EXHIBIT 99.1
HANMI FINANCIAL CORP. ANNOUNCES 2ND QUARTER OF YEAR 2003 RESULTS
NET INCOME OF $5.0 MILLION, OR $0.35 DILUTED EPS-
67% OVER THE SECOND QUARTER OF YEAR 2002
LOS ANGELES, July 18, 2003 (BUSINESS WIRE) -- Hanmi Financial Corporation
(NASDAQ:HAFC), the holding company for Hanmi Bank, today announced the unaudited
results of its operations for the second quarter ended June 30, 2003. Net income
for the quarter ended June 30, 2003 was $5.0 million, an increase of 66.7% from
net income of $3.0 million in the same quarter in 2002. On an earnings per share
basis, for the second quarter of 2003, diluted earnings per share were $0.35, up
66.7% from the $0.21 reported in the prior-year second quarter.
For the six months ended June 30, 2003, net income was $9.2 million, an increase
of $2.1 million or 29.5% compared to net income of $7.1 million for the same
period in 2002. On an earnings per share basis, for the six months ended June
30, 2003, diluted earnings per share were $0.64, up 28% from the $0.50 reported
for the six months ended June 30, 2002.
QUARTER HIGHLIGHTS
- - Net income for the second quarter of year 2003 increased 66.7% to $5.0
million compared to $3.0 million during the same quarter a year ago.
- - Net loans increased by 23.3% or $208.8 million to $1,103.5 million
compared to $894.7 million at June 30, 2002.
- - On an earnings per share basis, net income for the second quarter of
2003 was $0.35 per diluted share, an increase of 66.7%, over $0.21 per
diluted share a year ago.
- - Total deposits increased by 25.1% or $291.3 million to $1,452.0 million
compared to $1,160.7 million at June 30, 2002.
- - Mr. Jae Whan Yoo was appointed as the new President and Chief Executive
Officer, effective July 1, 2003.
YEAR-TO-DATE HIGHLIGHTS
- - Net income for the six months ended June 30, 2003 increased by 29.5% to
$9.2 million compared to $7.1 million for the six months ended June 30,
2002.
- - Net loans increased by 13.3% or $129.4 million to $1,103.5 million
compared to $974.1 million at December 31, 2002.
- - Total deposits increased by 13.1% or $168.0 million to $1,452.0
million compared to $1,284.0 million at December 31, 2002.
- - On an earnings per share basis, for the six months ended June 30, 2003
net income was $0.64 per diluted share, an increase of 28%, over $0.50
per diluted share a year ago.
"We reported consistent growth through the first two quarters of 2003 despite a
sluggish economy," said Jae Whan Yoo, President and CEO. "This is an indication
of our excellent businesses strategy, which has led to numerous new loans, and
the solid foundation that is in place at the bank. We are well positioned to not
only continue this growth but to significantly increase it as the U.S. economy
improves," continued Mr. Yoo.
NET INTEREST INCOME BEFORE PROVISION FOR LOAN LOSSES
Net interest income before provision for loan losses for the second quarter of
2003 increased by $2.1 million, or 17.8%, to $13.9 million compared to $11.8
million during the same quarter a year ago. Net interest income before provision
for loan losses for the six months ended June 30, 2003 increased by $3 million,
or 13.0%, to $26.0 million compared to $23.0 million during the same period a
year ago. The increase in net interest income was primarily due to an increase
of average interest-earning assets over average interest bearing liabilities.
The net interest margin was 3.61% for the second quarter of 2003.
Average interest-earning assets increased by $321.6 million or 28.7% over the
last year and provided an additional $3.5 million of interest income compared to
the same period in prior year. The majority of this growth was funded by $252.2
million increase in average deposits and $42.7 million increase in average
borrowings.
Average interest-bearing liabilities increased $209.5 million or 26.5% over the
last year, but the interest expense increased only $511,000 or 5.1%. Interest
expense increased $2.4 million due to increase in volume, but offset by $1.9
million decrease due to decrease in interest rate.
PROVISION FOR LOAN LOSSES
The provision for loan losses represents the charge against current earnings
that is determined by management, through a disciplined credit review process,
as the amount needed to maintain an allowance that is sufficient to absorb loan
losses inherent in the bank's loan portfolio. In view of the still uncertain
economic picture, and the additional inherent risk resulting from the overall
increase of our loan portfolio, we increased the allowance for loan losses by
$878,000 to $13.1 million, representing 1.17% of the gross loans, from $10.3
million or 1.1% of the gross loan at June 30, 2002. The provision for loan
losses was $2.7 million for the six months ended June 30, 2003, representing
increase of $580,000 or 27.6% compared to $2.1 million the same period in year
2002.
NON-INTEREST INCOME
For the quarter ended June 30, 2003, non-interest income decreased by $159,000
or 2.7% to $5.6 million, compared to $5.8 for the same quarter in 2002. The
majority decrease was due to gain recognized from the sale of interest swap of
$1.4 million in year 2002. Excluding this non-recurring income of $1.4 million,
non-interest income for this quarter actually increased by $1.2 million or
27.3%, compared to $4.4 million for the same quarter in year 2002. The majority
increase was due to increase in service charge on deposit of $378,000 or 16.8%
over the same quarter in year 2002, and gain recognized from the sale of loans
and investments of $747,000.
NON-INTEREST EXPENSES
For the quarter ended June 30, 2003, non-interest expense decreased by $2.1
million or 16.9% to $10.3 million compared to $12.4 million for the same
quarter in 2002. The majority of decrease was due to impairment charges on
Worldcom bond of $4.0 million in year 2002, which was offset by the increase in
salaries and employee benefit of $1.3 million due to expansion of branch network
and internal growth. Among the increase of salaries, non-recurring expense of
$350,000 was included due to resignation of the former CEO.
FINANCIAL POSITION
Total assets were $1,649.1 million at June 30, 2003, increased by $192.8 million
or 13.2% from December 31, 2002 of $1,456.3 million, primarily reflecting the
growth in real estate, which includes both commercial
and residential, loans and commercial loans. Our investment securities portfolio
increased 31.3% to $367.0 million at June 30, 2003, increased by $87.5 million
compared to $279.5 million at December 31, 2002.
At June 30, 2003, gross loans totaled $1,119.5 million, an increase of $130.6
million or 13.2% from $988.9 million at December 31, 2002. The majority of the
growth was in real estate loans, which increased by $68.9 million or 18.5% to
$440.5 million at June 30, 2003, compared to $371.6 million at December 31,
2002, and in commercial loans, which increased by $58 million or 10.1% to $630.9
million at June 30, 2003, compared to $572.9 million at December 31, 2002.
The increase in total assets was funded by increases in deposits. The total
deposit increased by $168.0 million or 13.1% to $1,452.0 million, compared to
$1,284.0 million at December 31, 2002. The majority increase was led by increase
in time certificates of deposit $100,000 or more of $79.7 million and other time
deposits of $52.1 million, through a special deposit campaign.
ASSET QUALITY
At June 30, 2003, accruing loans 90 days past due or more were $2.7 million,
increased by $2.1 million from $617,000 at December 31, 2002. This increase was
mainly due to $1.3 million loan to low-income housing project, which should have
been paid off through city's subsidy fund, and a fully secured $1.1 million
commercial real estate loan. The management anticipates these matters will be
resolved in the third quarter of 2003, since the former relates to a procedural
delay and the property collateral of the latter is currently on the market for
sale.
Non-accrual loans were $8.9 million at June 30, 2003, an increase by $3.0
million from $5.9 million at December 31, 2002. The increase was due to one
commercial term loan in the amount of $3.9 million that was newly placed on
non-accrual loan pool, without which non-accrual loan total would have decreased
to $5.0 million from $5.9 million at December 31, 2002. This loan has been
performing, but was placed on non-accrual due to the restructuring of payment
schedule. Of the total exposure for the foregoing loan, $2.4 million is fully
secured by equipment and commercial real estate, and, for the whole unsecured
portion, specific reserve have been allocated as of June 30, 2003.
ABOUT HANMI FINANCIAL CORPORATION
Headquartered in Los Angeles, Hanmi Bank, a wholly owned subsidiary of Hanmi
Financial Corporation, is one of the leading banks providing services to the
multi-ethnic communities of Southern California, with 14 full-service offices in
Los Angeles, Orange, San Diego and Santa Clara counties. Hanmi Bank specializes
in commercial, SBA, trade finance and consumer lending, and is a recognized
community leader. The Bank's mission is to provide varied quality products and
premier services to its customers and to maximize shareholder value.
FORWARD-LOOKING STATEMENTS
This release may contain forward-looking statements, which are included in
accordance with the "safe harbor" provisions of the Private Securities
Litigation Reform Act of 1995. In some cases, you can identify forward-looking
statements by terminology such as "may," "will," "should," "could," "expects,"
"plans," "intends," "anticipates," "believes," "estimates," "predicts,"
"potential," or "continue," or the negative of such terms and other comparable
terminology. Although we believe that the expectations reflected in the
forward-looking statements are reasonable, we cannot guarantee future results,
levels of activity, performance or achievements. These statements involve known
and unknown risks, uncertainties and other factors that may cause our actual
results, levels of activity, performance or achievements to differ from those
expressed or implied by the forward-looking statement. These factors include the
following: general economic and business conditions in those areas in which the
Company operates; demographic changes; competition for loans and deposits;
fluctuation in interest rates; risks of natural disasters related to the
Company's real estate portfolio; risks associated with SBA loans; changes in
governmental regulation; credit quality; the availability of capital to fund the
expansion of the Company's business; and changes in securities markets.
Contact: Yong Ku Choe, CFO (213) 368-3200
Kate Yi (Kim), Investor Relations (213) 639-1767
FINANCIAL HIGHLIGHTS
(Dollars in thousands, except per share data) For the quarter ended For the six months ended
June 30, June 30,
------------------------------------------------ Change
CONDENSED INCOME STATEMENT 2003 2002 2003 2002 Amount Percentage
-------------------------------------------------------------------------
Interest income $19,120 $16,945 $36,578 $33,074 $ 3,504 10.6%
Interest expense 5,252 5,125 10,564 10,053 511 5.1%
------- ------- ------- ------- ------- ----
Net interest income 13,868 11,820 26,014 23,021 2,993 13.0%
Provision for loan losses 1,500 1,050 2,680 2,100 580 27.6%
------- ------- ------- ------- ------- ----
Net interest income after provision 12,368 10,770 23,334 20,921 2,413 11.5%
Service charge on deposit accounts 2,626 2,248 5,089 4,433 656 14.8%
Gain on sales of loans 878 483 1,322 883 439 49.7%
Gain on sale of available-for-sale securities 707 355 858 928 (70) -7.5%
All other non-interest income 1,434 2,718 2,878 3,887 (1,009) -26.0%
------- ------- ------- ------- ------- ----
Non interest income 5,645 5,804 10,147 10,131 16 0.2%
Salaries and employee benefits 5,569 4,316 10,252 8,538 1,714 20.1%
Expenses of premises and fixed assets 1,282 1,068 2,467 2,131 336 15.8%
Impairment charges on investment -- 3,950 -- 3,950 (3,950) -100.0%
Other non-interest expense 3,451 3,085 6,529 5,514 1,015 18.4%
------- ------- ------- ------- ------- ----
Non-interest expense 10,302 12,419 19,248 20,133 (885) -4.4%
------- ------- ------- ------- ------- ----
Income before income taxes 7,711 4,155 14,233 10,919 3,314 30.4%
Income taxes 2,758 1,182 5,041 3,822 1,219 31.9%
------- ------- ------- ------- ------- ----
NET INCOME $ 4,953 $ 2,973 $ 9,192 $ 7,097 2,095 29.5%
======= ======= ======= ======= ======= ====
Basic EPS $ 0.35 $ 0.22 $ 0.66 $ 0.52 $ 0.14 26.3%
Diluted EPS $ 0.35 $ 0.21 $ 0.64 $ 0.50 $ 0.15 29.8%
As of As of Change As of
CONDENSED BALANCE SHEET Jun. 30, 2003 Dec. 31, 2002 Amount Percentage Jun. 30, 2002
-----------------------------------------------------------------------------------
Assets
Cash and due from banks $ 60,053 $ 67,772 $ (7,719) -11.4% $ 57,814
Federal funds sold 59,000 55,000 4,000 7.3% 67,000
Term federal funds sold 10,000 30,000 (20,000) 30,000
Investment securities 367,016 279,548 87,468 31.3% 194,470
Loans:
Loans, net of unearned income 1,116,617 986,408 130,209 13.2% 905,098
Allowance for loan and lease losses (13,147) (12,269) (878) 7.2% (10,349)
----------- ----------- ----------- ---- -----------
Net loans 1,103,470 974,139 129,331 13.3% 894,749
Other assets 49,539 49,839 (300) -0.6% 48,725
----------- ----------- ----------- ---- -----------
Total assets $ 1,649,078 $ 1,456,298 $ 192,780 13.2% $ 1,292,758
=========== =========== =========== ==== ===========
Liabilities and Stockholders' equity
Non-interest bearing deposits $ 438,418 $ 412,060 $ 26,358 6.4% $ 328,345
Interest bearing deposits 1,013,591 871,919 141,672 16.2% 832,353
----------- ----------- ----------- ---- -----------
Total deposits 1,452,009 1,283,979 168,030 13.1% $ 1,160,698
Other borrowed funds 51,950 34,450 17,500 50.8% 6,000
Other liabilities 11,416 13,401 (1,985) -14.8% 13,665
----------- ----------- ----------- ---- -----------
Total Liabilities $ 1,515,375 $ 1,331,830 $ 183,545 13.8% 1,180,363
Shareholders' equity 133,703 124,468 9,235 7.4% 112,395
----------- ----------- ----------- ---- -----------
Total Liabilities and equity $ 1,649,078 $ 1,456,298 $ 192,780 13.2% $ 1,292,758
=========== =========== =========== ==== ===========
For the six months ended, Change
AVERAGE BALANCES; Jun. 30, 2003 Jun. 30, 2002 Amount Percentage
----------------------------------------------------------
Average net loans $1,028,406 $ 866,713 $ 161,693 18.7%
Average interest-earning assets $1,441,799 $1,120,227 $ 321,572 28.7%
Average assets $1,534,589 $1,218,291 $ 316,298 26.0%
Average interest-bearing deposits $ 949,055 $ 782,251 $ 166,804 21.3%
Average deposits $1,344,782 $1,092,582 $ 252,200 23.1%
Average other borrowed funds $ 51,023 $ 8,296 $ 42,727 515.0%
Average interest-bearing liabilities $1,000,079 $ 790,547 $ 209,532 26.5%
Average equity $ 127,710 $ 107,803 $ 19,907 18.5%
SELECTED PERFORMANCE RATIO; Jun. 30, 2003 Jun. 30, 2002
--------------------------------
Return on average assets 1.20% 1.17%
Return on average equity 14.40% 13.17%
Net interest margin 3.61% 4.11%
As of As of
ALLOWANCE FOR LOAN LOSSES Jun. 30, 2003 Jun. 30, 2002
------------------------------
Balance at the beginning of Year $12,269 $10,064
Provision for loan losses 2,680 2,100
Charge-offs, net of recoveries 1,802 1,815
------- -------
Balance at the end of quarter $13,147 $10,349
======= =======
Loan loss allowance/Gross loans 1.17% 1.10%
Loan loss allowance/Non-performing loans 113.13% 216.69%
NON-PERFORMING ASSETS Jun. 30, 2003 Dec. 31, 2002 Jun. 30, 2002
------------- ------------- -------------
Accruing loans-90 days past due $ 2,700 $ 617 $ 52
Non accrual loans 8,921 5,858 4,724
------- ------- -------
Total Non performing loans 11,621 6,475 4,776
------- ------- -------
Total Non performing loans/Total loans 1.04% 0.66% 0.53%
Other real estate owned -- -- --
------- ------- -------
Total Non performing assets $11,621 $ 6,475 $ 4,776
======= ======= =======
Total Non performing assets/Total Assets 0.70% 0.44% 0.37%
Change
LOAN PORTFOLIO Jun. 30, 2003 Dec. 31, 2002 Amount Percentage
------------------------------------------------------------------------
Real estate loans $ 440,454 $ 371,593 $ 68,861 18.5%
Commercial loans 630,879 572,910 57,969 10.1%
Consumer loans 48,146 44,416 3,730 8.4%
----------- -----------
Total gross loans 1,119,479 988,919 130,560 13.2%
Unearned loan fees (2,862) (2,511) (351) 14.0%
Allowance for loan losses (13,147) (12,269) (878) 7.2%
----------- ----------- ----------- ----
Net loans $ 1,103,470 $ 974,139 $ 129,331 13.3%
=========== =========== =========== ====
LOAN MIX
Real estate loans 39.34% 37.58%
Commercial loans 56.35% 57.93%
Consumer loans 4.30% 4.49%
------ ------
Total gross loans 100.00% 100.00%
====== ======
As of As of Change
DEPOSIT PORTFOLIO Jun. 30, 2003 Dec. 31, 2002 Amount Percentage
------------------------------------------------------------------------
Non-interest bearing $ 438,418 $ 412,060 $ 26,358 6.4%
Savings 94,921 98,121 (3,200) -3.3%
Time certificates of
deposit $100,000 or more 403,287 323,544 79,743 24.6%
Other time deposits 312,088 259,940 52,148 20.1%
Money market checking 203,295 190,314 12,981 6.8%
------------ ------------ --------- ----
Total deposit $ 1,452,009 $ 1,283,979 $ 168,030 13.1%
============ ============ ========= ====
DEPOSIT MIX
Non-interest bearing 30.19% 32.09%
Savings 6.54% 7.64%
Time certificates of
deposit $100,000 or more 27.77% 25.20%
Other time deposits 21.49% 20.24%
Money market checking 14.00% 14.82%
------ ------
Total deposit 100.00% 100.00%
====== ======