EXHIBIT 99.1
HANMI FINANCIAL CORPORATION REPORTS
NET INCOME OF $11.1 MILLION FOR THIRD QUARTER OF 2007
LOS ANGELES, California — November 6, 2007 — Hanmi Financial Corporation (NASDAQ:HAFC), the holding company for Hanmi Bank, reported that for the three months ended September 30, 2007, it earned net income of $11.1 million, a decrease of 27.6 percent compared to net income of $15.3 million for the second quarter of 2007. Earnings per share were $0.23 (diluted), a decrease of 25.8 percent compared to $0.31 per share (diluted) for the second quarter of 2007.
“Our strong loan growth and the opening of our 24th branch during the quarter were overshadowed by higher loan loss provisions and continued margin compression. During the quarter, our loan portfolio increased $164.0 million and we opened a new branch in Rancho Cucamonga, California,” said Sung Won Sohn, Ph.D., President and Chief Executive Officer. “However, our net interest margin decreased from 4.51 percent in the second quarter to 4.26 percent in the third quarter. We expect our margin to continue to experience competitive pressures in the near term and the recent change in the Federal Reserve monetary policy will hurt margins until it is fully reflected in the repricing of our time deposits.”
“The third quarter increase of $5.4 million in the provision for credit losses stems in part from a group of six related business acquisition loans amounting to $3.6 million, some of which have become the subject of litigation that we initiated.”
“In this uncertain economic and financial environment, the asset quality is a serious concern for all lenders. Fortunately, Hanmi’s exposure to the residential market is minimal. The commercial real estate market, about two-thirds of Hanmi’s portfolio, continues to remain healthy. However, in recent quarters, we have experienced higher delinquencies and charge-offs resulting from a more challenging environment for our customers.”
THIRD-QUARTER HIGHLIGHTS
| • | | Net interest income before provision for credit losses was $37.9 million for the third quarter of 2007, compared to $38.6 million for the second quarter of 2007 and $39.7 million for the third quarter of 2006, reflecting a 2.8 percent and 7.3 percent, respectively, sequential increase in average interest-earning assets. Net interest margin for the third quarter of 2007 was 4.26 percent, compared to 4.51 percent for the second quarter of 2007 and 4.79 percent for the third quarter of 2006. |
| |
| • | | The loan portfolio increased by $354.9 million, or 12.4 percent, to $3.22 billion at September 30, 2007, compared to $2.86 billion at December 31, 2006, reflecting continued growth in commercial and industrial loans. |
| |
| • | | Non-performing loans increased by $22.1 million to $44.7 million, or 1.39 percent of the portfolio, at September 30, 2007, compared to $22.6 million, or 0.74 percent of the portfolio, at June 30, 2007. Loans over 30 days delinquent increased from $32.0 million at June 30, 2007 to $55.0 million at September 30, 2007. |
| |
| • | | The provision for credit losses was $8.5 million for the third quarter of 2007, compared to $3.0 million for the second quarter of 2007 and $1.7 million for the third quarter of 2006. |
| |
| • | | The allowance for loan losses was 1.07 percent, 1.05 percent and 0.99 percent of the gross loan portfolio at September 30, 2007, June 30, 2007 and September 30, 2006, respectively. |
| |
| • | | During the third quarter, the Company repurchased 1,004,100 of its shares at a cost of $15.0 million, or $14.90 per share. |
-1-
NET INTEREST INCOME BEFORE PROVISION FOR CREDIT LOSSES
Net interest income before provision for credit losses was $37.9 million for the third quarter of 2007, a decrease of $735,000, or 1.9 percent, compared to $38.6 million for the second quarter of 2007, and a decrease of $1.9 million, or 4.7 percent, compared to $39.7 million for the third quarter of 2006.
The yield on the loan portfolio was 8.44 percent for the third quarter of 2007, a decrease of 24 basis points compared to 8.68 percent for the second quarter of 2007, and a decrease of 45 basis points compared to 8.89 percent for the third quarter of 2006. The yield on investment securities was 4.52 percent for the third quarter of 2007, an increase of 12 basis points compared to 4.40 percent for the second quarter of 2007, and an increase of four basis points compared to 4.48 percent for the third quarter of 2006.
The yield on average interest-earning assets was 8.01 percent for the third quarter of 2007, a decrease of 16 basis points compared to 8.17 percent for the second quarter of 2007, and a decrease of 28 basis points compared to 8.29 percent for the third quarter of 2006. The cost of interest-bearing liabilities was 4.93 percent for the third quarter of 2007, an increase of one basis point compared to 4.92 percent for the second quarter of 2007, and an increase of 20 basis points compared to 4.73 percent for the third quarter of 2006, as the competitive deposit rate environment continued to stabilize.
PROVISION FOR CREDIT LOSSES
The provision for credit losses was $8.5 million for the third quarter of 2007, compared to $3.0 million for the second quarter of 2007 and $1.7 million for the third quarter of 2006. In the third quarter of 2007, net charge-offs were $6.1 million, compared to $2.5 million for the second quarter of 2007 and $656,000 for the third quarter of 2006.
The sequential increase in the provision for credit losses is attributable to an increased migration of loans into more adverse risk rating categories, including a group of six related business acquisition loans amounting to $3.6 million, some of which have become the subject of litigation; an increase of $164.0 million, or 5.4 percent, in the loan portfolio; and a higher rate of increase in non-performing assets, which increased $21.3 million in the third quarter to a balance of $45.0 million at September 30, 2007, compared to an increase of $4.2 million to a balance of $23.7 million at June 30, 2007.
Delinquent loans increased to $55.0 million, or 1.71 percent of gross loans, at September 30, 2007 from $32.0 million, or 1.05 percent of gross loans, at June 30, 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 primarily on the basis of loan classifications and the historical loss experience with similarly situated credits.
NON-INTEREST INCOME
Non-interest income decreased by $1.2 million, or 10.9 percent, to $9.5 million for the third quarter of 2007, compared to $10.7 million for the second quarter of 2007, and increased by $354,000, or 3.9 percent, compared to $9.2 million for the third quarter of 2006. The decrease in non-interest income from the second quarter of 2007 to the third quarter of 2007 is primarily attributable to a $1.2 million decrease in the amount of gain on sales of loans. The increase in non-interest income from the third quarter of 2006 to the third quarter of 2007 is primarily attributable to an increase of $881,000 in insurance commissions, reflecting the acquisitions of two insurance agencies in the first quarter of 2007, and a $226,000 gain on sale of OREO, partially offset by a $877,000 decrease in the amount of gain on sales of loans.
NON-INTEREST EXPENSES
Non-interest expenses decreased by $241,000, or 1.1 percent, to $21.2 million for the third quarter of 2007, compared to $21.5 million for the second quarter of 2007, and increased by $1.4 million, or 7.0 percent, compared to $19.9 million for the third quarter of 2006. Salaries and employee benefits increased by $636,000, or 5.9 percent, sequentially from $10.8 million for the second quarter of 2007 to $11.4 million for the third quarter of 2007 because of the opening of the Rancho Cucamonga branch in August 2007 and increased accruals for incentive compensation.
-2-
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 third quarter of 2007 was 44.85 percent, compared to 43.61 percent for the second quarter of 2007 and 40.61 percent for the third quarter of 2006, in part reflecting the acquisitions of two insurance agencies in the first quarter of 2007 and the opening of the Rancho Cucamonga and Fullerton branches during 2007.
PROVISION FOR INCOME TAXES
The provision for income taxes reflects a 37.2 percent effective tax rate for the third quarter of 2007, compared to a 38.1 percent effective tax rate for the second quarter of 2007 and a 35.7 percent effective tax rate for the third quarter of 2006. Changes in the effective tax rate reflect a relatively stable level of Enterprise Zone and low-income housing tax credits in periods in which there were changes in taxable income.
FINANCIAL POSITION
Total assets were $4.01 billion at September 30, 2007, an increase of $286.4 million, or 7.7 percent, compared to $3.73 billion at December 31, 2006, and an increase of $272.5 million, or 7.3 percent, from the September 30, 2006 balance of $3.74 billion.
At September 30, 2007, net loans totaled $3.19 billion, an increase of $348.0 million, or 12.3 percent, from $2.84 billion at December 31, 2006. Real estate loans increased by $57.7 million, or 5.5 percent, to $1.10 billion at September 30, 2007, compared to $1.04 billion at December 31, 2006, and commercial and industrial loans grew by $306.6 million, or 17.8 percent, to $2.03 billion at September 30, 2007, compared to $1.73 billion at December 31, 2006.
The growth in total assets was funded primarily by an increase in FHLB advances and other borrowings of $192.3 million, up 113.8 percent to $361.3 million at September 30, 2007, compared to $169.0 million at December 31, 2006. In addition, deposits increased $102.8 million, up 3.5 percent to $3.05 billion at September 30, 2007 from $2.94 billion at December 31, 2006. The increase in deposits included increases in time deposits of $100,000 or more of $91.4 million, up 6.6 percent to $1.47 billion, in money market checking accounts of $38.0 million, up 8.7 percent to $476.3 million, and in other time deposits of $16.4 million, up 5.5 percent to $311.9 million, partially offset by decreases in noninterest-bearing demand deposits of $37.8 million, down 5.2 percent to $690.5 million, and in savings accounts of $5.1 million, down 5.1 percent to $94.2 million.
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 $30.8 million to $45.0 million at September 30, 2007 from $14.2 million at December 31, 2006, and increased by $31.5 million from $13.5 million at September 30, 2006. Non-performing loans at September 30, 2007 included a $17 million construction loan for low-income housing that is fully collateralized and participated in by the local government. The downgrade of this loan relates to project cost overruns and construction delays. Despite these set backs we anticipate the project being completed and our loan being repaid without a loss to the Bank. Additionally, to date, we have never lost any money on low-income housing projects. Non-performing loans as a percentage of gross loans increased to 1.39 percent at September 30, 2007 from 0.50 percent at December 31, 2006 and 0.47 percent at September 30, 2006.
At September 30, 2007, delinquent loans were $55.0 million, or 1.71 percent of gross loans, compared to $19.6 million, or 0.68 percent of gross loans, at December 31, 2006, and $24.1 million, or 0.84 percent of gross loans, at September 30, 2006.
At September 30, 2007, the Company maintained an allowance for loan losses of $34.5 million and a liability for off-balance sheet exposure, primarily unfunded loan commitments, of $1.8 million. The allowance for loan losses represented 1.07 percent of gross loans at September 30, 2007, compared to 0.96 percent and 0.99 percent at December 31, 2006 and September 30, 2006, respectively. As of September 30, 2007, the allowance for loan losses was 77.19 percent of non-performing loans, compared to 193.9 percent at December 31, 2006 and 209.8 percent at September 30, 2006.
-3-
ABOUT HANMI FINANCIAL CORPORATION
Headquartered in Los Angeles, Hanmi Bank, a wholly owned subsidiary of Hanmi Financial Corporation, provides services to the multi-ethnic communities of California, with 24 full-service offices in Los Angeles, Orange, San Bernardino, 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 atwww.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; the ability of borrowers to perform under the terms of their loans and other terms of credit agreements; our ability to successfully integrate acquisitions we may make; the availability of capital to fund the expansion of our business; and changes in securities markets. In addition, we set forth certain risks in our reports filed with the Securities and Exchange Commission, including our Annual Report on Form 10-K for the fiscal year ended December 31, 2006, which could cause actual results to differ from those projected. We undertake no obligation to update such forward-looking statements except as required by law.
CONTACT
Hanmi Financial Corporation
Stephanie Yoon
Investor Relations
(213) 427-5631
-4-
HANMI FINANCIAL CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS(UNAUDITED)
(Dollars in Thousands)
| | | | | | | | | | | | | | | | | | | | | |
| | | September 30, | | | December 31, | | | % | | | September 30, | | | % | |
| | | 2007 | | | 2006 | | | Change | | | 2006 | | | Change | |
ASSETS | | | | | | | | | | | | | | | | | | | | |
| Cash and Due from Banks | | $ | 103,789 | | | $ | 97,501 | | | | 6.4 | % | | $ | 97,609 | | | | 6.3 | % |
| Federal Funds Sold | | | — | | | | 41,000 | | | | (100.0 | )% | | | 67,000 | | | | (100.0 | )% |
| | | | | | | | | | | | | | | | |
| Cash and Cash Equivalents | | | 103,789 | | | | 138,501 | | | | (25.1 | )% | | | 164,609 | | | | (36.9 | )% |
| | | | | | | | | | | | | | | | |
| Term Federal Funds Sold | | | — | | | | 5,000 | | | | (100.0 | )% | | | — | | | | — | |
| Investment Securities | | | 357,616 | | | | 391,579 | | | | (8.7 | )% | | | 398,956 | | | | (10.4 | )% |
| Loans: | | | | | | | | | | | | | | | | | | | | |
| Loans, Net of Deferred Loan Fees | | | 3,219,871 | | | | 2,864,947 | | | | 12.4 | % | | | 2,850,146 | | | | 13.0 | % |
| Allowance for Loan Losses | | | (34,503 | ) | | | (27,557 | ) | | | 25.2 | % | | | (28,276 | ) | | | 22.0 | % |
| | | | | | | | | | | | | | | | |
| Net Loans | | | 3,185,368 | | | | 2,837,390 | | | | 12.3 | % | | | 2,821,870 | | | | 12.9 | % |
| | | | | | | | | | | | | | | | |
| Customers’ Liability on Acceptances | | | 5,357 | | | | 8,403 | | | | (36.2 | )% | | | 11,245 | | | | (52.4 | )% |
| Premises and Equipment, Net | | | 20,597 | | | | 20,075 | | | | 2.6 | % | | | 20,322 | | | | 1.4 | % |
| Accrued Interest Receivable | | | 17,619 | | | | 16,919 | | | | 4.1 | % | | | 16,190 | | | | 8.8 | % |
| Other Real Estate Owned | | | 287 | | | | — | | | | — | | | | — | | | | — | |
| Deferred Income Taxes | | | 13,480 | | | | 13,064 | | | | 3.2 | % | | | 10,959 | | | | 23.0 | % |
| Servicing Asset | | | 4,328 | | | | 4,579 | | | | (5.5 | )% | | | 4,266 | | | | 1.5 | % |
| Goodwill | | | 209,991 | | | | 207,646 | | | | 1.1 | % | | | 207,646 | | | | 1.1 | % |
| Other Intangible Assets | | | 7,457 | | | | 6,312 | | | | 18.1 | % | | | 6,876 | | | | 8.4 | % |
| Federal Reserve Bank and Federal Home Loan Bank Stock | | | 25,525 | | | | 24,922 | | | | 2.4 | % | | | 24,768 | | | | 3.1 | % |
| Bank-Owned Life Insurance | | | 24,285 | | | | 23,592 | | | | 2.9 | % | | | 23,368 | | | | 3.9 | % |
| Other Assets | | | 35,916 | | | | 27,261 | | | | 31.7 | % | | | 28,080 | | | | 27.9 | % |
| | | | | | | | | | | | | | | | |
Total Assets | | $ | 4,011,615 | | | $ | 3,725,243 | | | | 7.7 | % | | $ | 3,739,155 | | | | 7.3 | % |
| | | | | | | | | | | | | | | | |
LIABILITIES AND SHAREHOLDERS’ EQUITY | | | | | | | | | | | | | | | | | | | | |
| Liabilities: | | | | | | | | | | | | | | | | | | | | |
| Deposits: | | | | | | | | | | | | | | | | | | | | |
| Noninterest-Bearing | | $ | 690,513 | | | $ | 728,347 | | | | (5.2 | )% | | $ | 756,901 | | | | (8.8 | )% |
| Interest-Bearing | | | 2,357,044 | | | | 2,216,368 | | | | 6.3 | % | | | 2,216,880 | | | | 6.3 | % |
| | | | | | | | | | | | | | | | |
| Total Deposits | | | 3,047,557 | | | | 2,944,715 | | | | 3.5 | % | | | 2,973,781 | | | | 2.5 | % |
| Accrued Interest Payable | | | 20,449 | | | | 22,582 | | | | (9.4 | )% | | | 19,191 | | | | 6.6 | % |
| Acceptances Outstanding | | | 5,357 | | | | 8,403 | | | | (36.2 | )% | | | 11,245 | | | | (52.4 | )% |
| FHLB Advances and Other Borrowings | | | 361,344 | | | | 169,037 | | | | 113.8 | % | | | 169,435 | | | | 113.3 | % |
| Junior Subordinated Debentures | | | 82,406 | | | | 82,406 | | | | — | | | | 82,406 | | | | — | |
| Other Liabilities | | | 11,593 | | | | 10,983 | | | | 5.6 | % | | | 12,392 | | | | (6.4 | )% |
| | | | | | | | | | | | | | | | |
| Total Liabilities | | | 3,528,706 | | | | 3,238,126 | | | | 9.0 | % | | | 3,268,450 | | | | 8.0 | % |
| Shareholders’ Equity | | | 482,909 | | | | 487,117 | | | | (0.9 | )% | | | 470,705 | | | | 2.6 | % |
| | | | | | | | | | | | | | | | |
Total Liabilities and Shareholders’ Equity | | $ | 4,011,615 | | | $ | 3,725,243 | | | | 7.7 | % | | $ | 3,739,155 | | | | 7.3 | % |
| | | | | | | | | | | | | | | | |
-5-
HANMI FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME(UNAUDITED)
(Dollars in Thousands, Except Per Share Data)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | For the Three Months Ended | | | For the Nine Months Ended | |
| | | Sept. 30, | | | June 30, | | | % | | | Sept. 30, | | | % | | | Sept. 30, | | | Sept. 30, | | | % | |
| | | 2007 | | | 2007 | | | Change | | | 2006 | | | Change | | | 2007 | | | 2006 | | | Change | |
| INTEREST INCOME: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Interest and Fees on Loans | | $ | 66,714 | | | $ | 65,212 | | | | 2.3 | % | | $ | 63,392 | | | | 5.2 | % | | $ | 194,487 | | | $ | 175,409 | | | | 10.9 | % |
| Interest on Investments | | | 4,422 | | | | 4,472 | | | | (1.1 | )% | | | 4,836 | | | | (8.6 | )% | | | 13,558 | | | | 14,948 | | | | (9.3 | )% |
| Interest on Federal Funds Sold | | | 61 | | | | 176 | | | | (65.3 | )% | | | 436 | | | | (86.0 | )% | | | 963 | | | | 748 | | | | 28.7 | % |
| Interest on Term Federal Funds Sold | | | — | | | | — | | | | — | | | | — | | | | — | | | | 5 | | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Interest Income | | | 71,197 | | | | 69,860 | | | | 1.9 | % | | | 68,664 | | | | 3.7 | % | | | 209,013 | | | | 191,105 | | | | 9.4 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| INTEREST EXPENSE: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Interest on Deposits | | | 27,882 | | | | 26,691 | | | | 4.5 | % | | | 25,178 | | | | 10.7 | % | | | 80,654 | | | | 66,690 | | | | 20.9 | % |
| Interest on FHLB Advances and Other Borrowings | | | 3,785 | | | | 2,919 | | | | 29.7 | % | | | 2,084 | | | | 81.6 | % | | | 8,875 | | | | 4,699 | | | | 88.9 | % |
| Interest on Junior Subordinated Debentures | | | 1,675 | | | | 1,660 | | | | 0.9 | % | | | 1,672 | | | | 0.2 | % | | | 4,974 | | | | 4,734 | | | | 5.1 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Interest Expense | | | 33,342 | | | | 31,270 | | | | 6.6 | % | | | 28,934 | | | | 15.2 | % | | | 94,503 | | | | 76,123 | | | | 24.1 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| NET INTEREST INCOME BEFORE PROVISION FOR CREDIT LOSSES | | | 37,855 | | | | 38,590 | | | | (1.9 | )% | | | 39,730 | | | | (4.7 | )% | | | 114,510 | | | | 114,982 | | | | (0.4 | )% |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Provision for Credit Losses | | | 8,464 | | | | 3,023 | | | | 180.0 | % | | | 1,682 | | | | 403.2 | % | | | 17,619 | | | | 5,542 | | | | 217.9 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES | | | 29,391 | | | | 35,567 | | | | (17.4 | )% | | | 38,048 | | | | (22.8 | )% | | | 96,891 | | | | 109,440 | | | | (11.5 | )% |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| NON-INTEREST INCOME: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Service Charges on Deposit Accounts | | | 4,463 | | | | 4,438 | | | | 0.6 | % | | | 4,249 | | | | 5.0 | % | | | 13,389 | | | | 12,663 | | | | 5.7 | % |
| Insurance Commissions | | | 1,131 | | | | 1,279 | | | | (11.6 | )% | | | 250 | | | | 352.4 | % | | | 3,535 | | | | 646 | | | | 447.2 | % |
| Trade Finance Fees | | | 1,082 | | | | 1,177 | | | | (8.1 | )% | | | 1,227 | | | | (11.8 | )% | | | 3,549 | | | | 3,414 | | | | 4.0 | % |
| Remittance Fees | | | 512 | | | | 520 | | | | (1.5 | )% | | | 517 | | | | (1.0 | )% | | | 1,503 | | | | 1,537 | | | | (2.2 | )% |
| Other Service Charges and Fees | | | 691 | | | | 574 | | | | 20.4 | % | | | 591 | | | | 16.9 | % | | | 1,881 | | | | 1,739 | | | | 8.2 | % |
| Bank-Owned Life Insurance Income | | | 234 | | | | 229 | | | | 2.2 | % | | | 221 | | | | 5.9 | % | | | 693 | | | | 654 | | | | 6.0 | % |
| Increase in Fair Value of Derivatives | | | 207 | | | | 222 | | | | (6.8 | )% | | | 389 | | | | (46.8 | )% | | | 521 | | | | 723 | | | | (27.9 | )% |
| Other Income | | | 457 | | | | 491 | | | | (6.9 | )% | | | 328 | | | | 39.3 | % | | | 1,223 | | | | 911 | | | | 34.2 | % |
| Gain on Sales of Loans | | | 523 | | | | 1,762 | | | | (70.3 | )% | | | 1,400 | | | | (62.6 | )% | | | 3,685 | | | | 3,550 | | | | 3.8 | % |
| Gain on Sales of Other Real Estate Owned | | | 226 | | | | — | | | | — | | | | — | | | | — | | | | 226 | | | | 48 | | | | 370.8 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Non-Interest Income | | | 9,526 | | | | 10,692 | | | | (10.9 | )% | | | 9,172 | | | | 3.9 | % | | | 30,205 | | | | 25,885 | | | | 16.7 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| NON-INTEREST EXPENSES: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Salaries and Employee Benefits | | | 11,418 | | | | 10,782 | | | | 5.9 | % | | | 10,357 | | | | 10.2 | % | | | 33,961 | | | | 30,209 | | | | 12.4 | % |
| Occupancy and Equipment | | | 2,657 | | | | 2,571 | | | | 3.3 | % | | | 2,482 | | | | 7.1 | % | | | 7,740 | | | | 7,122 | | | | 8.7 | % |
| Data Processing | | | 1,540 | | | | 1,665 | | | | (7.5 | )% | | | 1,431 | | | | 7.6 | % | | | 4,768 | | | | 4,314 | | | | 10.5 | % |
| Advertising and Promotion | | | 943 | | | | 889 | | | | 6.1 | % | | | 665 | | | | 41.8 | % | | | 2,493 | | | | 2,122 | | | | 17.5 | % |
| Supplies and Communications | | | 704 | | | | 704 | | | | — | | | | 636 | | | | 10.7 | % | | | 1,996 | | | | 1,848 | | | | 8.0 | % |
| Professional Fees | | | 565 | | | | 647 | | | | (12.7 | )% | | | 390 | | | | 44.9 | % | | | 1,686 | | | | 1,550 | | | | 8.8 | % |
| Amortization of Other Intangible Assets | | | 570 | | | | 592 | | | | (3.7 | )% | | | 585 | | | | (2.6 | )% | | | 1,776 | | | | 1,815 | | | | (2.1 | )% |
| Decrease in Fair Value of Embedded Option | | | 37 | | | | 196 | | | | (81.1 | )% | | | 78 | | | | (52.6 | )% | | | 233 | | | | 292 | | | | (20.2 | )% |
| Other Operating Expenses | | | 2,815 | | | | 3,444 | | | | (18.3 | )% | | | 3,237 | | | | (13.0 | )% | | | 9,055 | | | | 8,126 | | | | 11.4 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Non-Interest Expenses | | | 21,249 | | | | 21,490 | | | | (1.1 | )% | | | 19,861 | | | | 7.0 | % | | | 63,708 | | | | 57,398 | | | | 11.0 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| INCOME BEFORE PROVISION FOR INCOME TAXES | | | 17,668 | | | | 24,769 | | | | (28.7 | )% | | | 27,359 | | | | (35.4 | )% | | | 63,388 | | | | 77,927 | | | | (18.7 | )% |
| Provision for Income Taxes | | | 6,580 | | | | 9,446 | | | | (30.3 | )% | | | 9,762 | | | | (32.6 | )% | | | 23,922 | | | | 29,588 | | | | (19.1 | )% |
| | | | | | | | | | | | | | | | | | | | | | | | | |
NET INCOME | | $ | 11,088 | | | $ | 15,323 | | | | (27.6 | )% | | $ | 17,597 | | | | (37.0 | )% | | $ | 39,466 | | | $ | 48,339 | | | | (18.4 | )% |
| | | | | | | | | | | | | | | | | | | | | | | | | |
EARNINGS PER SHARE: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Basic | | $ | 0.23 | | | $ | 0.32 | | | | (28.1 | )% | | $ | 0.36 | | | | (36.1 | )% | | $ | 0.82 | | | $ | 0.99 | | | | (17.2 | )% |
| Diluted | | $ | 0.23 | | | $ | 0.31 | | | | (25.8 | )% | | $ | 0.36 | | | | (36.1 | )% | | $ | 0.81 | | | $ | 0.98 | | | | (17.3 | )% |
WEIGHTED-AVERAGE SHARES OUTSTANDING: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Basic | | | 47,355,143 | | | | 48,397,824 | | | | | | | | 48,890,662 | | | | | | | | 48,232,464 | | | | 48,809,921 | | | | | |
| Diluted | | | 47,536,078 | | | | 48,737,574 | | | | | | | | 49,450,601 | | | | | | | | 48,569,863 | | | | 49,395,152 | | | | | |
SHARES OUTSTANDING AT PERIOD-END | | | 46,986,341 | | | | 47,950,929 | | | | | | | | 48,991,146 | | | | | | | | 46,986,341 | | | | 48,991,146 | | | | | |
-6-
HANMI FINANCIAL CORPORATION AND SUBSIDIARIES
SELECTED FINANCIAL DATA(UNAUDITED)
(Dollars in Thousands)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | For the Three Months Ended | | | For the Nine Months Ended | |
| | | Sept. 30, | | | June 30, | | | % | | | Sept. 30, | | | % | | | Sept. 30, | | | Sept. 30, | | | % | |
| | | 2007 | | | 2007 | | | Change | | | 2006 | | | Change | | | 2007 | | | 2006 | | | Change | |
AVERAGE BALANCES: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Average Gross Loans, Net of Deferred Loan Fees | | $ | 3,135,531 | | | $ | 3,014,895 | | | | 4.0 | % | | $ | 2,828,972 | | | | 10.8 | % | | $ | 3,011,946 | | | $ | 2,702,902 | | | | 11.4 | % |
| Average Investment Securities | | | 360,626 | | | | 375,598 | | | | (4.0 | )% | | | 401,039 | | | | (10.1 | )% | | | 374,209 | | | | 421,195 | | | | (11.2 | )% |
| Average Interest-Earning Assets | | | 3,526,493 | | | | 3,429,123 | | | | 2.8 | % | | | 3,287,581 | | | | 7.3 | % | | | 3,435,932 | | | | 3,169,215 | | | | 8.4 | % |
| Average Total Assets | | | 3,915,517 | | | | 3,818,170 | | | | 2.5 | % | | | 3,675,091 | | | | 6.5 | % | | | 3,825,784 | | | | 3,557,227 | | | | 7.5 | % |
| Average Deposits | | | 3,016,118 | | | | 2,967,748 | | | | 1.6 | % | | | 2,927,956 | | | | 3.0 | % | | | 2,976,676 | | | | 2,857,260 | | | | 4.2 | % |
| Average Borrowings | | | 367,605 | | | | 304,744 | | | | 20.6 | % | | | 241,404 | | | | 52.3 | % | | | 308,406 | | | | 209,770 | | | | 47.0 | % |
| Average Interest-Bearing Liabilities | | | 2,683,930 | | | | 2,551,665 | | | | 5.2 | % | | | 2,427,883 | | | | 10.5 | % | | | 2,575,061 | | | | 2,329,135 | | | | 10.6 | % |
| Average Shareholders’ Equity | | | 487,006 | | | | 495,719 | | | | (1.8 | )% | | | 463,011 | | | | 5.2 | % | | | 494,731 | | | | 450,069 | | | | 9.9 | % |
| Average Tangible Equity | | | 269,255 | | | | 277,414 | | | | (2.9 | )% | | | 248,147 | | | | 8.5 | % | | | 276,627 | | | | 233,671 | | | | 18.4 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
PERFORMANCE RATIOS: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Return on Average Assets | | | 1.12 | % | | | 1.61 | % | | | | | | | 1.90 | % | | | | | | | 1.38 | % | | | 1.82 | % | | | | |
| Return on Average Shareholders’ Equity | | | 9.03 | % | | | 12.40 | % | | | | | | | 15.08 | % | | | | | | | 10.67 | % | | | 14.36 | % | | | | |
| Return on Average Tangible Equity | | | 16.34 | % | | | 22.15 | % | | | | | | | 28.13 | % | | | | | | | 19.07 | % | | | 27.66 | % | | | | |
| Efficiency Ratio | | | 44.85 | % | | | 43.61 | % | | | | | | | 40.61 | % | | | | | | | 44.02 | % | | | 40.75 | % | | | | |
| Net Interest Margin | | | 4.26 | % | | | 4.51 | % | | | | | | | 4.79 | % | | | | | | | 4.46 | % | | | 4.85 | % | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
ALLOWANCE FOR LOAN LOSSES: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Balance at the Beginning of Period | | $ | 32,190 | | | $ | 31,527 | | | | 2.1 | % | | $ | 27,250 | | | | 18.1 | % | | $ | 27,557 | | | $ | 24,963 | | | | 10.4 | % |
| Provision Charged to Operating Expense | | | 8,397 | | | | 3,181 | | | | 164.0 | % | | | 1,682 | | | | 399.2 | % | | | 17,952 | | | | 5,542 | | | | 223.9 | % |
| Charge-Offs, Net of Recoveries | | | (6,084 | ) | | | (2,518 | ) | | | 141.6 | % | | | (656 | ) | | | 827.4 | % | | | (11,006 | ) | | | (2,229 | ) | | | 393.8 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Balance at the End of Period | | $ | 34,503 | | | $ | 32,190 | | | | 7.2 | % | | $ | 28,276 | | | | 22.0 | % | | $ | 34,503 | | | $ | 28,276 | | | | 22.0 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Allowance for Loan Losses to Total Gross Loans | | | 1.07 | % | | | 1.05 | % | | | | | | | 0.99 | % | | | | | | | 1.07 | % | | | 0.99 | % | | | | |
Allowance for Loan Losses to Total Non-Performing Loans | | | 77.19 | % | | | 142.30 | % | | | | | | | 209.82 | % | | | | | | | 77.19 | % | | | 209.82 | % | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
ALLOWANCE FOR OFF-BALANCE SHEET ITEMS: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Balance at the Beginning of Period | | $ | 1,730 | | | $ | 1,888 | | | | (8.4 | )% | | $ | 2,130 | | | | (18.8 | )% | | $ | 2,130 | | | $ | 2,130 | | | | — | |
| Provision Charged to Operating Expense | | | 67 | | | | (158 | ) | | | (142.4 | )% | | | — | | | | — | | | | (333 | ) | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Balance at the End of Period | | $ | 1,797 | | | $ | 1,730 | | | | 3.9 | % | | $ | 2,130 | | | | (15.6 | )% | | $ | 1,797 | | | $ | 2,130 | | | | (15.6 | )% |
| | | | | | | | | | | | | | | | | | | | | | | | | |
-7-
HANMI FINANCIAL CORPORATION AND SUBSIDIARIES
SELECTED FINANCIAL DATA(UNAUDITED) (Continued)
(Dollars in Thousands)
| | | | | | | | | | | | | | | | | | | | | |
| | | Sept. 30, | | | Dec. 31, | | | % | | | Sept. 30, | | | % | |
| | | 2007 | | | 2006 | | | Change | | | 2006 | | | Change | |
NON-PERFORMING ASSETS: | | | | | | | | | | | | | | | | | | | | |
| Non-Accrual Loans | | $ | 44,497 | | | $ | 14,213 | | | | 213.1 | % | | $ | 13,470 | | | | 230.3 | % |
| Loans 90 Days or More Past Due and Still Accruing | | | 199 | | | | 2 | | | | 9,850.0 | % | | | 6 | | | | 3,216.7 | % |
| | | | | | | | | | | | | | | | |
| Total Non-Performing Loans | | | 44,696 | | | | 14,215 | | | | 214.4 | % | | | 13,476 | | | | 231.7 | % |
| Other Real Estate Owned | | | 287 | | | | — | | | | — | | | | — | | | | — | |
| | | | | | | | | | | | | | | | |
| Total Non-Performing Assets | | $ | 44,983 | | | $ | 14,215 | | | | 216.4 | % | | $ | 13,476 | | | | 233.8 | % |
| | | | | | | | | | | | | | | | |
Total Non-Performing Loans/Total Gross Loans | | | 1.39 | % | | | 0.50 | % | | | | | | | 0.47 | % | | | | |
Total Non-Performing Assets/Total Assets | | | 1.12 | % | | | 0.38 | % | | | | | | | 0.36 | % | | | | |
Total Non-Performing Assets/Allowance for Loan Losses | | | 130.4 | % | | | 51.6 | % | | | | | | | 47.7 | % | | | | |
DELINQUENT LOANS | | $ | 54,954 | | | $ | 19,616 | | | | 180.1 | % | | $ | 24,081 | | | | 128.2 | % |
| | | | | | | | | | | | | | | | |
Delinquent Loans/Total Gross Loans | | | 1.71 | % | | | 0.68 | % | | | | | | | 0.84 | % | | | | |
| | | | | | | | | | | | | | | | | | | | | |
LOAN PORTFOLIO: | | | | | | | | | | | | | | | | | | | | |
| Real Estate Loans | | $ | 1,099,100 | | | $ | 1,041,393 | | | | 5.5 | % | | $ | 1,014,058 | | | | 8.4 | % |
| Commercial and Industrial Loans | | | 2,033,009 | | | | 1,726,434 | | | | 17.8 | % | | | 1,739,476 | | | | 16.9 | % |
| Consumer Loans | | | 90,416 | | | | 100,121 | | | | (9.7 | )% | | | 100,180 | | | | (9.7 | )% |
| | | | | | | | | | | | | | | | |
| Total Gross Loans | | | 3,222,525 | | | | 2,867,948 | | | | 12.4 | % | | | 2,853,714 | | | | 12.9 | % |
| Deferred Loan Fees | | | (2,654 | ) | | | (3,001 | ) | | | (11.6 | )% | | | (3,568 | ) | | | (25.6 | )% |
| | | | | | | | | | | | | | | | |
| Loans, Net of Deferred Loan Fees | | | 3,219,871 | | | | 2,864,947 | | | | 12.4 | % | | | 2,850,146 | | | | 13.0 | % |
| Allowance for Loan Losses | | | (34,503 | ) | | | (27,557 | ) | | | 25.2 | % | | | (28,276 | ) | | | 22.0 | % |
| | | | | | | | | | | | | | | | |
| Loans Receivable, Net | | $ | 3,185,368 | | | $ | 2,837,390 | | | | 12.3 | % | | $ | 2,821,870 | | | | 12.9 | % |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
LOAN MIX: | | | | | | | | | | | | | | | | | | | | |
| Real Estate Loans | | | 34.1 | % | | | 36.3 | % | | | | | | | 35.5 | % | | | | |
| Commercial and Industrial Loans | | | 63.1 | % | | | 60.2 | % | | | | | | | 61.0 | % | | | | |
| Consumer Loans | | | 2.8 | % | | | 3.5 | % | | | | | | | 3.5 | % | | | | |
| | | | | | | | | | | | | | | | | | |
| Total Gross Loans | | | 100.0 | % | | | 100.0 | % | | | | | | | 100.0 | % | | | | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
DEPOSIT PORTFOLIO: | | | | | | | | | | | | | | | | | | | | |
| Demand — Noninterest-Bearing | | $ | 690,513 | | | $ | 728,348 | | | | (5.2 | )% | | $ | 756,901 | | | | (8.8 | )% |
| Savings | | | 94,150 | | | | 99,254 | | | | (5.1 | )% | | | 99,719 | | | | (5.6 | )% |
| Money Market Checking and NOW Accounts | | | 476,257 | | | | 438,267 | | | | 8.7 | % | | | 434,738 | | | | 9.6 | % |
| Time Deposits of $100,000 or More | | | 1,474,764 | | | | 1,383,358 | | | | 6.6 | % | | | 1,393,721 | | | | 5.8 | % |
| Other Time Deposits | | | 311,873 | | | | 295,488 | | | | 5.5 | % | | | 288,702 | | | | 8.0 | % |
| | | | | | | | | | | | | | | | |
| Total Deposits | | $ | 3,047,557 | | | $ | 2,944,715 | | | | 3.5 | % | | $ | 2,973,781 | | | | 2.5 | % |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
DEPOSIT MIX: | | | | | | | | | | | | | | | | | | | | |
| Demand — Noninterest-Bearing | | | 22.7 | % | | | 24.7 | % | | | | | | | 25.5 | % | | | | |
| Savings | | | 3.1 | % | | | 3.4 | % | | | | | | | 3.4 | % | | | | |
| Money Market Checking and NOW Accounts | | | 15.6 | % | | | 14.9 | % | | | | | | | 14.6 | % | | | | |
| Time Deposits of $100,000 or More | | | 48.4 | % | | | 47.0 | % | | | | | | | 46.9 | % | | | | |
| Other Time Deposits | | | 10.2 | % | | | 10.0 | % | | | | | | | 9.6 | % | | | | |
| | | | | | | | | | | | | | | | | | |
| Total Deposits | | | 100.0 | % | | | 100.0 | % | | | | | | | 100.0 | % | | | | |
| | | | | | | | | | | | | | | | | | |
-8-
HANMI FINANCIAL CORPORATION AND SUBSIDIARIES
AVERAGE BALANCES, AVERAGE YIELDS EARNED AND AVERAGE RATES PAID(UNAUDITED)
(Dollars in Thousands)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | For the Three Months Ended | | | For the Nine Months Ended | |
| | | September 30, 2007 | | | June 30, 2007 | | | September 30, 2006 | | | September 30, 2007 | | | September 30, 2006 | |
| | | | | | | Interest | | | Average | | | | | | | Interest | | | Average | | | | | | | Interest | | | Average | | | | | | | Interest | | | Average | | | | | | | Interest | | | Average | |
| | | Average | | | Income/ | | | Yield/ | | | Average | | | Income/ | | | Yield/ | | | Average | | | Income/ | | | Yield/ | | | Average | | | Income/ | | | Yield/ | | | Average | | | Income/ | | | Yield/ | |
| | | Balance | | | Expense | | | Rate | | | Balance | | | Expense | | | Rate | | | Balance | | | Expense | | | Rate | | | Balance | | | Expense | | | Rate | | | Balance | | | Expense | | | Rate | |
INTEREST-EARNING ASSETS | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
LOANS: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Real Estate Loans: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Commercial Property | | $ | 775,605 | | | $ | 15,678 | | | | 8.02 | % | | $ | 769,112 | | | $ | 15,534 | | | | 8.10 | % | | $ | 774,934 | | | $ | 16,118 | | | | 8.25 | % | | $ | 765,880 | | | $ | 46,380 | | | | 8.10 | % | | $ | 756,707 | | | $ | 46,049 | | | | 8.14 | % |
| Construction | | | 227,779 | | | | 4,814 | | | | 8.38 | % | | | 215,760 | | | | 5,137 | | | | 9.55 | % | | | 174,332 | | | | 4,333 | | | | 9.86 | % | | | 218,693 | | | | 14,889 | | | | 9.10 | % | | | 171,654 | | | | 12,386 | | | | 9.65 | % |
| Residential Property | | | 87,864 | | | | 1,124 | | | | 5.08 | % | | | 86,596 | | | | 1,157 | | | | 5.36 | % | | | 84,124 | | | | 1,114 | | | | 5.25 | % | | | 86,505 | | | | 3,378 | | | | 5.22 | % | | | 85,601 | | | | 3,303 | | | | 5.16 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Real Estate Loans | | | 1,091,248 | | | | 21,616 | | | | 7.86 | % | | | 1,071,468 | | | | 21,828 | | | | 8.17 | % | | | 1,033,390 | | | | 21,565 | | | | 8.28 | % | | | 1,071,078 | | | | 64,647 | | | | 8.07 | % | | | 1,013,962 | | | | 61,738 | | | | 8.14 | % |
| Commercial and Industrial Loans | | | 1,951,478 | | | | 43,169 | | | | 8.78 | % | | | 1,848,369 | | | | 41,206 | | | | 8.94 | % | | | 1,699,966 | | | | 39,080 | | | | 9.12 | % | | | 1,846,247 | | | | 123,143 | | | | 8.92 | % | | | 1,596,234 | | | | 106,816 | | | | 8.95 | % |
| Consumer Loans | | | 94,751 | | | | 1,798 | | | | 7.53 | % | | | 97,175 | | | | 2,016 | | | | 8.32 | % | | | 99,268 | | | | 2,255 | | | | 9.01 | % | | | 96,839 | | | | 5,987 | | | | 8.27 | % | | | 96,490 | | | | 6,219 | | | | 8.62 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Loans — Gross | | | 3,137,477 | | | | 66,583 | | | | 8.42 | % | | | 3,017,012 | | | | 65,050 | | | | 8.65 | % | | | 2,832,624 | | | | 62,900 | | | | 8.81 | % | | | 3,014,164 | | | | 193,777 | | | | 8.60 | % | | | 2,706,686 | | | | 174,773 | | | | 8.63 | % |
| Prepayment Penalty Income | | | — | | | | 131 | | | | | | | | — | | | | 162 | | | | | | | | | | | | 492 | | | | | | | | — | | | | 710 | | | | | | | | — | | | | 636 | | | | | |
| Unearned Income on Loans, Net of Costs | | | (1,946 | ) | | | — | | | | | | | | (2,117 | ) | | | — | | | | | | | | (3,652 | ) | | | — | | | | | | | | (2,218 | ) | | | — | | | | | | | | (3,784 | ) | | | — | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Gross Loans, Net | | $ | 3,135,531 | | | $ | 66,714 | | | | 8.44 | % | | $ | 3,014,895 | | | $ | 65,212 | | | | 8.68 | % | | $ | 2,828,972 | | | $ | 63,392 | | | | 8.89 | % | | $ | 3,011,946 | | | $ | 194,487 | | | | 8.63 | % | | $ | 2,702,902 | | | $ | 175,409 | | | | 8.68 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
INVESTMENT SECURITIES: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Municipal Bonds | | $ | 70,984 | | | $ | 764 | | | | 4.31 | % | | $ | 72,284 | | | $ | 762 | | | | 4.22 | % | | $ | 71,301 | | | $ | 770 | | | | 4.32 | % | | $ | 71,883 | | | $ | 2,290 | | | | 4.25 | % | | $ | 72,702 | | | $ | 2,321 | | | | 4.26 | % |
| U.S. Government Agency Securities | | | 119,704 | | | | 1,286 | | | | 4.30 | % | | | 118,696 | | | | 1,233 | | | | 4.16 | % | | | 118,365 | | | | 1,268 | | | | 4.29 | % | | | 118,894 | | | | 3,775 | | | | 4.23 | % | | | 123,986 | | | | 3,887 | | | | 4.18 | % |
| Mortgage-Backed Securities | | | 101,688 | | | | 1,237 | | | | 4.87 | % | | | 111,568 | | | | 1,317 | | | | 4.72 | % | | | 127,321 | | | | 1,505 | | | | 4.73 | % | | | 110,656 | | | | 3,958 | | | | 4.77 | % | | | 136,067 | | | | 4,787 | | | | 4.69 | % |
| Collateralized Mortgage Obligations | | | 55,619 | | | | 612 | | | | 4.40 | % | | | 60,199 | | | | 651 | | | | 4.33 | % | | | 71,414 | | | | 777 | | | | 4.35 | % | | | 59,977 | | | | 1,960 | | | | 4.36 | % | | | 75,583 | | | | 2,434 | | | | 4.29 | % |
| Corporate Bonds | | | 7,811 | | | | 89 | | | | 4.56 | % | | | 7,907 | | | | 89 | | | | 4.50 | % | | | 7,785 | | | | 89 | | | | 4.57 | % | | | 7,862 | | | | 268 | | | | 4.55 | % | | | 7,906 | | | | 268 | | | | 4.52 | % |
| Other Securities | | | 4,820 | | | | 84 | | | | 6.97 | % | | | 4,944 | | | | 84 | | | | 6.80 | % | | | 4,854 | | | | 85 | | | | 7.00 | % | | | 4,937 | | | | 252 | | | | 6.81 | % | | | 4,951 | | | | 253 | | | | 6.81 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total Investment Securities | | $ | 360,626 | | | $ | 4,072 | | | | 4.52 | % | | $ | 375,598 | | | $ | 4,136 | | | | 4.40 | % | | $ | 401,040 | | | $ | 4,494 | | | | 4.48 | % | | $ | 374,209 | | | $ | 12,503 | | | | 4.45 | % | | $ | 421,195 | | | $ | 13,950 | | | | 4.42 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
OTHER INTEREST-EARNING ASSETS: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Equity Securities (FHLB and FRB Stock) | | $ | 25,431 | | | $ | 350 | | | | 5.51 | % | | $ | 25,290 | | | $ | 336 | | | | 5.31 | % | | $ | 24,720 | | | $ | 342 | | | | 5.53 | % | | $ | 25,244 | | | $ | 1,055 | | | | 5.57 | % | | $ | 24,619 | | | $ | 997 | | | | 5.40 | % |
| Federal Funds Sold | | | 4,905 | | | | 61 | | | | 4.97 | % | | | 13,340 | | | | 176 | | | | 5.28 | % | | | 32,850 | | | | 436 | | | | 5.31 | % | | | 24,405 | | | | 963 | | | | 5.26 | % | | | 20,457 | | | | 748 | | | | 4.88 | % |
| Term Federal Funds Sold | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 128 | | | | 5 | | | | 0.1 | % | | | — | | | | — | | | | — | |
| Interest-Earning Deposits | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 0.00 | % | | | 42 | | | | 1 | | | | 4.01 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total Other Interest-Earning Assets | | $ | 30,336 | | | $ | 411 | | | | 5.42 | % | | $ | 38,630 | | | $ | 512 | | | | 5.30 | % | | $ | 57,570 | | | $ | 778 | | | | 5.41 | % | | $ | 49,777 | | | $ | 2,023 | | | | 5.42 | % | | $ | 45,118 | | | $ | 1,746 | | | | 5.16 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
TOTAL INTEREST-EARNING ASSETS | | $ | 3,526,493 | | | $ | 71,197 | | | | 8.01 | % | | $ | 3,429,123 | | | $ | 69,860 | | | | 8.17 | % | | $ | 3,287,582 | | | $ | 68,664 | | | | 8.29 | % | | $ | 3,435,932 | | | $ | 209,013 | | | | 8.13 | % | | $ | 3,169,215 | | | $ | 191,105 | | | | 8.06 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
INTEREST-BEARING LIABILITIES | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
INTEREST-BEARING DEPOSITS: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Savings | | $ | 95,147 | | | $ | 567 | | | | 2.36 | % | | $ | 99,457 | | | $ | 502 | | | | 2.02 | % | | $ | 102,518 | | | $ | 440 | | | | 1.70 | % | | $ | 98,440 | | | $ | 1,530 | | | | 2.08 | % | | $ | 110,817 | | | $ | 1,402 | | | | 1.69 | % |
| Money Market Checking and NOW Accounts | | | 471,756 | | | | 4,164 | | | | 3.50 | % | | | 432,408 | | | | 3,666 | | | | 3.40 | % | | | 441,880 | | | | 3,512 | | | | 3.15 | % | | | 444,173 | | | | 11,302 | | | | 3.40 | % | | | 481,564 | | | | 10,864 | | | | 3.02 | % |
| Time Deposits of $100,000 or More | | | 1,438,711 | | | | 19,263 | | | | 5.31 | % | | | 1,411,099 | | | | 18,778 | | | | 5.34 | % | | | 1,358,908 | | | | 17,881 | | | | 5.22 | % | | | 1,418,825 | | | | 56,539 | | | | 5.33 | % | | | 1,250,467 | | | | 45,534 | | | | 4.87 | % |
| Other Time Deposits | | | 310,711 | | | | 3,888 | | | | 4.96 | % | | | 303,957 | | | | 3,745 | | | | 4.94 | % | | | 283,173 | | | | 3,345 | | | | 4.69 | % | | | 305,217 | | | | 11,283 | | | | 4.94 | % | | | 276,517 | | | | 8,890 | | | | 4.30 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total Interest-Bearing Deposits | | $ | 2,316,325 | | | $ | 27,882 | | | | 4.78 | % | | $ | 2,246,921 | | | $ | 26,691 | | | | 4.76 | % | | $ | 2,186,479 | | | $ | 25,178 | | | | 4.57 | % | | $ | 2,266,655 | | | $ | 80,654 | | | | 4.76 | % | | $ | 2,119,365 | | | $ | 66,690 | | | | 4.21 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
BORROWINGS: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| FHLB Advances and Other Borrowings | | $ | 285,199 | | | $ | 3,785 | | | | 5.27 | % | | $ | 222,338 | | | $ | 2,919 | | | | 5.27 | % | | $ | 158,998 | | | $ | 2,084 | | | | 5.20 | % | | $ | 226,000 | | | $ | 8,875 | | | | 5.25 | % | | $ | 127,364 | | | $ | 4,699 | | | | 4.93 | % |
| Junior Subordinated Debentures | | | 82,406 | | | | 1,675 | | | | 8.06 | % | | | 82,406 | | | | 1,660 | | | | 8.08 | % | | | 82,406 | | | | 1,672 | | | | 8.05 | % | | | 82,406 | | | | 4,974 | | | | 8.07 | % | | | 82,406 | | | | 4,734 | | | | 7.68 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total Borrowings | | $ | 367,605 | | | $ | 5,460 | | | | 5.89 | % | | $ | 304,744 | | | $ | 4,579 | | | | 6.03 | % | | $ | 241,404 | | | $ | 3,756 | | | | 6.17 | % | | $ | 308,406 | | | $ | 13,849 | | | | 6.00 | % | | $ | 209,770 | | | $ | 9,433 | | | | 6.01 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
TOTAL INTEREST-BEARING LIABILITIES | | $ | 2,683,930 | | | $ | 33,342 | | | | 4.93 | % | | $ | 2,551,665 | | | $ | 31,270 | | | | 4.92 | % | | $ | 2,427,883 | | | $ | 28,934 | | | | 4.73 | % | | $ | 2,575,061 | | | $ | 94,503 | | | | 4.91 | % | | $ | 2,329,135 | | | $ | 76,123 | | | | 4.37 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
NET INTEREST INCOME | | | | | | $ | 37,855 | | | | | | | | | | | $ | 38,590 | | | | | | | | | | | $ | 39,730 | | | | | | | | | | | $ | 114,510 | | | | | | | | | | | $ | 114,982 | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
NET INTEREST SPREAD | | | | | | | | | | | 3.08 | % | | | | | | | | | | | 3.25 | % | | | | | | | | | | | 3.56 | % | | | | | | | | | | | 3.22 | % | | | | | | | | | | | 3.69 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
NET INTEREST MARGIN | | | | | | | | | | | 4.26 | % | | | | | | | | | | | 4.51 | % | | | | | | | | | | | 4.79 | % | | | | | | | | | | | 4.46 | % | | | | | | | | | | | 4.85 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
-9-
