Hanmi Financial Corporation Reports Second Quarter 2010 Financial Results

LOS ANGELES, July 27, 2010 (GLOBE NEWSWIRE) -- Hanmi Financial Corporation (Nasdaq:HAFC), the holding company for Hanmi Bank, today reported a second quarter net loss of $29.3 million, or $0.57 per share, primarily driven by a $37.5 million credit loss provision, compared to a net loss of $9.5 million, or $0.21 per share, in the second quarter a year ago when it took a $23.9 million credit loss provision. A decline in the provision for credit losses and strong liquidity were two positive trends in the second quarter.

"We are pleased with the progress we made in the second quarter of 2010 reducing the size of our problem assets while maintaining strong liquidity," stated Jay S. Yoo, President and Chief Executive Officer. "We believe these efforts combined with our recently concluded successful capital raise will help stabilize Hanmi Bank's capital position and allow us to successfully compete in our market areas over the long term," continued Mr. Yoo.

Second Quarter 2010 Highlights

• Continuing successful deleveraging of the balance sheet resulted in assets declining 25% to $2.91 billion, with gross loans down 21%, and securities down 11% compared to a year ago.
• Net interest margin (NIM) expanded 107 basis points to 3.56% in the second quarter and 113 basis points to 3.62% for the first six months of 2010 compared to 2.49% for the second quarter and the first half of 2009. The NIM expansion reflects a reduction in the cost of funds of 11 basis point drop in the quarter and 143 basis points in the first six months of 2010, respectively, compared to the same periods of 2009.
• The allowance for loan losses decreased to $176.7 million, or 7.05% of total gross loans, at June 30, 2010, compared to $177.8 million, or 6.63% of total gross loans, at March 31, 2010. The allowance for loan losses increased 68% to $176.7 million, or 7.05% of total gross loans compared to $105.3 million, or 3.33% of total gross loans a year ago.
• Nonperforming loans declined $20.1 million to $242.1 million, or 9.67% of total gross loans from the first quarter's $262.2 million. Total loans delinquent on accrual status for 30 to 89 days fell to $21.7 million, at June 30, 2010, compared to $68.6 million, at March 31, 2010.
• Federal Home Loan Bank advances and brokered deposits were down to $153.8 million and $0, respectively, at June 30, 2010 as compared with $211 million and $475 million, a year ago.
• Non–time deposits increased by 7% from $1.06 billion to $1.14 billion, accounting for 44 % of total deposits, compared to 32 % of total deposits a year ago, reflecting the continued strong support of the local community.

Successful Capital Raise

As previously announced, following the end of the second quarter, Hanmi successfully raised $120 million of confirmed funding through a registered rights and best efforts offering of common stock, and most of the net proceeds from the offerings will be down-streamed to the Bank. A final notice will be issued to the market shortly to verify the closing of the offering for the full $120 million amount. "We are very pleased with the success of these offerings and grateful for the support shown by our stockholders.  We are also pleased with the confidence shown by the investment community in Hanmi's future," Mr. Yoo stated.