254,212					30,442,993
Diluted		30,412,348		30,377,580					30,520,456
Common shares outstanding		30,482,990		30,468,458					30,697,652

Hanmi Financial Corporation and Subsidiaries Consolidated Statements of Income (Unaudited)
(Dollars in thousands, except share and per share data)
	Six Months Ended
	June 30,		June 30,			Percentage
		2022		2021		Change
Interest and dividend income:
Interest and fees on loans receivable	$	113,779	$	103,400		10.0	%
Interest on securities		5,447		2,544		114.1	%
Dividends on FHLB stock		490		448		9.4	%
Interest on deposits in other banks		408		272		50.0	%
Total interest and dividend income		120,124		106,664		12.6	%
Interest expense:
Interest on deposits		4,470		6,953		-35.7	%
Interest on borrowings		707		933		-24.2	%
Interest on subordinated debentures		4,947		3,204		54.4	%
Total interest expense		10,124		11,090		-8.7	%
Net interest income before credit loss expense		110,000		95,574		15.1	%
Credit loss expense (recovery)		220		(1,217	)	-118.1	%
Net interest income after credit loss expense		109,780		96,791		13.4	%
Noninterest income:
Service charges on deposit accounts		5,750		4,599		25.0	%
Trade finance and other service charges and fees		2,558		2,280		12.2	%
Gain on sale of Small Business Administration ("SBA") loans		5,295		7,633		-30.6	%
Other operating income		4,226		4,081		3.6	%
Total noninterest income		17,829		18,593		-4.1	%
Noninterest expense:
Salaries and employee benefits		36,496		35,122		3.9	%
Occupancy and equipment		9,243		9,198		0.5	%
Data processing		6,351		5,841		8.7	%
Professional fees		2,661		2,860		-7.0	%
Supplies and communications		1,245		1,489		-16.4	%
Advertising and promotion		1,477		732		101.8	%
Other operating expenses		5,694		5,074		12.2	%
Total noninterest expense		63,167		60,316		4.7	%
Income before tax		64,442		55,068		17.0	%
Income tax expense		18,697		16,386		14.1	%
Net income	$	45,745	$	38,682		18.3	%

Basic earnings per share:	$	1.50	$	1.26
Diluted earnings per share:	$	1.50	$	1.26

Weighted-average shares outstanding:
Basic		30,271,761		30,452,320
Diluted		30,391,273		30,526,120
Common shares outstanding		30,482,990		30,697,652

Hanmi Financial Corporation and Subsidiaries Average Balance, Average Yield Earned, and Average Rate Paid (Unaudited) (Dollars in thousands)

	Three Months Ended
	June 30, 2022							March 31, 2022							June 30, 2021
				Interest		Average					Interest		Average					Interest		Average
	Average			Income /		Yield /		Average			Income /		Yield /		Average			Income /		Yield /
	Balance			Expense		Rate		Balance			Expense		Rate		Balance			Expense		Rate
Assets
Interest-earning assets:
Loans receivable⁽¹⁾	$	5,572,504		$	59,855	4.31	%	$	5,231,672		$	53,924	4.18	%	$	4,753,297		$	52,787	4.45	%
Securities⁽²⁾		945,291			2,930	1.27	%		930,505			2,586	1.11	%		812,805			1,404	0.69	%
FHLB stock		16,385			242	5.93	%		16,385			248	6.14	%		16,385			242	5.93	%
Interest-bearing deposits in other banks		136,473			193	0.57	%		494,887			216	0.18	%		659,934			176	0.11	%
Total interest-earning assets		6,670,653			63,220	3.80	%		6,673,449			56,974	3.46	%		6,242,421			54,609	3.51	%

Noninterest-earning assets:
Cash and due from banks		67,859							62,968							61,560
Allowance for credit losses		(73,896	)						(73,177	)						(88,049	)
Other assets		255,095							229,952							220,779

Total assets	$	6,919,711						$	6,893,192						$	6,436,711

Liabilities and Stockholders' Equity
Interest-bearing liabilities:
Deposits:
Demand: interest-bearing	$	122,771		$	18	0.06	%	$	124,892		$	17	0.06	%	$	112,252		$	23	0.08	%
Money market and savings		2,139,488			1,570	0.29	%		2,106,008			1,189	0.23	%		2,032,102			1,298	0.26	%
Time deposits		894,345			869	0.39	%		937,044			807	0.35	%		1,136,903			1,682	0.59	%
Total interest-bearing deposits		3,156,604			2,457	0.31	%		3,167,944			2,013	0.26	%		3,281,257			3,003	0.37	%
Borrowings		140,245			384	1.10	%		130,556			337	1.05	%		150,091			447	1.19	%
Subordinated debentures		129,029			1,335	4.14	%		213,171			3,598	6.75	%		119,170			1,585	5.32	%
Total interest-bearing liabilities		3,425,878			4,176	0.49	%		3,511,671			5,948	0.69	%		3,550,518			5,035	0.57	%

Noninterest-bearing liabilities and equity:
Demand deposits: noninterest-bearing		2,716,297							2,634,398							2,223,172
Other liabilities		104,084							88,367							67,771
Stockholders' equity		673,452							658,756							595,250

Total liabilities and stockholders' equity	$	6,919,711						$	6,893,192						$	6,436,711

Net interest income (tax equivalent basis)				$	59,044						$	51,026						$	49,574

Cost of deposits						0.17	%						0.14	%						0.22	%
Net interest spread (taxable equivalent basis)						3.31	%						2.77	%						2.94	%
Net interest margin (taxable equivalent basis)						3.55	%						3.10	%						3.19	%



⁽¹⁾Includes average loans held for sale
⁽²⁾Income calculated on a fully taxable equivalent basis using the federal tax rate in effect for the periods presented.


Hanmi Financial Corporation and Subsidiaries Average Balance, Average Yield Earned, and Average Rate Paid (Unaudited) (Dollars in thousands)
	Six Months Ended
	June 30, 2022							June 30, 2021
				Interest		Average					Interest		Average
	Average			Income /		Yield /		Average			Income /		Yield /
	Balance			Expense		Rate		Balance			Expense		Rate
Assets
Interest-earning assets:
Loans receivable ⁽¹⁾	$	5,403,029		$	113,779	4.25	%	$	4,798,311		$	103,399	4.35	%
Securities ⁽²⁾		937,939			5,447	1.19	%		793,521			2,544	0.64	%
FHLB stock		16,385			490	6.03	%		16,385			448	5.52	%
Interest-bearing deposits in other banks		314,690			408	0.26	%		528,498			272	0.10	%
Total interest-earning assets		6,672,043			120,124	3.63	%		6,136,715			106,663	3.51	%

Noninterest-earning assets:
Cash and due from banks		65,427							59,127
Allowance for credit losses		(73,538	)						(88,860	)
Other assets		242,593							227,436

Total assets	$	6,906,525						$	6,334,418

Liabilities and Stockholders' Equity
Interest-bearing liabilities:
Deposits:
Demand: interest-bearing	$	123,826		$	35	0.06	%	$	107,642		$	37	0.07	%
Money market and savings		2,122,840			2,758	0.26	%		1,999,737			2,776	0.28	%
Time deposits		915,577			1,677	0.37	%		1,187,427			4,148	0.70	%
Total interest-bearing deposits		3,162,243			4,470	0.29	%		3,294,806			6,961	0.43	%
Borrowings		135,427			726	1.08	%		150,046			923	1.24	%
Subordinated debentures		170,868			4,928	5.77	%		119,105			3,204	5.38	%
Total interest-bearing liabilities		3,468,538			10,124	0.59	%		3,563,957			11,088	0.63	%

Noninterest-bearing liabilities and equity:
Demand deposits: noninterest-bearing		2,675,574							2,107,828
Other liabilities		96,269							74,391
Stockholders' equity		666,144							588,242

Total liabilities and stockholders' equity	$	6,906,525						$	6,334,418

Net interest income (tax equivalent basis)				$	110,000						$	95,575

Cost of deposits						0.15	%						0.26	%
Net interest spread (taxable equivalent basis)						3.04	%						2.88	%
Net interest margin (taxable equivalent basis)						3.32	%						3.14	%


⁽¹⁾Includes average loans held for sale
⁽²⁾Amounts calculated on a fully taxable equivalent basis using the federal tax rate in effect for the periods presented.

Non-GAAP Financial Measures

Tangible Common Equity to Tangible Assets Ratio

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

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

Tangible Common Equity to Tangible Assets Ratio (Unaudited) (In thousands, except share, per share data and ratios)


	June 30,			March 31,			December 31,			September 30,			June 30,
Hanmi Financial Corporation		2022			2022			2021			2021			2021
Assets	$	6,955,968		$	6,737,052		$	6,858,587		$	6,776,533		$	6,578,856
Less goodwill and other intangible assets		(11,310	)		(11,353	)		(11,395	)		(11,450	)		(11,504	)
Tangible assets	$	6,944,658		$	6,725,699		$	6,847,192		$	6,765,083		$	6,567,352

Stockholders' equity ⁽¹⁾	$	618,296		$	621,452		$	643,417		$	619,055		$	602,977
Less goodwill and other intangible assets		(11,310	)		(11,353	)		(11,395	)		(11,450	)		(11,504	)
Tangible stockholders' equity ⁽¹⁾	$	606,986		$	610,099		$	632,022		$	607,605		$	591,473

Stockholders' equity to assets		8.89	%		9.22	%		9.38	%		9.14	%		9.17	%
Tangible common equity to tangible assets⁽¹⁾		8.74	%		9.07	%		9.23	%		8.98	%		9.01	%

Common shares outstanding		30,482,990			30,468,458			30,407,261			30,441,601			30,697,652
Tangible common equity per common share	$	19.91		$	20.02		$	20.79		$	19.96		$	19.27


⁽¹⁾There were no preferred shares outstanding at the periods indicated.

Hanmi Reports Second Quarter 2022 Results

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