EXHIBIT 99.1
Hanmi Financial Corporation’s
Second-Quarter 2008 Financial Results
Include Goodwill Impairment Charge
LOS ANGELES – July 29, 2008 – Hanmi Financial Corporation (NASDAQ:HAFC) (“we,” “our” or “Hanmi”), the holding company for Hanmi Bank (“the Bank”), reported a second-quarter net loss of $105.5 million, or ($2.30) per share, which includes a non-cash goodwill impairment charge of $107.4 million and a provision for credit losses of $19.2 million, compared to net income of $15.3 million, or $0.31 per diluted share, in the second quarter of 2007. For the six months ended June 30, 2008, Hanmi reported a net loss of $102.6 million, or ($2.24) per share, compared to net income of $28.3 million, or $0.58 per diluted share, in the first six months of 2007.
The goodwill subject to impairment was primarily associated with the April 2004 acquisition of Pacific Union Bank, whose twelve branches continue to make significant contributions to the Bank’s core operations. The second quarter 2008 goodwill impairment charge, like a similar charge of $102.9 million incurred in the fourth quarter of 2007, is a non-cash item. U.S. generally accepted accounting principles (“GAAP”) require that when an event or a significant adverse change in market conditions occurs, then an assessment of impairment of goodwill must be performed. GAAP requires that a company use the most readily available indicator of market value, which is the market price of its stock, as part of its assessment of goodwill impairment. Accordingly, we determined that the market value of our common stock was not sufficient to support the carrying value of the remaining goodwill on the balance sheet. Because of this charge, there is no longer any goodwill on our balance sheet.
Jay S. Yoo, Hanmi’s recently appointed President and Chief Executive Officer (“CEO”), noted, “The Bank’s capital levels and liquidity position remain adequate. Moreover,” said Yoo, “I would like to reaffirm our commitment to serving the long-term interests of both our customers and our shareholders. Fulfilling that commitment requires that we bring greater stability to both our operations and our operating performance. Accordingly, since my appointment as President and CEO last month, we have begun implementing programs designed to enhance credit quality and operating efficiencies. For example, we are restructuring our credit administration functions by centralizing the credit underwriting function at three locations, creating a central monitoring mechanism to monitor all loans, and increasing resources in departments of the Bank engaged in addressing problem assets.
“Of necessity, I have learned a lot in my thirty-seven years in commercial banking. It is apparent that, in the early years of this decade, many in the banking industry became somewhat complacent in the face of easy credit, historically low interest rates and a booming economy characterized by an extraordinarily robust real estate market. We have not been immune to the pervasive and adverse effects of tighter credit and a slowing economy. We are focusing our attention on improving credit quality rather than growing our asset base. Among other things, we are more closely and frequently reviewing and monitoring all loans that are special mention and impaired.
“We are, of course, confident in Hanmi’s future and will work hard to strengthen our loan portfolio and use our best efforts to build our deposit base. We are committed to ensuring Hanmi’s continuing success. Our customers and shareholders deserve nothing less.”
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Results of Operations
The tables below provide a reconciliation between various GAAP and non-GAAP metrics — including non-interest expenses, net income and earnings per share — that exclude the effect of the goodwill impairment charge for the three- and six-month periods ended June 30, 2008. We have provided them in the belief that they can be useful in evaluating our core operating performance. All subsequent references to non-GAAP metrics are to these tables.
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Three Months Ended June 30, 2008 | | | Six Months Ended June 30, 2008 | |
| | | Net | | | Weighted- | | | | | | | Net | | | Weighted- | | | | |
| | | Income | | | Average | | | Per | | | Income | | | Average | | | Per | |
| | | (Loss) | | | Shares | | | Share | | | (Loss) | | | Shares | | | Share | |
| | | (Numerator) | | | (Denominator) | | | Amount | | | (Numerator) | | | (Denominator) | | | Amount | |
| | | | | | | (Dollars in Thousands, Except Per Share Amounts) | | | | | |
| | | | | | | | | | | | |
GAAP Net Loss | | $ | (105,547 | ) | | | 45,881,549 | | | $ | (2.30 | ) | | $ | (102,626 | ) | | | 45,861,963 | | | $ | (2.24 | ) |
| Impairment Loss on Goodwill | | | 107,393 | | | | | | | | | | | | 107,393 | | | | | | | | | |
| Dilutive Securities — Options | | | | | | | 62,684 | | | $ | 2.34 | | | | | | | | 67,524 | | | $ | 2.34 | |
| | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Non-GAAP Net Income, Excluding | | | | | | | | | | | | | | | | | | | | | | | | |
Impairment Loss on Goodwill | | $ | 1,846 | | | | 45,944,233 | | | $ | 0.04 | | | $ | 4,767 | | | | 45,929,487 | | | $ | 0.10 | |
| | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Three Months Ended June 30, 2008 | | Six Months Ended June 30, 2008 |
| | | | | | | Less | | | | | | | | | | Less | | |
| | | | | | | Impairment | | | | | | | | | | Impairment | | |
| | | | | | | Loss on | | | | | | | | | | Loss on | | |
| | | GAAP | | Goodwill | | Non-GAAP | | GAAP | | Goodwill | | Non-GAAP |
| | | | | | | | | | | (Dollars in Thousands) | | | | | | | | |
| | | | | | | | | | | | |
| Total Non-Interest Expenses | | $ | 129,443 | | | $ | (107,393 | ) | | $ | 22,050 | | | $ | 151,031 | | | $ | (107,393 | ) | | $ | 43,638 | |
| Return on Average Assets | | | (10.83 | )% | | | 11.02 | % | | | 0.19 | % | | | (5.23 | )% | | | 5.47 | % | | | 0.24 | % |
| Return on Average Shareholders’ Equity | | | (112.57 | )% | | | 114.54 | % | | | 1.97 | % | | | (54.59 | )% | | | 57.13 | % | | | 2.54 | % |
| Return on Average Tangible Equity | | | (160.37 | )% | | | 163.17 | % | | | 2.80 | % | | | (77.90 | )% | | | 81.52 | % | | | 3.62 | % |
| Efficiency Ratio | | | 296.07 | % | | | (245.64 | )% | | | 50.43 | % | | | 172.25 | % | | | (122.48 | )% | | | 49.77 | % |
Excluding the goodwill impairment charge, non-GAAP net income was $1.8 million, or $0.04 per diluted share, compared to net income of $2.9 million, or $0.06 per diluted share, reported in the first quarter of 2008. For the six months, ended June 30, 2008, non-GAAP net income was $4.8 million, or $0.10 per diluted share, compared to net income of $28.3 million, or $0.58 per diluted share, in the first six months of 2007. The disappointing second-quarter results reflect a number of factors, notably continuing weakness in the loan portfolio and the resulting provision for credit losses of $19.2 million.
Total non-interest income in the second quarter of 2008 was $9.7 million compared to $9.8 million in the first quarter and $10.7 million a year ago. First quarter 2008 non-interest income included a $618,000 gain on sales of securities, for which there were no comparable sales in the second quarter; this was largely offset by an increase of $580,000 in other income, to a total of $917,000, attributable primarily to a $450,000 refund of a previously paid fee to an outside vendor. Gain on sales of loans more than doubled, to $552,000 in the second quarter of 2008 from $213,000 in the first quarter of 2008 due to higher sales volume. In the second quarter of 2008, $17.1 million of loans were sold at an average gain of 3.2 percent, compared to $6.2 million and 3.5 percent in the first quarter of 2008.
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Total non-interest expense in the second quarter of 2008 was $129.4 million compared to $21.6 million in the first quarter and $21.5 million a year ago. Excluding the goodwill impairment charge, non-GAAP non-interest expenses were $22.1 million in the second quarter of 2008, or $462,000 higher than in the first quarter of 2008. “Longer term, we expect to reduce non-interest expenses — with corresponding improvements in the efficiency ratio — as we implement a program to tighten the Bank’s operations, streamline its organizational structure and optimize overhead,” said Brian Cho, Chief Financial Officer. “I would emphasize, however, that such changes take time to affect the bottom line.”
For the second quarter of 2008, the efficiency ratio (non-interest expenses divided by the sum of net interest income before provision for credit losses and non-interest income) was 296.07 percent, or 50.43 percent excluding the goodwill impairment charge, compared to 49.11 percent in the first quarter of 2008 and 43.70 percent in the comparable period a year ago.
Net interest income before provision for credit losses decreased by $129,000, or 0.4 percent, to $34.1 million compared to $34.2 million in the first quarter of 2008. The weak economy continues to take a toll on the Bank’s borrowers. The second quarter 2008 provision for credit losses increased to $19.2 million compared to $17.8 million in the first quarter and $3.0 million in the comparable period a year ago. Charge-offs, net of recoveries, were $8.2 million in the second quarter of 2008 compared to $2.5 million in the second quarter of 2007.
The full effect of the Federal Reserve Bank’s 200-basis-point cut in short-term interest rates in early 2008 on our interest-earning assets was reflected in the second quarter of 2008, when the yield on the loan portfolio declined by 60 basis points to 6.78 percent from 7.38 percent in the first quarter of 2008. On the other hand, as time deposits matured, we experienced a positive effect in the cost of average interest-bearing deposits, which decreased by 56 basis points to 3.70 percent from 4.26 percent in the prior quarter.
Net interest margin was 3.75 percent compared to 3.73 percent in the first quarter of 2008 and 4.50 percent in the second quarter of 2007. “I would caution that competition for deposits remains intense,” said Cho, “and we do not expect to see significant margin expansion for some time to come.”
Balance Sheet and Asset Quality
At June 30, 2008, total assets were $3.85 billion compared to $3.94 billion at March 31, 2008, a reduction of $95.3 million, or 2.4 percent. Gross loans increased by $49.1 million, or 1.5 percent, to $3.36 billion at June 30, 2008, compared to $3.31 billion at March 31, 2008. Total deposits declined by $66.2 million, or 2.2 percent, to $2.96 billion at June 30, 2008, compared to $3.03 billion at March 31, 2008. FHLB advances and other borrowings increased by $84.6 million, or 20.3 percent, to $500.1 million at June 30, 2008, compared to $415.6 million at March 31, 2008. “The bulk of the reduction in total assets,” said Yoo, “is attributable to the second-quarter goodwill impairment charge.”
As of June 30, 2008, the allowance for loan losses was $63.0 million, or 1.88 percent of gross loans (56.14 percent of non-performing loans), compared to $53.0 million, or 1.60 percent of gross loans (59.72 percent of non-performing loans), at March 31, 2008, and $32.2 million, or 1.05 percent of gross loans (142.30 percent of non-performing loans), at June 30, 2007.
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As of June 30, 2008, non-performing loans increased to $112.2 million (3.34 percent of gross loans), compared to $88.7 million (2.68 percent of gross loans) at March 31, 2008. Delinquent loans increased to $138.4 million (4.12 percent of total gross loans) at June 30, 2008, compared to $105.8 million (3.20 percent of total gross loans) at March 31, 2008. The majority of the $23.5 million and $32.5 million sequential increases in non-performing and delinquent loans, respectively, is attributable to a $24.2 million commercial term loan.
“We face a number of challenges in an environment characterized by a sluggish economy and aggressive pricing of both loans and deposits,” added Yoo, “For Hanmi, none of these challenges is more important than the improvement in credit quality. In addition to monitoring delinquent loans, we are working diligently at the early identification of potential weaknesses in currently performing loans. Here our aim is twofold: where appropriate, to work with a borrower to address small problems before they become more serious and possibly jeopardize the status of the loan; and, based on this and other analyses, to ensure that our reserves are adequate for losses inherent in the loan portfolio.”
Capital Adequacy
The Bank’s capital ratios exceed levels defined as “well-capitalized” by our regulators. At June 30, 2008, the Bank’s Tier 1 Leverage, Tier 1 Risk-Based Capital and Total Risk-Based Capital ratios were 8.60 percent, 9.39 percent and 10.64 percent, respectively, compared to 8.74 percent, 9.54 percent and 10.79 percent, respectively, at March 31, 2008.
“Consistent with our attention to asset quality rather than total assets,” Yoo said, “we anticipate that, absent a severe and unduly prolonged deterioration in the credit markets, our existing capital, augmented by future net income, will be sufficient to maintain our well-capitalized status and support measured growth in our business.”
Yoo continued, “Hanmi’s Board of Directors will continue to monitor the appropriateness of the cash dividend in light of changing market conditions. Our current view is that a $0.03 per share quarterly dividend provides a reasonable balance between preserving capital and providing investors with a cash return on their investment. In addition, as previously disclosed, our ability to pay a cash dividend is also dependent on receipt of regulatory approvals from the Federal Reserve Board and the California Department of Financial Institutions.”
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 25 full-service offices in Los Angeles County, Orange County, San Bernardino County, San Diego County, the San Francisco Bay area, and the Silicon Valley area in Santa Clara County, and eight 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.
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This release includes non-GAAP net income, non-GAAP earnings per share data, shares used in non-GAAP earnings per share calculation and non-GAAP non-interest expenses. These non-GAAP measures are not in accordance with, or an alternative for, measures prepared in accordance with GAAP and may be different from non-GAAP measures used by other companies. In addition, these non-GAAP measures are not based on any comprehensive set of accounting rules or principles. We believe that non-GAAP measures have limitations in that they do not reflect all of the amounts associated with our results of operations as determined in accordance with GAAP and that these measures should be used only to evaluate our results of operations in conjunction with the corresponding GAAP measures.
We believe that the presentation of non-GAAP net income, non-GAAP earnings per share data, non-GAAP performance ratios, shares used in non-GAAP earnings per share calculation, and non-GAAP non-interest expenses, when shown in conjunction with the corresponding GAAP measures, provides useful information to investors and management regarding financial and business trends relating to our financial condition and results of operations. In addition, we believe that the presentation of non-GAAP income provides useful information to investors and management regarding operating activities for the periods presented.
For the internal budgeting process, our management uses financial statements that do not include impairment losses on goodwill. Our management also uses the foregoing non-GAAP measures, in addition to the corresponding GAAP measures, in reviewing our financial results.
Forward-Looking Statements
This release contains forward-looking statements, which are included in accordance with the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “should,” “could,” “expects,” “plans,” “intends,” “anticipates,” “believes,” “estimates,” “predicts,” “potential,” or “continue,” or the negative of such terms and other comparable terminology. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. These statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to differ from those expressed or implied by the forward-looking statement. These factors include the following: general economic and business conditions in those areas in which we operate; demographic changes; competition for loans and deposits; fluctuations in interest rates; risks of natural disasters related to our real estate portfolio; risks associated with SBA loans; changes in governmental regulation; ability to receive regulatory approval for Hanmi Bank to declare dividends to Hanmi Financial; adequacy of our allowance for loan losses, credit quality and the effect of credit quality on our provision for credit losses and allowance for loan losses; 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, 2007, 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
| | | |
| BRIAN E. CHO | | STEPHANIE YOON |
| Chief Financial Officer | | Investor Relations |
| (213) 368-3200 | | (213) 427-5631 |
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HANMI FINANCIAL CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS(UNAUDITED)
(Dollars in Thousands)
| | | | | | | | | | | | | | | | | | | | | |
| | | June 30, | | | December 31, | | | % | | | June 30, | | | % | |
| | | 2008 | | | 2007 | | | Change | | | 2007 | | | Change | |
ASSETS | | | | | | | | | | | | | | | | | | | | |
| Cash and Due from Banks | | $ | 110,222 | | | $ | 105,898 | | | | 4.1 | % | | $ | 98,020 | | | | 12.4 | % |
| Federal Funds Sold | | | 10,000 | | | | 16,500 | | | | (39.4 | )% | | | 23,800 | | | | (58.0 | )% |
| | | | | | | | | | | | | | | | |
| Cash and Cash Equivalents | | | 120,222 | | | | 122,398 | | | | (1.8 | )% | | | 121,820 | | | | (1.3 | )% |
| | | | | | | | | | | | | | | | |
| Investment Securities | | | 262,601 | | | | 350,457 | | | | (25.1 | )% | | | 364,732 | | | | (28.0 | )% |
| Loans: | | | | | | | | | | | | | | | | | | | | |
| Gross Loans, Net of Deferred Loan Fees | | | 3,352,879 | | | | 3,284,708 | | | | 2.1 | % | | | 3,055,921 | | | | 9.7 | % |
| Allowance for Loan Losses | | | (62,977 | ) | | | (43,611 | ) | | | 44.4 | % | | | (32,190 | ) | | | 95.6 | % |
| | | | | | | | | | | | | | | | |
| Loans Receivable, Net | | | 3,289,902 | | | | 3,241,097 | | | | 1.5 | % | | | 3,023,731 | | | | 8.8 | % |
| | | | | | | | | | | | | | | | |
| Customers’ Liability on Acceptances | | | 6,717 | | | | 5,387 | | | | 24.7 | % | | | 12,753 | | | | (47.3 | )% |
| Premises and Equipment, Net | | | 20,801 | | | | 20,800 | | | | — | | | | 20,361 | | | | 2.2 | % |
| Accrued Interest Receivable | | | 13,155 | | | | 17,411 | | | | (24.4 | )% | | | 17,313 | | | | (24.0 | )% |
| Other Real Estate Owned | | | — | | | | 287 | | | | (100.0 | )% | | | 1,080 | | | | (100.0 | )% |
| Servicing Assets | | | 4,328 | | | | 4,336 | | | | (0.2 | )% | | | 4,417 | | | | (2.0 | )% |
| Goodwill | | | — | | | | 107,100 | | | | (100.0 | )% | | | 209,941 | | | | (100.0 | )% |
| Other Intangible Assets | | | 5,882 | | | | 6,908 | | | | (14.9 | )% | | | 8,027 | | | | (26.7 | )% |
| Federal Reserve Bank and Federal Home Loan Bank Stock | | | 41,130 | | | | 33,479 | | | | 22.9 | % | | | 25,352 | | | | 62.2 | % |
| Bank-Owned Life Insurance | | | 24,998 | | | | 24,525 | | | | 1.9 | % | | | 24,051 | | | | 3.9 | % |
| Other Assets | | | 55,371 | | | | 49,472 | | | | 11.9 | % | | | 37,319 | | | | 48.4 | % |
| | | | | | | | | | | | | | | | |
TOTAL ASSETS | | $ | 3,845,107 | | | $ | 3,983,657 | | | | (3.5 | )% | | $ | 3,870,897 | | | | (0.7 | )% |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
LIABILITIES AND SHAREHOLDERS’ EQUITY | | | | | | | | | | | | | | | | | | | | |
| Liabilities: | | | | | | | | | | | | | | | | | | | | |
| Deposits: | | | | | | | | | | | | | | | | | | | | |
| Noninterest-Bearing | | $ | 683,846 | | | $ | 680,282 | | | | 0.5 | % | | $ | 720,214 | | | | (5.0 | )% |
| Interest-Bearing | | | 2,277,714 | | | | 2,321,417 | | | | (1.9 | )% | | | 2,252,932 | | | | 1.1 | % |
| | | | | | | | | | | | | | | | |
| Total Deposits | | | 2,961,560 | | | | 3,001,699 | | | | (1.3 | )% | | | 2,973,146 | | | | (0.4 | )% |
| Accrued Interest Payable | | | 16,583 | | | | 21,828 | | | | (24.0 | )% | | | 23,343 | | | | (29.0 | )% |
| Acceptances Outstanding | | | 6,717 | | | | 5,387 | | | | 24.7 | % | | | 12,753 | | | | (47.3 | )% |
| FHLB Advances and Other Borrowings | | | 500,107 | | | | 487,164 | | | | 2.7 | % | | | 278,784 | | | | 79.4 | % |
| Junior Subordinated Debentures | | | 82,406 | | | | 82,406 | | | | — | | | | 82,406 | | | | — | |
| Other Liabilities | | | 16,229 | | | | 14,617 | | | | 11.0 | % | | | 15,302 | | | | 6.1 | % |
| | | | | | | | | | | | | | | | |
| Total Liabilities | | | 3,583,602 | | | | 3,613,101 | | | | (0.8 | )% | | | 3,385,734 | | | | 5.8 | % |
| Shareholders’ Equity | | | 261,505 | | | | 370,556 | | | | (29.4 | )% | | | 485,163 | | | | (46.1 | )% |
| | | | | | | | | | | | | | | | |
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | | $ | 3,845,107 | | | $ | 3,983,657 | | | | (3.5 | )% | | $ | 3,870,897 | | | | (0.7 | )% |
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HANMI FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS(UNAUDITED)
(Dollars in Thousands, Except Per Share Data)
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| | | Three Months Ended | | | Six Months Ended | |
| | | June 30, | | | March 31, | | | % | | | June 30, | | | % | | | June 30, | | | June 30, | | | % | |
| | | 2008 | | | 2008 | | | Change | | | 2007 | | | Change | | | 2008 | | | 2007 | | | Change | |
| INTEREST AND DIVIDEND INCOME: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Interest and Fees on Loans | | $ | 55,905 | | | $ | 60,598 | | | | (7.7 | )% | | $ | 65,212 | | | | (14.3 | )% | | $ | 116,503 | | | $ | 127,773 | | | | (8.8 | )% |
| Taxable Interest on Investments | | | 2,579 | | | | 3,116 | | | | (17.2 | )% | | | 3,374 | | | | (23.6 | )% | | | 5,695 | | | | 6,905 | | | | (17.5 | )% |
| Tax-Exempt Interest on Investments | | | 662 | | | | 759 | | | | (12.8 | )% | | | 762 | | | | (13.1 | )% | | | 1,421 | | | | 1,526 | | | | (6.9 | )% |
| Dividends on FHLB and FRB Stock | | | 486 | | | | 414 | | | | 17.4 | % | | | 336 | | | | 44.6 | % | | | 900 | | | | 705 | | | | 27.7 | % |
| Interest on Federal Funds Sold | | | 31 | | | | 83 | | | | (62.7 | )% | | | 176 | | | | (82.4 | )% | | | 114 | | | | 902 | | | | (87.4 | )% |
| Interest on Term Federal Funds Sold | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 5 | | | | (100.0 | )% |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Interest and Dividend Income | | | 59,663 | | | | 64,970 | | | | (8.2 | )% | | | 69,860 | | | | (14.6 | )% | | | 124,633 | | | | 137,816 | | | | (9.6 | )% |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| INTEREST EXPENSE: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Interest on Deposits | | | 20,487 | | | | 24,847 | | | | (17.5 | )% | | | 26,797 | | | | (23.5 | )% | | | 45,334 | | | | 52,986 | | | | (14.4 | )% |
| Interest on FHLB Advances and Other Borrowings | | | 3,944 | | | | 4,477 | | | | (11.9 | )% | | | 2,919 | | | | 35.1 | % | | | 8,421 | | | | 5,090 | | | | 65.4 | % |
| Interest on Junior Subordinated Debentures | | | 1,164 | | | | 1,449 | | | | (19.7 | )% | | | 1,660 | | | | (29.9 | )% | | | 2,613 | | | | 3,299 | | | | (20.8 | )% |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Interest Expense | | | 25,595 | | | | 30,773 | | | | (16.8 | )% | | | 31,376 | | | | (18.4 | )% | | | 56,368 | | | | 61,375 | | | | (8.2 | )% |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| NET INTEREST INCOME BEFORE PROVISION FOR CREDIT LOSSES | | | 34,068 | | | | 34,197 | | | | (0.4 | )% | | | 38,484 | | | | (11.5 | )% | | | 68,265 | | | | 76,441 | | | | (10.7 | )% |
| Provision for Credit Losses | | | 19,229 | | | | 17,821 | | | | 7.9 | % | | | 3,023 | | | | 536.1 | % | | | 37,050 | | | | 9,155 | | | | 304.7 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES | | | 14,839 | | | | 16,376 | | | | (9.4 | )% | | | 35,461 | | | | (58.2 | )% | | | 31,215 | | | | 67,286 | | | | (53.6 | )% |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| NON-INTEREST INCOME: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Service Charges on Deposit Accounts | | | 4,539 | | | | 4,717 | | | | (3.8 | )% | | | 4,438 | | | | 2.3 | % | | | 9,256 | | | | 8,926 | | | | 3.7 | % |
| Insurance Commissions | | | 1,384 | | | | 1,315 | | | | 5.2 | % | | | 1,279 | | | | 8.2 | % | | | 2,699 | | | | 2,404 | | | | 12.3 | % |
| Trade Finance Fees | | | 825 | | | | 865 | | | | (4.6 | )% | | | 1,177 | | | | (29.9 | )% | | | 1,690 | | | | 2,467 | | | | (31.5 | )% |
| Remittance Fees | | | 539 | | | | 505 | | | | 6.7 | % | | | 520 | | | | 3.7 | % | | | 1,044 | | | | 991 | | | | 5.3 | % |
| Other Service Charges and Fees | | | 703 | | | | 716 | | | | (1.8 | )% | | | 574 | | | | 22.5 | % | | | 1,419 | | | | 1,190 | | | | 19.2 | % |
| Bank-Owned Life Insurance Income | | | 234 | | | | 240 | | | | (2.5 | )% | | | 229 | | | | 2.2 | % | | | 474 | | | | 459 | | | | 3.3 | % |
| Change in Fair Value of Derivatives | | | (41 | ) | | | 239 | | | | (117.2 | )% | | | 222 | | | | (118.5 | )% | | | 198 | | | | 314 | | | | (36.9 | )% |
| Other Income | | | 917 | | | | 337 | | | | 172.1 | % | | | 491 | | | | 86.8 | % | | | 1,254 | | | | 766 | | | | 63.7 | % |
| Gain on Sales of Loans | | | 552 | | | | 213 | | | | 159.2 | % | | | 1,762 | | | | (68.7 | )% | | | 765 | | | | 3,162 | | | | (75.8 | )% |
| Gain on Sales of Securities Available for Sale | | | — | | | | 618 | | | | (100.0 | )% | | | — | | | | — | | | | 618 | | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Non-Interest Income | | | 9,652 | | | | 9,765 | | | | (1.2 | )% | | | 10,692 | | | | (9.7 | )% | | | 19,417 | | | | 20,679 | | | | (6.1 | )% |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| NON-INTEREST EXPENSES: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Salaries and Employee Benefits | | | 11,301 | | | | 11,280 | | | | 0.2 | % | | | 10,782 | | | | 4.8 | % | | | 22,581 | | | | 22,543 | | | | 0.2 | % |
| Occupancy and Equipment | | | 2,792 | | | | 2,782 | | | | 0.4 | % | | | 2,571 | | | | 8.6 | % | | | 5,574 | | | | 5,083 | | | | 9.7 | % |
| Data Processing | | | 1,698 | | | | 1,534 | | | | 10.7 | % | | | 1,665 | | | | 2.0 | % | | | 3,232 | | | | 3,228 | | | | 0.1 | % |
| Professional Fees | | | 995 | | | | 985 | | | | 1.0 | % | | | 647 | | | | 53.8 | % | | | 1,980 | | | | 1,121 | | | | 76.6 | % |
| Advertising and Promotion | | | 888 | | | | 812 | | | | 9.4 | % | | | 889 | | | | (0.1 | )% | | | 1,700 | | | | 1,550 | | | | 9.7 | % |
| Supplies and Communications | | | 623 | | | | 704 | | | | (11.5 | )% | | | 704 | | | | (11.5 | )% | | | 1,327 | | | | 1,292 | | | | 2.7 | % |
| Amortization of Other Intangible Assets | | | 502 | | | | 524 | | | | (4.2 | )% | | | 592 | | | | (15.2 | )% | | | 1,026 | | | | 1,206 | | | | (14.9 | )% |
| Decrease in Fair Value of Embedded Option | | | — | | | | — | | | | — | | | | 196 | | | | (100.0 | )% | | | — | | | | 196 | | | | (100.0 | )% |
| Other Operating Expenses | | | 3,251 | | | | 2,967 | | | | 9.6 | % | | | 3,444 | | | | (5.6 | )% | | | 6,218 | | | | 6,240 | | | | (0.4 | )% |
| Impairment Loss on Goodwill | | | 107,393 | | | | — | | | | — | | | | — | | | | — | | | | 107,393 | | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Non-Interest Expenses | | | 129,443 | | | | 21,588 | | | | 499.6 | % | | | 21,490 | | | | 502.3 | % | | | 151,031 | | | | 42,459 | | | | 255.7 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| INCOME (LOSS) BEFORE PROVISION FOR INCOME TAXES | | | (104,952 | ) | | | 4,553 | | | | (2,405.1 | )% | | | 24,663 | | | | (525.5 | )% | | | (100,399 | ) | | | 45,506 | | | | (320.6 | )% |
| Provision for Income Taxes | | | 595 | | | | 1,632 | | | | (63.5 | )% | | | 9,401 | | | | (93.7 | )% | | | 2,227 | | | | 17,252 | | | | (87.1 | )% |
| | | | | | | | | | | | | | | | | | | | | | | | | |
NET INCOME (LOSS) | | $ | (105,547 | ) | | $ | 2,921 | | | | (3,713.4 | )% | | $ | 15,262 | | | | (791.6 | )% | | $ | (102,626 | ) | | $ | 28,254 | | | | (463.2 | )% |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
EARNINGS (LOSS) PER SHARE: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Basic | | $ | (2.30 | ) | | $ | 0.06 | | | | | | | $ | 0.32 | | | | | | | $ | (2.24 | ) | | $ | 0.58 | | | | | |
| Diluted | | $ | (2.30 | ) | | $ | 0.06 | | | | | | | $ | 0.31 | | | | | | | $ | (2.24 | ) | | $ | 0.58 | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
WEIGHTED-AVERAGE SHARES OUTSTANDING: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Basic | | | 45,881,549 | | | | 45,842,376 | | | | | | | | 48,397,824 | | | | | | | | 45,861,963 | | | | 48,678,399 | | | | | |
| Diluted | | | 45,881,549 | | | | 45,918,143 | | | | | | | | 48,737,574 | | | | | | | | 45,861,963 | | | | 49,110,835 | | | | | |
SHARES OUTSTANDING AT PERIOD-END | | | 45,900,549 | | | | 45,905,549 | | | | | | | | 47,950,929 | | | | | | | | 45,900,549 | | | | 47,950,929 | | | | | |
-7-
HANMI FINANCIAL CORPORATION AND SUBSIDIARIES
SELECTED FINANCIAL DATA(UNAUDITED)
(Dollars in Thousands)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Three Months Ended | | | Six Months Ended | |
| | | June 30, | | | March 31, | | | % | | | June 30, | | | % | | | June 30, | | | June 30, | | | % | |
| | | 2008 | | | 2008 | | | Change | | | 2007 | | | Change | | | 2008 | | | 2007 | | | Change | |
AVERAGE BALANCES: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Average Gross Loans, Net of Deferred Loan Fees | | $ | 3,317,061 | | | $ | 3,303,141 | | | | 0.4 | % | | $ | 3,014,895 | | | | 10.0 | % | | $ | 3,310,101 | | | $ | 2,949,129 | | | | 12.2 | % |
| Average Investment Securities | | | 296,790 | | | | 342,123 | | | | (13.3 | )% | | | 375,598 | | | | (21.0 | )% | | | 319,457 | | | | 381,113 | | | | (16.2 | )% |
| Average Interest-Earning Assets | | | 3,657,676 | | | | 3,689,650 | | | | (0.9 | )% | | | 3,429,123 | | | | 6.7 | % | | | 3,673,663 | | | | 3,389,901 | | | | 8.4 | % |
| Average Total Assets | | | 3,920,796 | | | | 3,965,425 | | | | (1.1 | )% | | | 3,818,170 | | | | 2.7 | % | | | 3,944,199 | | | | 3,780,147 | | | | 4.3 | % |
| Average Deposits | | | 2,882,506 | | | | 2,995,315 | | | | (3.8 | )% | | | 2,967,748 | | | | (2.9 | )% | | | 2,938,910 | | | | 2,956,629 | | | | (0.6 | )% |
| Average Borrowings | | | 621,239 | | | | 553,138 | | | | 12.3 | % | | | 304,744 | | | | 103.9 | % | | | 587,189 | | | | 278,316 | | | | 111.0 | % |
| Average Interest-Bearing Liabilities | | | 2,851,021 | | | | 2,897,209 | | | | (1.6 | )% | | | 2,551,665 | | | | 11.7 | % | | | 2,874,115 | | | | 2,519,725 | | | | 14.1 | % |
| Average Stockholders’ Equity | | | 377,096 | | | | 377,411 | | | | (0.1 | )% | | | 495,719 | | | | (23.9 | )% | | | 378,030 | | | | 497,444 | | | | (24.0 | )% |
| Average Tangible Equity | | | 264,710 | | | | 263,624 | | | | 0.4 | % | | | 277,414 | | | | (4.6 | )% | | | 264,943 | | | | 278,835 | | | | (5.0 | )% |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
PERFORMANCE RATIOS: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Return on Average Assets | | | (10.83 | )% | | | 0.30 | % | | | | | | | 1.60 | % | | | | | | | (5.23 | )% | | | 1.51 | % | | | | |
| Return on Average Stockholders’ Equity | | | (112.57 | )% | | | 3.11 | % | | | | | | | 12.35 | % | | | | | | | (54.59 | )% | | | 11.45 | % | | | | |
| Return on Average Tangible Equity | | | (160.37 | )% | | | 4.46 | % | | | | | | | 22.07 | % | | | | | | | (77.90 | )% | | | 20.43 | % | | | | |
| Efficiency Ratio | | | 296.07 | % | | | 49.11 | % | | | | | | | 43.70 | % | | | | | | | 172.25 | % | | | 43.72 | % | | | | |
| Net Interest Spread | | | 2.95 | % | | | 2.81 | % | | | | | | | 3.24 | % | | | | | | | 2.88 | % | | | 3.29 | % | | | | |
| Net Interest Margin | | | 3.75 | % | | | 3.73 | % | | | | | | | 4.50 | % | | | | | | | 3.74 | % | | | 4.55 | % | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
ALLOWANCE FOR LOAN LOSSES: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Balance at the Beginning of Period | | $ | 52,986 | | | $ | 43,611 | | | | 21.5 | % | | $ | 31,527 | | | | 68.1 | % | | $ | 43,611 | | | $ | 27,557 | | | | 58.3 | % |
| Provision Charged to Operating Expense | | | 18,211 | | | | 16,672 | | | | 9.2 | % | | | 3,181 | | | | 472.5 | % | | | 34,883 | | | | 9,555 | | | | 265.1 | % |
| Charge-Offs, Net of Recoveries | | | (8,220 | ) | | | (7,297 | ) | | | 12.6 | % | | | (2,518 | ) | | | 226.4 | % | | | (15,517 | ) | | | (4,922 | ) | | | 215.3 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Balance at End of Period | | $ | 62,977 | | | $ | 52,986 | | | | 18.9 | % | | $ | 32,190 | | | | 95.6 | % | | $ | 62,977 | | | $ | 32,190 | | | | 95.6 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Allowance for Loan Losses to Total Gross Loans | | | 1.88 | % | | | 1.60 | % | | | | | | | 1.05 | % | | | | | | | 1.88 | % | | | 1.05 | % | | | | |
Allowance for Loan Losses to Total Non-Performing Loans | | | 56.14 | % | | | 59.72 | % | | | | | | | 142.30 | % | | | | | | | 56.14 | % | | | 142.30 | % | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
ALLOWANCE FOR OFF-BALANCE SHEET ITEMS: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Balance at the Beginning of Period | | $ | 2,914 | | | $ | 1,765 | | | | 65.1 | % | | $ | 1,888 | | | | 54.3 | % | | $ | 1,765 | | | $ | 2,130 | | | | (17.1 | )% |
| Provision Charged to Operating Expense | | | 1,018 | | | | 1,149 | | | | (11.4 | )% | | | (158 | ) | | | (92.8 | )% | | | 2,167 | | | | (400 | ) | | | (641.8 | )% |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Balance at End of Period | | $ | 3,932 | | | $ | 2,914 | | | | 34.9 | % | | $ | 1,730 | | | | 127.3 | % | | $ | 3,932 | | | $ | 1,730 | | | | 127.3 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
`
-8-
HANMI FINANCIAL CORPORATION AND SUBSIDIARIES
SELECTED FINANCIAL DATA(UNAUDITED) (Continued)
(Dollars in Thousands)
| | | | | | | | | | | | | | | | | | | | | |
| | | June 30, | | | March 31, | | | % | | | June 30, | | | % | |
| | | 2008 | | | 2008 | | | Change | | | 2007 | | | Change | |
NON-PERFORMING ASSETS: | | | | | | | | | | | | | | | | | | | | |
| Non-Accrual Loans | | $ | 112,024 | | | $ | 88,529 | | | | 26.5 | % | | $ | 22,442 | | | | 399.2 | % |
| Loans 90 Days or More Past Due and Still Accruing | | | 158 | | | | 191 | | | | (17.3 | )% | | | 179 | | | | (11.7 | )% |
| | | | | | | | | | | | | | | | |
| Total Non-Performing Loans | | | 112,182 | | | | 88,720 | | | | 26.4 | % | | | 22,621 | | | | 395.9 | % |
| Other Real Estate Owned | | | — | | | | — | | | | — | | | | 1,080 | | | | (100.0 | )% |
| | | | | | | | | | | | | | | | |
| Total Non-Performing Assets | | $ | 112,182 | | | $ | 88,720 | | | | 26.4 | % | | $ | 23,701 | | | | 373.3 | % |
| | | | | | | | | | | | | | | | |
| |
Total Non-Performing Loans/Total Gross Loans | | | 3.34 | % | | | 2.68 | % | | | | | | | 0.74 | % | | | | |
Total Non-Performing Assets/Total Assets | | | 2.92 | % | | | 2.25 | % | | | | | | | 0.61 | % | | | | |
Total Non-Performing Assets/Allowance for Loan Losses | | | 178.1 | % | | | 167.4 | % | | | | | | | 73.6 | % | | | | |
| | | | | | | | | | | | | | | | | | | | | |
DELINQUENT LOANS | | $ | 138,373 | | | $ | 105,842 | | | | 30.7 | % | | $ | 31,979 | | | | 332.7 | % |
| | | | | | | | | | | | | | | | |
| |
Delinquent Loans/Total Gross Loans | | | 4.12 | % | | | 3.20 | % | | | | | | | 1.05 | % | | | | |
| | | | | | | | | | | | | | | | | | | | | |
LOAN PORTFOLIO: | | | | | | | | | | | | | | | | | | | | |
| Real Estate Loans | | $ | 1,158,480 | | | $ | 1,092,121 | | | | 6.1 | % | | $ | 1,062,460 | | | | 9.0 | % |
| Commercial and Industrial Loans | | | 2,108,506 | | | | 2,123,741 | | | | (0.7 | )% | | | 1,898,097 | | | | 11.1 | % |
| Consumer Loans | | | 88,062 | | | | 90,087 | | | | (2.2 | )% | | | 97,496 | | | | (9.7 | )% |
| | | | | | | | | | | | | | | | |
| Total Gross Loans | | | 3,355,048 | | | | 3,305,949 | | | | 1.5 | % | | | 3,058,053 | | | | 9.7 | % |
| Deferred Loan Fees | | | (2,169 | ) | | | (1,910 | ) | | | 13.6 | % | | | (2,132 | ) | | | 1.7 | % |
| | | | | | | | | | | | | | | | |
| Gross Loans, Net of Deferred Loan Fees | | | 3,352,879 | | | | 3,304,039 | | | | 1.5 | % | | | 3,055,921 | | | | 9.7 | % |
| Allowance for Loan Losses | | | (62,977 | ) | | | (52,986 | ) | | | 18.9 | % | | | (32,190 | ) | | | 95.6 | % |
| | | | | | | | | | | | | | | | |
| Loans Receivable, Net | | $ | 3,289,902 | | | $ | 3,251,053 | | | | 1.2 | % | | $ | 3,023,731 | | | | 8.8 | % |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
LOAN MIX: | | | | | | | | | | | | | | | | | | | | |
| Real Estate Loans | | | 34.5 | % | | | 33.0 | % | | | | | | | 34.7 | % | | | | |
| Commercial and Industrial Loans | | | 62.8 | % | | | 64.2 | % | | | | | | | 62.1 | % | | | | |
| Consumer Loans | | | 2.7 | % | | | 2.8 | % | | | | | | | 3.2 | % | | | | |
| | | | | | | | | | | | | | | | | | |
| Total Gross Loans | | | 100.0 | % | | | 100.0 | % | | | | | | | 100.0 | % | | | | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
DEPOSIT PORTFOLIO: | | | | | | | | | | | | | | | | | | | | |
| Noninterest-Bearing | | $ | 683,846 | | | $ | 676,471 | | | | 1.1 | % | | $ | 720,214 | | | | (5.0 | )% |
| Savings | | | 93,747 | | | | 92,189 | | | | 1.7 | % | | | 97,019 | | | | (3.4 | )% |
| Money Market Checking and NOW Accounts | | | 728,601 | | | | 696,552 | | | | 4.6 | % | | | 438,973 | | | | 66.0 | % |
| Time Deposits of $100,000 or More | | | 1,050,942 | | | | 1,248,853 | | | | (15.8 | )% | | | 1,408,237 | | | | (25.4 | )% |
| Other Time Deposits | | | 404,424 | | | | 313,703 | | | | 28.9 | % | | | 308,703 | | | | 31.0 | % |
| | | | | | | | | | | | | | | | |
| Total Deposits | | $ | 2,961,560 | | | $ | 3,027,768 | | | | (2.2 | )% | | $ | 2,973,146 | | | | (0.4 | )% |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
DEPOSIT MIX: | | | | | | | | | | | | | | | | | | | | |
| Noninterest-Bearing | | | 23.1 | % | | | 22.3 | % | | | | | | | 24.2 | % | | | | |
| Savings | | | 3.2 | % | | | 3.0 | % | | | | | | | 3.3 | % | | | | |
| Money Market Checking and NOW Accounts | | | 24.6 | % | | | 23.0 | % | | | | | | | 14.8 | % | | | | |
| Time Deposits of $100,000 or More | | | 35.5 | % | | | 41.2 | % | | | | | | | 47.4 | % | | | | |
| Other Time Deposits | | | 13.6 | % | | | 10.5 | % | | | | | | | 10.3 | % | | | | |
| | | | | | | | | | | | | | | | | | |
| Total Deposits | | | 100.0 | % | | | 100.0 | % | | | | | | | 100.0 | % | | | | |
| | | | | | | | | | | | | | | | | | |
-9-
HANMI FINANCIAL CORPORATION AND SUBSIDIARIES
AVERAGE BALANCES, AVERAGE YIELDS EARNED AND AVERAGE RATES PAID(UNAUDITED)
(Dollars in Thousands)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Three Months Ended | | | Six Months Ended | |
| | | June 30, 2008 | | | March 31, 2008 | | | June 30, 2007 | | | June 30, 2008 | | | June 30, 2007 | |
| | | | | | | 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 | | $ | 804,745 | | | $ | 13,810 | | | | 6.90 | % | | $ | 790,350 | | | $ | 14,480 | | | | 7.37 | % | | $ | 769,112 | | | $ | 15,534 | | | | 8.10 | % | | $ | 797,548 | | | $ | 28,290 | | | | 7.13 | % | | $ | 760,938 | | | $ | 30,702 | | | | 8.14 | % |
| Construction | | | 208,074 | | | | 2,649 | | | | 5.12 | % | | | 217,609 | | | | 2,893 | | | | 5.35 | % | | | 215,760 | | | | 5,137 | | | | 9.55 | % | | | 212,842 | | | | 5,542 | | | | 5.24 | % | | | 214,074 | | | | 10,075 | | | | 9.49 | % |
| Residential Property | | | 89,949 | | | | 1,205 | | | | 5.39 | % | | | 89,512 | | | | 1,170 | | | | 5.26 | % | | | 86,596 | | | | 1,157 | | | | 5.36 | % | | | 89,730 | | | | 2,375 | | | | 5.32 | % | | | 85,813 | | | | 2,254 | | | | 5.30 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Real Estate Loans | | | 1,102,768 | | | | 17,664 | | | | 6.44 | % | | | 1,097,471 | | | | 18,543 | | | | 6.80 | % | | | 1,071,468 | | | | 21,828 | | | | 8.17 | % | | | 1,100,120 | | | | 36,207 | | | | 6.62 | % | | | 1,060,825 | | | | 43,031 | | | | 8.18 | % |
| Commercial and Industrial Loans | | | 2,127,882 | | | | 36,236 | | | | 6.85 | % | | | 2,117,501 | | | | 40,052 | | | | 7.61 | % | | | 1,848,369 | | | | 41,083 | | | | 8.92 | % | | | 2,122,691 | | | | 76,288 | | | | 7.23 | % | | | 1,792,760 | | | | 79,976 | | | | 9.00 | % |
| Consumer Loans | | | 88,491 | | | | 1,596 | | | | 7.25 | % | | | 90,280 | | | | 1,698 | | | | 7.56 | % | | | 97,175 | | | | 2,139 | | | | 8.83 | % | | | 89,385 | | | | 3,294 | | | | 7.41 | % | | | 97,900 | | | | 4,186 | | | | 8.62 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Gross Loans | | | 3,319,141 | | | | 55,496 | | | | 6.72 | % | | | 3,305,252 | | | | 60,293 | | | | 7.34 | % | | | 3,017,012 | | | | 65,050 | | | | 8.65 | % | | | 3,312,196 | | | | 115,789 | | | | 7.03 | % | | | 2,951,485 | | | | 127,193 | | | | 8.69 | % |
| Prepayment Penalty Income | | | — | | | | 409 | | | | — | | | | — | | | | 305 | | | | — | | | | — | | | | 162 | | | | — | | | | — | | | | 714 | | | | — | | | | — | | | | 580 | | | | — | |
| Unearned Income on Loans, Net of Costs | | | (2,080 | ) | | | — | | | | — | | | | (2,111 | ) | | | — | | | | — | | | | (2,117 | ) | | | — | | | | — | | | | (2,095 | ) | | | — | | | | — | | | | (2,356 | ) | | | — | | | | — | |
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Gross Loans, Net | | | 3,317,061 | | | | 55,905 | | | | 6.78 | % | | | 3,303,141 | | | | 60,598 | | | | 7.38 | % | | | 3,014,895 | | | | 65,212 | | | | 8.68 | % | | | 3,310,101 | | | | 116,503 | | | | 7.08 | % | | | 2,949,129 | | | | 127,773 | | | | 8.74 | % |
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Investment Securities: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Municipal Bonds | | | 63,177 | | | | 662 | | | | 4.19 | % | | | 71,879 | | | | 759 | | | | 4.22 | % | | | 72,284 | | | | 762 | | | | 4.22 | % | | | 67,528 | | | | 1,421 | | | | 4.21 | % | | | 72,340 | | | | 1,526 | | | | 4.22 | % |
| U.S. Government Agency Securities | | | 84,088 | | | | 884 | | | | 4.21 | % | | | 109,860 | | | | 1,245 | | | | 4.53 | % | | | 118,696 | | | | 1,233 | | | | 4.16 | % | | | 96,974 | | | | 2,129 | | | | 4.39 | % | | | 118,483 | | | | 2,489 | | | | 4.20 | % |
| Mortgage-Backed Securities | | | 91,488 | | | | 1,076 | | | | 4.70 | % | | | 97,088 | | | | 1,176 | | | | 4.85 | % | | | 111,568 | | | | 1,317 | | | | 4.72 | % | | | 94,288 | | | | 2,252 | | | | 4.78 | % | | | 115,213 | | | | 2,721 | | | | 4.72 | % |
| Collateralized Mortgage Obligations | | | 46,411 | | | | 487 | | | | 4.20 | % | | | 49,932 | | | | 534 | | | | 4.28 | % | | | 60,199 | | | | 651 | | | | 4.33 | % | | | 48,172 | | | | 1,021 | | | | 4.24 | % | | | 62,193 | | | | 1,348 | | | | 4.33 | % |
| Corporate Bonds | | | 7,779 | | | | 89 | | | | 4.58 | % | | | 9,509 | | | | 109 | | | | 4.59 | % | | | 7,907 | | | | 89 | | | | 4.50 | % | | | 8,644 | | | | 198 | | | | 4.58 | % | | | 7,888 | | | | 179 | | | | 4.54 | % |
| Other Securities | | | 3,847 | | | | 42 | | | | 4.37 | % | | | 3,855 | | | | 52 | | | | 5.40 | % | | | 4,944 | | | | 84 | | | | 6.80 | % | | | 3,851 | | | | 94 | | | | 4.88 | % | | | 4,996 | | | | 168 | | | | 6.73 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total Investment Securities | | | 296,790 | | | | 3,240 | | | | 4.37 | % | | | 342,123 | | | | 3,875 | | | | 4.53 | % | | | 375,598 | | | | 4,136 | | | | 4.40 | % | | | 319,457 | | | | 7,115 | | | | 4.45 | % | | | 381,113 | | | | 8,431 | | | | 4.42 | % |
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Other Interest-Earning Assets: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Equity Securities (FHLB and FRB Stock) | | | 38,031 | | | | 486 | | | | 5.11 | % | | | 33,490 | | | | 414 | | | | 4.94 | % | | | 25,290 | | | | 336 | | | | 5.31 | % | | | 35,760 | | | | 900 | | | | 5.03 | % | | | 25,149 | | | | 705 | | | | 5.61 | % |
| Federal Funds Sold | | | 5,621 | | | | 31 | | | | 2.21 | % | | | 10,896 | | | | 83 | | | | 3.05 | % | | | 13,340 | | | | 176 | | | | 5.28 | % | | | 8,258 | | | | 114 | | | | 2.76 | % | | | 34,317 | | | | 902 | | | | 5.26 | % |
| Term Federal Funds Sold | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 193 | | | | 5 | | | | 5.18 | % |
| Interest-Earning Deposits | | | 173 | | | | 1 | | | | 2.31 | % | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 87 | | | | 1 | | | | 2.30 | % | | | — | | | | — | | | | — | |
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Total Other Interest-Earning Assets | | | 43,825 | | | | 518 | | | | 4.73 | % | | | 44,386 | | | | 497 | | | | 4.48 | % | | | 38,630 | | | | 512 | | | | 5.30 | % | | | 44,105 | | | | 1,015 | | | | 4.60 | % | | | 59,659 | | | | 1,612 | | | | 5.40 | % |
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| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
TOTAL INTEREST-EARNING ASSETS | | $ | 3,657,676 | | | $ | 59,663 | | | | 6.56 | % | | $ | 3,689,650 | | | $ | 64,970 | | | | 7.08 | % | | $ | 3,429,123 | | | $ | 69,860 | | | | 8.17 | % | | $ | 3,673,663 | | | $ | 124,633 | | | | 6.82 | % | | $ | 3,389,901 | | | $ | 137,816 | | | | 8.20 | % |
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INTEREST-BEARING LIABILITIES | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest-Bearing Deposits: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Savings | | $ | 91,803 | | | $ | 527 | | | | 2.31 | % | | $ | 92,467 | | | $ | 527 | | | | 2.29 | % | | $ | 99,457 | | | $ | 502 | | | | 2.02 | % | | $ | 92,135 | | | $ | 1,054 | | | | 2.30 | % | | $ | 100,114 | | | $ | 963 | | | | 1.94 | % |
| Money Market Checking and NOW Accounts | | | 718,257 | | | | 5,707 | | | | 3.20 | % | | | 557,493 | | | | 4,660 | | | | 3.36 | % | | | 432,408 | | | | 3,666 | | | | 3.40 | % | | | 637,875 | | | | 10,367 | | | | 3.27 | % | | | 430,152 | | | | 7,138 | | | | 3.35 | % |
| Time Deposits of $100,000 or More | | | 1,098,990 | | | | 11,040 | | | | 4.04 | % | | | 1,354,466 | | | | 15,687 | | | | 4.66 | % | | | 1,411,099 | | | | 18,778 | | | | 5.34 | % | | | 1,226,728 | | | | 26,727 | | | | 4.38 | % | | | 1,408,718 | | | | 37,276 | | | | 5.34 | % |
| Other Time Deposits | | | 320,732 | | | | 3,213 | | | | 4.03 | % | | | 339,645 | | | | 3,973 | | | | 4.70 | % | | | 303,957 | | | | 3,851 | | | | 5.08 | % | | | 330,188 | | | | 7,186 | | | | 4.38 | % | | | 302,425 | | | | 7,609 | | | | 5.07 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total Interest-Bearing Deposits | | | 2,229,782 | | | | 20,487 | | | | 3.70 | % | | | 2,344,071 | | | | 24,847 | | | | 4.26 | % | | | 2,246,921 | | | | 26,797 | | | | 4.78 | % | | | 2,286,926 | | | | 45,334 | | | | 3.99 | % | | | 2,241,409 | | | | 52,986 | | | | 4.77 | % |
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Borrowings: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| FHLB Advances and Other Borrowings | | | 538,833 | | | | 3,944 | | | | 2.94 | % | | | 470,732 | | | | 4,477 | | | | 3.83 | % | | | 222,338 | | | | 2,919 | | | | 5.27 | % | | | 504,783 | | | | 8,421 | | | | 3.35 | % | | | 195,910 | | | | 5,090 | | | | 5.24 | % |
| Junior Subordinated Debentures | | | 82,406 | | | | 1,164 | | | | 5.68 | % | | | 82,406 | | | | 1,449 | | | | 7.07 | % | | | 82,406 | | | | 1,660 | | | | 8.08 | % | | | 82,406 | | | | 2,613 | | | | 6.38 | % | | | 82,406 | | | | 3,299 | | | | 8.07 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total Borrowings | | | 621,239 | | | | 5,108 | | | | 3.31 | % | | | 553,138 | | | | 5,926 | | | | 4.31 | % | | | 304,744 | | | | 4,579 | | | | 6.03 | % | | | 587,189 | | | | 11,034 | | | | 3.78 | % | | | 278,316 | | | | 8,389 | | | | 6.08 | % |
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| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
TOTAL INTEREST-BEARING LIABILITIES | | $ | 2,851,021 | | | $ | 25,595 | | | | 3.61 | % | | $ | 2,897,209 | | | $ | 30,773 | | | | 4.27 | % | | $ | 2,551,665 | | | $ | 31,376 | | | | 4.93 | % | | $ | 2,874,115 | | | $ | 56,368 | | | | 3.94 | % | | $ | 2,519,725 | | | $ | 61,375 | | | | 4.91 | % |
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| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
NET INTEREST INCOME | | | | | | $ | 34,068 | | | | | | | | | | | $ | 34,197 | | | | | | | | | | | $ | 38,484 | | | | | | | | | | | $ | 68,265 | | | | | | | | | | | $ | 76,441 | | | | | |
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NET INTEREST SPREAD | | | | | | | | | | | 2.95 | % | | | | | | | | | | | 2.81 | % | | | | | | | | | | | 3.24 | % | | | | | | | | | | | 2.88 | % | | | | | | | | | | | 3.29 | % |
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NET INTEREST MARGIN | | | | | | | | | | | 3.75 | % | | | | | | | | | | | 3.73 | % | | | | | | | | | | | 4.50 | % | | | | | | | | | | | 3.74 | % | | | | | | | | | | | 4.55 | % |
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